At the next NetApp Insight in Las Vegas (26-29 September 2016) I’ll have the chance to meet up with a number of end users and, among them, 1&1. In fact, one of the best moments at the last NetApp SolidFire Analyst Day was interviewing end users and I really hope to repeat that experience. Especially now that the two companies are starting to integrate more.
A Global Local ISP
1&1 is the case history that struck me the most. It started as a local provider but now, thanks to its presence in 10 European countries and the US, it’s becoming a global reality. The idea that a European ISP can become global, especially with all the fragmented laws and regulations we have in the EU, is amazing and the fact that they have crossed the pond and are growing in the US, the most competitive market when it comes to internet and the cloud, is even more compelling to me. Furthermore, 1&1 serves the SMB market which is very price/cost sensitive and, at least in my Italian experience, expectsmuch more than what it is willing to pay… again, talking about the SMB space as a competitive market is an euphemism!
A Different Strategy
Strategically speaking, by choosing technologies like NetApp SolidFire, 1&1 has set itself apart from the average service provider crowd. Don’t get me wrong, I’m fond of NetApp SolidFire, but I usually think about it as being a high end product which can enable to build private clouds and enterprise-focused service providers. Finding it in such a demanding environment as it is, where every Euro counts, gives the idea of the potential benefits that this product can bring to this type of end user.
This kind of ISP, with a great number of very small VM instances, puts storage in a highly sticky position. Up to now, in most of the cases, ISPs have always chosen the cheapest of the storage systems in order to limit the initial investment and to provide the lowest possible $/GB. That worked for a while, but at the expense of performance and, more in general, quality of the service. And it wasn’t a problem indeed, what do you expect for €4.99/month?
However, things have changed pretty quickly and now users are anticipating more from the ISPs, even if they are willing to spend only €4.99/month! They are more mature and they check the quality of what they are buying.
Much More Than Flash
Flash is the first step, it gives the ISP the horsepower it needs. But performance peak is not enough, with the hundreds of thousands of VMs that a service provider like 1&1 is managing, flash is just an enabler for what really counts: efficiency, automation, APIs and QoS. All characteristics where SolidFire excels. But again, $/GB and $/month is still the ultimate feature for the SMB end user… and this is the real challenge.
A few months ago, NetApp SolidFire also introduced some interesting financial programs allowing service providers to buy their storage in a very flexible way. In addition to what you would expect from a flash vendor, like for example flash memory lifetime support.
The technical advantages are clear but there is more. In fact, thanks to the separation between HW and SW, it is possible to have a different depreciation cycle for the two components with obvious financial benefits.
Closing the Circle
These success stories about how to make storage infrastructures less of a problem and transform them into a component which becomes a competitive advantage for a company are really noteworthy, aren’t they?
I’m really eager to meet up with 1&1, and other NetApp customers, to find out more about the benefits of adopting NetApp technology and how they have taken advantage of its characteristics to bring the $/GB at a profitable level. If you agree that 1&1 deserves the NetApp Innovation Award for 2016, vote now!
Note: This post series is sponsored by NetApp
