Develop a Successful Virtual Private Server Profit Model

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Develop a Successful Virtual Private Server
Profit Model

• Platform, Plans, and Pricing

Presented by Lou Honick HostMySite.com CEO
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Information Summary

• Beginning Considerations
• VPS Platforms
• Building a Plan Base
• Pricing Associated Costs
• What to Expect

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Why Customers Want VPS

• Is VPS right for your customers
• Increased control vs. shared hosting
• Complete isolation
• An alternative to a dedicated server without the
  cost

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Market Strategy

• Mass market and volume vs. higher end plans
• Entry point to dedicated hosting
• Customer acquisition plans
• Market to your own customers vs.
• Market to prospects

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VPS Platforms

• Choose your VPS technology
• A brief review of the more popular platforms
• MS Virtual Server
• Xen
• VMware
• Virtuozzo

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VPS Platforms

• MS Virtual Server
• Migration of VEs cause minor downtime
• Version 2005 R2 supports Linuxguest OS

Image Source http//www.microsoft.com/windowsserv
ersystem/virtualserver/overview/vs2005tech.mspx
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VPS Platforms

• Xen
• Allows for "seamless" migration of VEs
• Each VE OS must be ported to run with Xen

Image Source http//www.cl.cam.ac.uk/Research/SRG
/netos/papers/2003-xensosp.pdf
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VPS Platforms

• VMware ESX Server
• Allows for migration of VEs without downtime
• VMware runs it's own OS VE OSs are installed
  over the host OS

Image Source http//www.vmware.com/products/vi/es
x/
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VPS Platforms

• Virtuozzo
• Allows for migration of VEs without service
  interruption
• Each VE OS links to the host OS

Image Source http//www.virtuozzo.com/en/products
/virtuozzo/linux/
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Market Growth

• An example Virtuozzo
• Over 60 of Plesk licenses sold are virtualized
  as compared to less than 30 12 months ago
• Rate of Virtuozzo licenses shipped increased 7x
  from 12 months ago and 50x from 24 months ago
• Over 20,000 Virtuozzo partitions were sold in Feb
  2006 as compared to 10,000 sold in Feb 2005

Source Serguei Beloussov, SWsoft
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Plan Right for Success

• Staffing
• Plan for the necessary manpower at each step
• Identify how much staff training is needed
• Infrastructure
• Assess the state of your current infrastructure
• How your internal systems are set up determines
  your plan capabilities
• Identify new systems to put in place if any

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Plan Right for Success

• Budget limitations
• What are the necessities to offer?
• Control Panels
• Spacing
• Beta testing strategies

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Configuring Your Plans

• How many plans are right?
• Having several plans gives customers options
• Consider upsell opportunities
• Preparing your infrastructure will determine plan
  constraints
• Be aware of
• Server limitations, staff limitations
• Customer wants and needs

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Identify Costs Set the Price

• Infrastructure
• Servers and other hardware
• White box vs. name brand servers
• Requirements
• Acquiring initial technology software, licenses
• Plan configurations determine continual software
  and license costs
• Resources to prepare, train, and rollout the
  solution

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Identify Costs Set the Price

• Define the parameters of each plan
• Identify what the real costs are for those plans
• Beware of falling into the overselling trap

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What to Expect

• The Good
• Current customer conversion
• New market of prospects
• The Bad The Ugly
• Growing pains are inevitable
• Support staff learning curve
• Know what can go wrong
• What have you learned from other product rollouts?

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Topic Review

• Planning thoroughly is key
• Do your research when selecting a platform
• Understand what your customers want and make sure
  you can support it
• Know what costs to expect and how to control them
• Be prepared to refine as you go

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Thank you for attending!
l.honick_at_hostmysite.com 302.224.3987