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Jan 22, 2013

Will Cloud SLAs keep pace with the demands of enterprise SaaS?

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Cloud SLAs keep pace with enterprise SaaSBy Charlie Alsmiller, CEO, Appterra

I recently spoke with an enterprise software company that had launched a “Cloud” initiative. Like so many others, ourselves included, they had flocked to the variety of services available from Amazon, Azure, Softlayer, Rackspace and others to “scale” their business using the latest cloud technology.

I have examined all these services in some level of detail, and have found them all to be very good when paired with the right job. In our business, we rely on our technology partnerships to help ensure 100% uptime for our customers. In turn, our customers rely on us for dependable service that allows their business to run smoothly. Downtime is a really big problem. As such, they expect us to write a fairly intense SLA (Service Level Agreement) into our contracts, because if we are down, they are down. There are usually substantial financial implications of downtime, and it’s important to ensure that all parties are fully “incented” to react quickly if a downtime situation arises.

As we all know, downtime has been a problem with many of the larger providers recently. I understand that downtime happens, but where this gets to be a challenge is in the SLAs of these firms. Are you willing to bet your business on this? Below is an excerpt from a leading firm’s Service Level Agreement, which is typical.

“XXXXXX will use commercially reasonable efforts to make XXXXXX available with an Annual Uptime Percentage (defined below) of at least 99.95% during the Service Year. In the event XXXXXX does not meet the Annual Uptime Percentage commitment, you will be eligible to receive a Service Credit.”

This firm goes on to note that the service credit will equal 10% of your bill for the affected period. Thanks.

I have a former customer that once calculated downtime costs for his business at $1000/minute. I also have a current customer that received EU 500/minute penalties for downtime in their ability to communicate and take orders from their customers. So, let’s run some quick math. 99.5% uptime translates into approximately four hours and 23 minutes of downtime per year, or around 22 minutes per month. In the case of my former customer, 22 minutes of downtime per month equals $22,000 of lost revenue. If a business pays $10,000/month for cloud services, they would only receive a $1000 credit for their loss. That’s not acceptable, and I can assure you, they won’t wait around for it to happen again – they WILL look elsewhere.

The bottom line is that while the outage will have financial impact, both in terms of lost revenue and SLA payouts, the major hit will be that of customer confidence. Any credits offered will be insignificant in replacing either revenue or customer perception.

As a SaaS company, we have a lot of moving parts — our network, hardware, operating systems, database systems, our code base, etc. All must work flawlessly together to ensure a great end customer experience. As enterprises seriously consider cloud services, take a cold, hard look at the Service Level Agreements and the real commitment to uptime that the supplier can provide. I think you will be surprised and choose your partner very carefully — which is why we chose Internap as our cloud hosting provider.

For more information about evaluating cloud providers, read the Cloud Hosting Buyer’s Guide.

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Oct 23, 2012

Appterra faces a global interconnectivity challenge head-on

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Apterra global connectivityAppterra is a SaaS global B2B solutions company.  We focus on enabling inter-company transactions between commercial trading partners. Our solutions are cloud based and enable mission-critical multi-company business processes for enterprises in the global supply chain for the manufacturing, distribution and energy industries. As a managed service SaaS solution, uptime is critical for our customers. Simply put, if we are down, they are down and we are out of business.

Over the past several years we have seen substantial growth of our company’s user base within the Asian marketplace; specifically in China. Our global trading hub allows businesses to interconnect with one another and share documents such as purchase orders, shipping details and invoices.

We are committed to a 100% uptime standard as our customers rely on our systems to keep their factories and supply chains smoothly moving forward. With a few rare exceptions, we have achieved an average of more than 99.999% availability. We are also continually monitoring connectivity from locations all over the world including North America, Europe, Latin America, Asia and the Middle East.

Earlier this month, we had a number of Chinese trading partners that were unable to access our system.  At the time, we were 100% up and all data reflected that we had an excellent response time with connectivity in all locations throughout the world with the exception of some users in China and, specifically, on one particular telecom provider. What this meant was that these companies, because they had chosen an internet provider that was not reliable, ended up being unable to conduct business. They could not retrieve purchase orders, create invoices nor could they receive any other information that related to their services. This truly highlights the importance of not being reliant upon one telecom service provider for your business. All of those businesses had only one provider and when it went down, they were down.  As a result, commerce with our primary customer, a global enterprise relying on the timely placement of these orders, suffered critical delays in their supply chain.

This is exactly why Appterra chose Internap for our IP services, with its Managed Internet Route Optimizer™ (MIRO) technology, because if one provider has a problem then we are able to seamlessly transition to another provider and our customers never experience an issue.

As we all become more dependent on reliable and 100% available Internet connectivity for our businesses, I recommend that anyone in business today demand a 100% uptime commitment from their Internet connections. Your customers won’t care if your internet provider was down, as far as they are concerned, you are down.

Because everything that Appterra does is mission-critical to their customers, Internap’s 100% uptime guarantee is a massive risk-reducer. This case study further illustrates the challenge and solution.

Guest blogger: Charlie Alsmiller, CEO of Summa Technology Group | Appterra

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Jun 20, 2012

Trends…shmends and then again, that depends

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Trends are popping up everywhere. In fact there is even a crowd-sourcing website that tracks them whether tech, culture, design, lifestyle or pretty much anything else you can imagine. Just the nail, hair, color and fashion trends for Spring 2012 are overwhelming – one could go broke trying to keep up. One of 2011’s crazes in small business trends was blow-dry bars…yes…blow-dry bars, as in a trained professional who “wets and dries” your hair for $35 a pop. And, it’s a trend that’s sticking around due to success, which according to BusinessWeek “has led to a veritable blowout war on the streets of Los Angeles.” In fact, shops now have opened in Dallas, Scottsdale, AZ, New York, San Francisco and Atlanta, in addition to the several that started it all in Brentwood, West Hollywood and, of course, Beverly Hills.

Then there are housing market trends and financial trends resulting in a plethora of websites such as LearnVest — featured in the Wall Street Journal, The New York Times and CNBC, and named by Time Magazine as one of The 50 Best Websites of 2011 — which targets women and assists with personal finances, budgeting and more.

This all leads me to my mash up for the week: According to a recent article citing an IT-Director.com report, “virtualization, cloud computing and other solutions are creating an environment in which companies have to rethink their disaster and data recovery strategies in light of new IT trends. More and more companies are rethinking their business continuity plans given the current rise of cloud computing, virtualization and big data, which have created a situation where organizations are handling much larger quantities of data than ever before.”

If you happen to be one of those who is sorting through the IT trends and solutions to help manage it all, you may want to check out another recent blog post: Build, buy, colocation or cloud.

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