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For Executives, Entrepreneurs, and other Digerati who need to know about SaaS and Web 2.0.

Interview With 3Tera’s Peter Nickolov and Bert Armijo, Part 2

Posted by Bob Warfield on October 24, 2007

Overview

3Tera is one of the new breed of utility computing services such as Amazon Web Services.  If you missed Part 1 of the interview, it’s worth a read!

As always in these interviews, my remarks are parenthetical, any good ideas are those of the 3Tera folks, and any foolishness is my responsibility alone.

What can a customer do with your system, and what does it do for them?

3Tera:  AppLogic converts applications, all of the load balancers and databases, firewalls and Apache servers, to metadata. This is done simply by drawing the topology of the application online, as if it were a whiteboard.  Once that’s done, your application becomes completely self-contained. It’s portable and scalable. In fact, it literally doesn’t exist as an app until you run it, at which point AppLogic instantiates it on the grid.

A 2-tier LAMP stack application can be set up in 5 to 10 minutes.  Once you’re done, you can operate your application as easily as you open a spreadsheet. Starting, stopping, backup and even copying are all single commands, even for applications running on hundreds of cpus. You can also scale resources up and down, from say 1 ½ cpus to 40 cpus, which covers a range of say 6 to 3000 users. You can make copies, or even move it to another data center. 

To make it easy to use existing software, we have what we call Virtual Appliances, which are a combination of virtual machine, virtual network and virtual storage that act together. You can install almost any Linux software in a virtual appliance and then manage the appliance as a unit, which is better than having to go machine by machine.
Applications are then created by simply dragging and dropping Virtual Appliances on an online whiteboard, and become a type of template.  We offer a bunch of these already configured for lots of common applications like the LAMP Stack, and there’ s even one for hosting Facebook applications that somebody did.  Probably half our customers bring everything up with these pre-defined Virtual Appliance templates and they never change anything there, they just run.

In a couple of weeks we’ll introduce new functionality we call Dynamic Appliances, a sort of Infrastructure mash-up, that let’s you package data center operations in the same way.  You can implement performance based SLA’s, offsite backups, and virtually any other policy.  Once added to an application, the app will then manage that function for itself, becoming more or less autonomous.

Our larger Enterprise customers have told us how hard it is (impossible really) to implement standard policy across several hundred applications, but we make it easy with Dynamic Appliances because you’re dealing with the needs of just the specific application.

The bottom line is we eliminate the need for human hands to touch the servers.  You can do it all remotely, and we make it possible to automate most things.  You can configure, instrument, and manage even the largest online services with a web browser.

Bob: (I’ve spoken to a number of people about the 3Tera system, and they all confirm how expensive and painful it is to setup and manage servers.  Jesse Robins over on O’Reilly Radar recently wrote a post called “Operations is a competitive advantage” that talks about exactly what 3Tera offers.) 

What kind of technology is behind these capabilities?

3Tera:  There’s quite a lot, as you can imagine.  Let’s take storage as just one example.  We decided up front that we needed to run entirely on commodity hardware because it keep’s our customer’s costs low.  There are no hardware SAN’s or NAS storage as a result—we work entirely off the local disks attached to the servers in the grid.

But, we also felt users needed redundancy and high-performance. The solution – we’ve written a virtual SAN that runs within the grid, controlling all the available storage out on the grid. Our volume manager runs on top of this and makes mirroring totally painless.  If you lose your disk or a server, access to data isn’t interrupted and we’ll mirror that same data again as well. 

People complain that Amazon has no persistent storage, but Amazon didn’t need to have persistence for their application, so you can’t blame them.  If you choose the same architecture as them, it works great, but if not, you have a lot more work to do.  The trouble is, all the apps we see need persistence for their databases, so we gave it to them.  We’re offering infrastructure that matches the common architectures everyone uses.

The other important foundation for the service is our component assembly technology. This is what allows AppLogic to capture infrastructure definitions using the whiteboard metaphor and package the application. More importantly, it’s what allows AppLogic to then convert that into running applications on the grid.

Bob: (I thought the virtual SAN was very cool.  It will be interesting to see how Amazon addresses the persistence problem.  There are several companies working on a solution for mySQL, but I suspect Amazon has their own internal efforts as well.  OTOH, Amazon’s S3 has a lot of fault tolerance that seems to go a bit beyond 3Tera’s out of box capabilities.  The truth is that a finished complex application will require a number of different capabilities in this area ranging from the immediate problem of keeping the database up to the problems of making sure their are good off-site backups and replication.)

Who are your competitors?

There really isn’t much of anyone unless you want to think of Amazon as a competitor.  We don’t, though, because most users are coming from collocation or managed service providers today.

Challenges for Utility Computing

What concerns do your prospects have when you first meet with them?

3Tera:  Their first concern is how long it will take to learn the system.  It turns out its really easy, and most users are up and running in a couple weeks.  Just to make sure customers know we’re going to make them succesful, we put together a program we call the Assured Success Plan.  It’s designed to take a customer from zero to full production in 2 to 4 weeks.  We charge $300/month for it.

Customers who sign up for the Assured Success Plan get a 1:1 relationship with an assigned 3Tera engineer.  They communicate via WebEx and teleconference.  Their first session is an orientation, and their homework is to just install some app on a grid.  The engineer and customer choose which app.

The second session, they go over the homework, and then they start talking about how to fit the customer’s app onto a grid.  By the third session, they’re ready to try to install the app.  The customer is asked to make a first go of it, and then the 3Tera engineer goes over how the customer did it and gives feedback on how to do better.

The fourth session is really interesting.  Here the customer tests failures and learns to deal with it.  It’s really easy with our management tools to simulate a failure anywhere in the grid.  So the customer practices failure management and recovery.  Most customers never get a chance to thoroughly test these failures when building out with physical servers because the time and cost is prohibitive, so we’re adding a lot of value going through the exercise.  The customer, meanwhile, is getting comfortable that they can manage the system when the chips are down.

Bob: (The assurance program sound like an excellent and very practical introduction and training for the system.  This is classic SaaS.  Why do a proof of concept if you can be up and running in the same time?)

Do customers stay paying for ongoing service?  How do you do Tech Support?

We made the Assured Success Plan cheap enough that we think customers will like to keep it running. After the initial consultations, it converts to pre-paid support.  At the same time, we offer support in units of 5 hours for $300.  Most customers buy at least a unit of support as part of their contract, and we make it easy for them to flex that up if they’re having an unusual amount of trouble.

What about costs?  How do customers get comfortable with what you cost?

First, understand, in many cases they can’t do it at all without a service like ours.  Our service is an enabler.  We make it possible to fund a data center pay-as-you-go on a credit card.  Even in Enterprises, we see a lot of customers go hosted, label it as a “proof of concept” to keep IT happy, but once things are running, they never go and move it to their own data center.

Second, our hosting provider partners are brutally efficient at cutting costs and passing those savings along.  They know they have to be competitive and they’re good at it.  We add a surcharge on top of that, but it’s offset by your savings in management overhead.  You don’t have to buy or write your own infrastructure software, and you can manage your grid with far fewer people.  One person part-time can run 100 servers easily.  A full time person could run probably 500 servers.  Do the math on what a person costs and you’re net/net way ahead.

Our most popular configuration is an 8 server.  It costs about $5000/month as a grid.  If you shopped very carefully, you might save 30% on that.  However, you’d have none of the management advantages we offer.  You’d spend that difference very rapidly either developing infrastructure to automate management with scripts, or hiring people to do it by hand.

Bob:  ( I asked one Director of Operations for a SaaS vendor what they thought of a 30% markup for this kind of service.  He laughed and said they would make that back in productivity savings so quickly that 30% would never be an issue to them.)

What’s a nightmare story you helped a customer with?

Imagine a largish bank.  What do you suppose their procedure and policy is to release code?  They need 1000 signatures over 9 months!  Most of the signatures involve internal manual processes.  They’d developed numerous layers of management to ensure stability and now they can’t get it done internally any other way. Because of this, many projects simply couldn’t get started. The cost wasn’t justifiable.  AppLogic eliminates many of those manual processes because the application is packaged as a unit. No one needs to touch the servers, the firewalls, or the load balancers. Plus, test applications can run in a hosted configuration, outside the corporate data center where there’s no interference with production systems. When they’re completed, they can be migrated inside with a single command. Thus, many of the issues with test deployments just don’t apply.

So this customer was able to move their project, which was dead in the water internally, into PoC. 

Next Installment

Next installment we’ll wrap up with a discussion of SaaS Sales and Marketing and Business Model thoughts from 3Tera.  Be sure to click the “subscribe” link at the top left of the blog page so  you don’t miss out on future posts!

One Response to “Interview With 3Tera’s Peter Nickolov and Bert Armijo, Part 2”

  1. […] Interview With 3Tera’s Peter Nickolov and Bert Armijo, Part 2 […]

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