Opus Interactive Adopts VMware Virtualization

Proactive companies such as Opus Interactive are adopting virtualization, expecting long term gain for short term pain, and taking advantage of channel program opportunities.

by Alex Goldman ISP-Planet Managing Editor [November 17, 2008]

Webhosts large and small are threatened by the latest price drop in the ISP industry, the ability of companies to pay for virtual machines instead of dedicated servers. .

Portland, Ore.-based webhost Opus Interative is not your average independent ISP. The company spent several hundred thousand dollars on a data center upgrade two years ago (see Data Center Grows) and has just invested more.

It invested in a virtual server offering.

"We put five engineers on the virtualization project back in mid-2007," explains Eric Hulbert, Opus Interactive's CTO. "We did testing with HP beta gear. We were an early adopter of blades. We wanted to maximize performance, and also minimize the footprint and the power and cooling needs of the equipment."

Hulbert was looking for virtualization software that would work well with a SAN from LeftHand Networks, a company that was acquired by HP on October 1, 2008.

"We looked at Xen and Virtuozzo but it came down to VMware. They were leading the market and they had wonderful investors. Intel had pumped a ton of money into them."

VMware had several features that Hulbert was looking for. He's particularly enthusiastic about VMotion, which allows hosts to migrate virtual machines with zero downtime. "The customer can be online and be in our cluster, and we can be transferring the server between nodes and they do not notice it's down. VMotion is incredible."

So Opus joined VMware's new service provider program.

The strategy
"We own and operate one data center, but we have equipment in other data centers," explains Jason Nuss, COO of Opus. "Our model is a micro data center concept. We have a local presence with engineers and tech support and sales people. We put small footprint servers in local data centers where they need to be."

But aren't you competing with yourself, offering cheaper virtual servers to customers who are presently paying more for dedicated servers?

"When you move a customer from a dedicated server to a virtual server, they're more sticky," says Nuss. "A customer on a dedicated server will need to upgrade their hardware when the server's near the end of its cycle. With a virtual server, there's no hardware upgrade plan."

Management is easier for Nuss, too. "There are fewer pieces to manage."

You have to be thinking long term for it to make sense, he notes. "It's short term pain for long term gain. You may lose some revenue, but you have a better relationship with the customer, and they start referring business to us. For our most successful customers, a virtual platform gives them room to grow. They don't need to look to another provider to grow."

Hulbert points out that ignoring virtualization won't make it go away. "If we don't want to show the customer what's out there, someone else will market to them. Instead, we try to stay ahead of the curve."

Services
In the long run, the ISP hopes to sell value-added services to customers it has migrated to the virtual platform. Across the industry, I'm seeing companies focus on getting the basics of services right.

The basics is exactly what Opus is offering for the moment: private virtual dedicated servers, mail servers, load balancers, firewalls, server backup, and a grid offering using 3Tera's AppLogic.

"We act as virtual consultants and experts," says Hulbert. "Companies may ask us for one thing and we show them how to save money in other ways, whether it's reducing capex, gear, and licenses, or green savings on a carbon footprint and power consumption."

So far, Nuss says, it's been a very good investment. "We were cash flow positive in our investment in the VMware cluster in month one. We had tested the products, knew we could sell it, and turned those who were interested in it into customers very quickly."

"Now that we're officially in the WMware program," says Hulbert, "and we have our logo on their site, we expect to see even more interest."

Conclusion
Do you have any advice for independent ISPs that would like to do what you have done? "You have to take a look at your user base, at your customers, and at the industry and see where they're all heading," says Nuss. "We've been good at not getting stuck at being best at just one product. We aim to be the best at everything we do and we build deep partnerships with providers of complementary technologies to accomplish this. This ensures we will remain competitive and relevant. It was easy to see the writing on the wall on connectivity a few years ago. We were focused on DSL and we were riding a wave, but we knew we had to continue to develop other areas like hosting, because nothing lasts for ever."

"DSL prices kept going down. You have to diversify so that you're not depending on selling something that's a commodity. My advice would be, 'always be looking for opportunities in the market. With technology, it all meshes, and there may be opportunities in areas you're not looking at.'"

—End