[AusNOG] Netflix, AWS and Softlayer vs. Australia

[Tim Butler]

Baz,

SoftLayer offer a great service and platform, even as a competitor I'm 
happy to see them in Australia.

In regards to your predictions, I think they're a little off target. 
Number 1 has been occurring for many years. Data prices have been 
dropping (although it's still not as cheap as the US) and anything 
latency sensitive has always been hosted in Australia. The usage of 
CDN's also help greatly in this regard, especially since players like 
CloudFlare have a free offering.

Number 2, everyone's been predicting the "death" of local hosting 
companies for years now. It was the same thing when Amazon hit Australia 
yet I haven't seen any of the major players shrink nor go out of 
business. I've seen the opposite occurring. The marketplace is growing 
at such a rate that more competition is mostly competing for new 
business, not existing. We've certainly seen continuous, strong growth 
over the last few years and we're only a very minor player. I'm sure the 
others who are more direct competitors with SoftLayer will probably be 
seeing the same, certainly the companies I've talked to are.

There's only a small percentage of companies who have data requirements 
in the multiple TB ranges. Even then, generally they have the budget to 
afford the data so it's a non issue. I therefore don't see SoftLayer 
having a negative impact on the marketplace nor anyone losing 
significant business to them.

Just my 2c anyway.

Thanks,

Tim.


On 02/12/14 07:51, Oz Nog wrote:
> Hi all,
>
> Having recently turned up another Softlayer server in Melbourne, I realized that it was a bit of a watershed moment. For the first time domestic content distribution at scale is affordable for anyone. For the first time, I might not even run out of monthly traffic quota by default. Domestic servers are now good enough and cheap enough to actually run a domestic Internet business from Australia. Imagine that!
>
> This in itself might not mean much to all you distinguished Ausnoggers, but consider this from an operational perspective: Domestic origination is now cheaper than domestic backhaul. It certainly is cheaper than NBNco CVCs!
> That might end up being a wee bit of a problem. Anybody with a couple of hundred bucks can dump 1Gbps of traffic on your network. That sound you are now imagining hearing is your switchboard lightning up with customers complaining about congestion. Good luck trying to explain to them the finer points of contention rations and network design.
>
> To give a little context, this is what you get by DEFAULT from Softlayer for a couple hundred bucks: Xeon server with 1Gbps Internet uplink, 20TB of traffic and a solid network.
> Softlayer's network is good all around. They've got their own quality international network, domestic routes go mainly via Telstra, Equinix and Pipe. I have no problem saturating the GE NIC. Looking glass for the curious: http://lg.softlayer.com/
>
> So far the only downside with Softlayer is that they do not have a Sydney DC as an alternative.
>
> By looking at my tea leaves, I predict the following:
>
> 1/ All latency sensitive and all bandwidth intensive apps/services will start migrating back to Australia, fueling the pent up demand of all connected Oz residents. AWS already made a crack, Softlayer opened the floodgates and Netflix is about to bust the dam wide open. Where will you be when your ports saturate?
>
> 2/ Local hosting providers are going to have a hard time competing with the likes of AWS and Softlayer that operate at scale and have direct connections to Telstra et al. Perhaps they can all become resellers or find some small niche to occupy?
>
> All in all, it's going to be an interesting new year.
>
> In closing, heads up everybody! The data tsunami is coming!
>
> Cheers,
>
> Baz
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