During the past year, I have had a few conversations with the CIO of one of our e-commerce customers in Europe. And like many online shops, his company was challenged by seasonal peaks of web traffic. I have often heard about these seasonal peaks, but I could never grasp how high they can go and their cost implications to an organization!
Through our partnership with Amazon Web Services and the addition of our newest “Pay as you Go” model, we are helping customers to easily scale their network to meet such demands and ultimately, to improve their user’s experience quality. In addition to the advanced load balancing features, the Alteon VA has flexible migration and payment models.
With the aforementioned customer, their seasonal peaks went as high as 10 times the amount of page views per day (compared to their annual average) and they normally last 5-7 days, twice a year. The problem with those seasonal peaks is that the organization had only two options to deal with them:
Invest More – They could invest in an IT infrastructure that can handle 10 times the average traffic on their site, BUT that would mean that 90% of their IT resources would sit idle for 340 days of the year.
According to the customer – there was still a valid business case to that approach (the seasonal peaks would make them a significant profit), but the investment in an infrastructure can handle the traffic increase would eat an important part of his budget that he could re-allocate to produce additional online products and revenues.
Invest Less – The other option was to invest less in the infrastructure and compromise on the quality of experience they provide to their end customers during those seasonal peaks. This, of course, has business implications that span beyond the period of those seasonal peaks – as the CIO of that company explained to me: “If a customer visits my site and gets a poor response time, he will not only give up on the specific buy he wanted to do, but he might not come back to my online shop again!”
Option number two was out of the question for him.
When I first discussed our Alteon VA solution for Amazon EC2 with the same CIO, he was thrilled. Apparently, they were already planning to cut their IT infrastructure costs by using Amazon compute resources during seasonal peaks, but they still had the challenge of how to distribute traffic between their local datacenter and Amazon’s AWS servers. The whole process involved a lot of manual work, which naturally is prone to human error.
Since this customer was already pleased using Alteon for their private data center, the ability to use Alteon VA as an AWS application delivery controller, enabled them to use global server load balancing (GSLB) between their local data center and AWS servers. This allows the distribution of traffic between the cloud and private datacenters for optimal load distribution. That is how we won our first customer for Alteon on Amazon and they gradually gained confidence in their Amazon EC2 deployment and migrated more and more of their datacenter infrastructure to the Amazon AWS cloud.
A couple weeks ago during a conversation with this same CIO, I asked why they’d recently stopped purchasing Alteon VA licenses for Amazon. Had they stopped their migration to Amazon?
The CIO told me that they were acquired by another large e-commerce company and that they’d had to freeze all investments for re-assessment. Now he has a big problem – the holiday season is coming (Black Friday, Christmas) and he doesn’t expect that the current infrastructure will be enough to handle this year’s expected traffic peaks. One reason was that he still needed more Alteon licenses for the Amazon setup. His budget freeze wouldn’t allow that for months and at that point, it would be too late.
I offered a solution in the form of the new “Pay as you Go” model of Alteon VA for the Amazon Web Services Marketplace and it worked. This e-commerce customer already had an ongoing OPEX budget for their Amazon AWS operation and now that the Alteon VA on Amazon is also available on a pay-per-use model, he could add it to his Amazon OPEX budget, just for the holiday season, without having to wait for approval of new equipment/CAPEX budget. Although the calculation we made didn’t show any cost advantage (in a 2 year comparison) for the pay-per-use model vs. the “Bring Your Own License” (BYOL) model, it still solved the operational challenge of having to acquire more licenses or make more equipment purchases before a budget was approved.
The lesson I have learned from that story and that I wanted to share with you is two-fold:
Many of our customers can benefit (or already benefit) from migrating at least part of their application, for at least part of the time, to the cloud/Amazon’s AWS. The cost savings is easy to calculate and to understand and our Alteon VA for that environment is an important part of that picture.
Sure, our customers can appreciate our technological solutions, but sometimes, providing a business-oriented solution to customer challenges is just as important to them as developing another cutting-edge capability in the product.