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IBM to Acquire SoftLayer

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Re: IBM to Acquire SoftLayer

#51

Post by VLM »

mindcrime wrote: post #40
ChuckMcM wrote: post #33

Fun stuff. Remember that IBM got its start by renting you a mainframe with software on it. I've always been struck by how similar IaaS/PaaS type companies are similar to that model. In many ways a data center becomes just a really big mainframe that you're renting out.

Remember that IBM got its start by renting you a mainframe with software on it. I've always been struck by how similar IaaS/PaaS type companies are similar to that model. In many ways a data center becomes just a really big mainframe that you're renting out. Good, maybe it's time for me to do something useful with this personalmainframe.com domain I've been sitting on. We just need to get Matt Smith (of Doctor Who fa…

"Good, maybe it's time for me to do something useful with this personalmainframe.com domain I've been sitting on."

A cloud of Hercules emulators that instantly spin up multiple MVS systems on demand for RJE? I donno what VTAM would think about that. Or a linux on S390 SaaS provider, I guess.

Re: IBM to Acquire SoftLayer

#53

Post by nlavezzo »

danielrhodes wrote: post #36
dewitt wrote: post #5

Worth observing that for all the excitement about the recent crop of billion-dollar Silicon Valley startups, SoftLayer is based in Dallas, TX (and founded only in 2005). I suspect, and this will be easy enough to prove one way or the other after a few years so feel free to call me on it, that we'll see a disproportionate number of successful exits come from /outside/ the valley. My gut tells me that high-cost of livi…

There is one major problem to starting what are to become big tech companies outside of the Bay Area: labor supply. Very few places in the world can feed the labor needs of a fast growing tech company. Even the largest companies in the Bay Area have to go to New York, LA, and elsewhere to hire more people. What that means is that you are welcome to start a company wherever you like, but when it comes time to hire a l…

Our company (FoundationDB) is based in the DC Metro area and we have tons of success hiring and retaining top tier engineering talent. The stories we hear about how hard it is to hire while we're out in SV sound really bad.

I can only speak for DC, but there is a huge labor force here of highly skilled engineers that have been working on (mostly top secret) defense / intel projects at huge government contractors. They know their jobs are there for them again if they leave and decide to come back, and often they are happy to jump ship and work in a startup if the team and product are compelling.

I imagine DC isn't alone in having a niche industry of highly skilled engineers that would be open to startups. Often they're not involved in the startup culture though so it takes some effort to find them.

Re: IBM to Acquire SoftLayer

#54

Post by cleaver »

josh2600 wrote: post #6

IBM is buying SoftLayer to try to go head up with AWS. It's not going to work. Personally I won't buy an IBM product because I know it's just like Oracle: software entrapment. Nothing wrong with that business model it's just not one I want to be involved with. In other news, great job by SoftLayer to exit as pricing pressure from AWS and GoogleAppEngine was going to steadily erode their margins over time. I feel the…

> It's not going to work.

Whether or not it really is an attempt to go up against AWS, it won't work. IBM has not been successful in slim-margin markets like low-end hardware (or in this case hosting).

I currently have a dedicated server with Softlayer (at one point I had three). I actually started with Rackshack which was consumed by EV1, then merged with The Planet, then eaten by SL. I've been looking to move elsewhere, but this seals the deal. I believe IBM can't help but screw it up.

Re: IBM to Acquire SoftLayer

#55

Post by mindcrime »

VLM wrote: post #51
mindcrime wrote: post #40

Earlier quoted context omitted.

Remember that IBM got its start by renting you a mainframe with software on it. I've always been struck by how similar IaaS/PaaS type companies are similar to that model. In many ways a data center becomes just a really big mainframe that you're renting out. Good, maybe it's time for me to do something useful with this personalmainframe.com domain I've been sitting on. We just need to get Matt Smith (of Doctor Who fa…

"Good, maybe it's time for me to do something useful with this personalmainframe.com domain I've been sitting on." A cloud of Hercules emulators that instantly spin up multiple MVS systems on demand for RJE? I donno what VTAM would think about that. Or a linux on S390 SaaS provider, I guess.

I actually have some ideas for a service to develop on that domain, but it's nothing to do with real mainframes. More like "Big Data Processing As A Service" where the "mainframe" bit is just an analogy. I don't have time to work on it right now though, so the idea is just kinda sitting on the backburner ATM.

Re: IBM to Acquire SoftLayer

#56

Post by jamesbritt »

AJ007 wrote: post #19
josh2600 wrote: post #6

IBM is buying SoftLayer to try to go head up with AWS. It's not going to work. Personally I won't buy an IBM product because I know it's just like Oracle: software entrapment. Nothing wrong with that business model it's just not one I want to be involved with. In other news, great job by SoftLayer to exit as pricing pressure from AWS and GoogleAppEngine was going to steadily erode their margins over time. I feel the…

I've used SL in the past and have had business associates use them as well. I experienced nothing but problems, and regularly hear complaints from those who still use it. This may just be a case of IBM needing to acquire companies to add revenue to their financial statements.

Here's a counterdote: I've been using them since they were The Planet and have been very happy. I've wedged my machine a few times and their support is great, too.

Re: IBM to Acquire SoftLayer

#57

Post by notacoward »

danielrhodes wrote: post #36
dewitt wrote: post #5

Worth observing that for all the excitement about the recent crop of billion-dollar Silicon Valley startups, SoftLayer is based in Dallas, TX (and founded only in 2005). I suspect, and this will be easy enough to prove one way or the other after a few years so feel free to call me on it, that we'll see a disproportionate number of successful exits come from /outside/ the valley. My gut tells me that high-cost of livi…

There is one major problem to starting what are to become big tech companies outside of the Bay Area: labor supply. Very few places in the world can feed the labor needs of a fast growing tech company. Even the largest companies in the Bay Area have to go to New York, LA, and elsewhere to hire more people. What that means is that you are welcome to start a company wherever you like, but when it comes time to hire a l…

Difficulty hiring is one of the best reasons to start a company anywhere else. Sure, the labor supply in SV is high, but so is the competition for those workers - including competition from extremely rich and aggressive companies like Google and Facebook who will deliberately lure away your top people with offers you can't match. There are several other places where the labor supply is 80% and the competition is 10%. Lower cost of living doesn't hurt either, and if you can handle remote workers that's even better. Living in the shadow of tech giants seems like a distinctly bad idea unless your goal is to get aquihired by one of them.

Re: IBM to Acquire SoftLayer

#58

Post by dangrossman »

AJ007 wrote: post #19
josh2600 wrote: post #6

IBM is buying SoftLayer to try to go head up with AWS. It's not going to work. Personally I won't buy an IBM product because I know it's just like Oracle: software entrapment. Nothing wrong with that business model it's just not one I want to be involved with. In other news, great job by SoftLayer to exit as pricing pressure from AWS and GoogleAppEngine was going to steadily erode their margins over time. I feel the…

I've used SL in the past and have had business associates use them as well. I experienced nothing but problems, and regularly hear complaints from those who still use it. This may just be a case of IBM needing to acquire companies to add revenue to their financial statements.

That's strange. They're the #1 dedicated hosting provider used by YC-funded startups. They have a reputation as the best facilities, best private network, best control panel and best support staff you can get with rented hardware. They've swapped failed hardware for me in under an hour at 3AM their time, recovered data from a corrupt disk for me at no charge, their reliability and network is generally excellent... what are the complaints you hear?

Re: IBM to Acquire SoftLayer

#59

Post by shrikant »

freehunter wrote: post #29
josh2600 wrote: post #6

IBM is buying SoftLayer to try to go head up with AWS. It's not going to work. Personally I won't buy an IBM product because I know it's just like Oracle: software entrapment. Nothing wrong with that business model it's just not one I want to be involved with. In other news, great job by SoftLayer to exit as pricing pressure from AWS and GoogleAppEngine was going to steadily erode their margins over time. I feel the…

I would be surprised if Rackspace sold out to Oracle, considering how Rackspace has a stated goal to fight patent trolls.

Every principle has its price.

EDIT: Thought I'd add a bit more here.

An entrepreneurial religious young man had set up a niche little bakery in my area, which was supposedly filled with pensioners and people nearing retirement. This bakery catered only to conservative Hindu beliefs (fully vegetarian, no egg or meat products or derivatives used in any of the goodies, images/idols gods and goddesses all over the place).

A couple of months later, he put up a sign that said "We don't sell egg puffs here" (a savoury pastry with a boiled egg at the centre). A couple more months later, the sign was gone, a new boy was hired to serve at the counter, and egg puffs were on the menu.

Re: IBM to Acquire SoftLayer

#60

Post by vidarh »

josh2600 wrote: post #32
blparker wrote: post #10

Earlier quoted context omitted.

Interested in your opinion as to why you don't think this acquisition will help gain market share on AWS.

IBM can't build a cloud of their own or they wouldn't have needed to buy SoftLayer. Since they don't have this expertise, they pay a ton of money for a company that their perceive as knowing "the cloud". This is doubly ironic because its IBM that introduced the mainframe to the world, but that's another story. SoftLayer and everyone not named Google or Amazon can't drop their prices 40+ times every 5 years because th…

In 2000, Telia got a single IBM G6 mainframe hosting 1500 virtual Linux images. You'll note that's a tiny, "ancient" model.

IBM currently quotes ability to present "thousands" of virtual Linux images on a single current zSeries mainframe. These servers have virtualised storage IO, virtualised network interfaces etc. and management interfaces older than most of the developers on the hipper cloud platforms.

So to claim IBM "can't build a cloud of their own" is quite ridiculous - they can deliver single mainframes with more capabilities than most smaller cloud providers entire infrastructure for many types of workloads, and have decades of experience aggregating workloads on collections of servers like this (and single system image clustering across up to 32 zSeries mainframes - some simple math should indicate you're then in the tens of thousands of VM images managed as one single system - this with software originally introduced in 1990....), as well as decades of experience building super-computing clusters with accompanying orchestration and management. Heck, they have a separate division doing integrated service management software.

Claiming they can't build a consumer level / low end cloud solution would be more believable, and would explain the SoftLayer acquisition. But there's far more to this market than going for startups who order a handful of vm's.

> When all you have is hosting, you can't lose money on hosting.

That might have become an issue for SoftLayer in the long run if they remained independent.

But IBM is a services company. And one that is an expert in extracting money from customers by building very deep and far reaching client relationships when you can afford them. They could lose money on hosting for the next century if they like, and still see it as a cheap foot in the door for their sales team if it helps them reach new customer segments.

> Google and Amazon are playing the ultra-thin margin long game and the result is that they hope to destroy the competition with an aggressive pricing floor.

Amazon at least is priced ludicrously high compared to providers like Softlayer that can offer hybrid "dedicated + cloud" solutions. If Amazon can compete on price in that market, they've so far not demonstrated any will to do so. Amazon is priced well for the batch "bring up ten servers for two hours" market, though.

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