Category Archives: Hosting Industry

Twenty Years: The Story of One of the Internet’s Longest-Running Hosting Companies

Superb Logo

Every well-run company keeps itself squarely focused on solutions that alleviate common pain-points. Superb Internet was created in 1996 to treat a problem encountered by its founder when developing a game with a collaborative global team. It’s grown exponentially over the years and is now one of the longest-running web hosting companies in existence – celebrating a full 20 years in operation on July 23, 2016.

  • 1994: Origins in treating pain points
  • 1996: Formation
  • 1999: Industry front-runner
  • 2001: First data center
  • 2002: Expansion
  • 2005: To the West
  • 2009: And then there were four
  • 2011: Security focus
  • 2013: Cloud embrace
  • 2014: Enterprise-grade compliance
  • 2015: First fully government-authorized cloud provider
  • Today: Starting a third decade of hosting service

1994: Origins in treating pain points

As is often the case in business, Superb Internet arose from a pain-point experienced by its founder. Like any online entrepreneur, Haralds Jass wanted to see his project come to fruition without any performance problems. What was a little atypical about Jass’s experience is that he was only fourteen years old!

Superb Entertainment was composed of Jass and a group of talented developers, graphic artists, story-tellers and other creators from all corners of the world. The team set out to create a game that was revolutionary, going far above and beyond the current offerings. Called Woodlands, it was fully immersive, highly realistic, and included an original musical score packaged using newly minted MP3 technology.

The game attracted the attention of an established publisher who could potentially fund its further development and handle the global distribution.

Almost as quickly as the dream seemed headed toward realization, though, everything began to fizzle. Commercial web hosting was just getting started, and the shared hosting service the developers were using subjected them to crashes, power outages, and frequently slow data transfer. Superb Entertainment tried numerous hosting providers, and there was no respite from these problems. Poor reliability was clearly an industry-wide problem.

Fast Company indicated in 2012 that “customer pain is your most important resource” because it drives you toward meeting genuine user needs. The same is often true with business leaders as they seek to solve their own problems, and in turn, those of others. Jass started looking at the hosting industry closely and determined that a company was needed to provide service that was “more responsive, more reliable, and more customer-centric; a service that customers could always depend and rely upon.”

1996: Formation

During the summer of 1996, Haralds was ready to move forward and solve the problems he’d personally experienced with web hosting by becoming a provider himself. In so doing, he intended to provide what no one else in the market could: reliable, dependable service. Jass studied O’Reilly’s Essential Systems Administration for several weeks, lined up an initial group of customers, and incorporated Superb Internet Corporation (July 23, 1996). Through these initial steps, he had created an Internet Presence Provider – the original term for a web hosting company. To get Superb underway, Jass purchased a Sun SPARCstation 2 dedicated server for $600 per month via a loan from his family dentist; the initial investment was paid back only ten days after launch. To this date, that remains the only loan or financing that Superb has ever had.

By end of the year, Superb Internet was already using seven dedicated SunSPARC servers to host over a thousand websites. The growth was nothing short of phenomenal.

1999: Industry front-runner

By summer 1999, just three years later, Jass had become a college student with a company that owned 400 servers and hosted over 10,000 unique sites. Superb Internet was regularly rated as the best hosting provider by various industry analysts, especially in terms of service quality and reseller programs. Plus, Superb was the first provider to offer name-based virtual hosting (reducing client costs) and customer-controlled virtual hosting with unlimited third level domains. These innovations carved out a solid place for the firm as a hosting industry bellwether.

2000: First data center

By 1999, it was becoming more obvious that the company would greatly benefit from Harald’s full-time management. He left school and took on a huge immediate project: transitioning Superb from colocation to supporting and maintaining its own datacenter. After conducting a thorough search of the United States, Jass decided on a datacenter in the highly networked hub of Washington, DC. DCA1 in Georgetown, Washington, DC, was opened in early 2000.

In 2000, Superb was also the very first provider worldwide to offer commercial VPS (Virtual Private Server) service, the predecessor of today’s cloud; Superb called it the Superb Power Server (SPS). The VPS (SPS) service was designed as a step in-between shared hosting and a full-fledged dedicated server. In this way, it filled a gap in customers’ service demand and made owning a fully customizable operating system and set-up environment more affordable than ever. Superb was, as always, true to its motto of “Ahead of the Rest”® – leading the industry, while others followed years later.

2002: Expansion

The next year, Superb Internet added another data center – DCA2 in McLean, Virginia. Also in 2002, the IP backbone of HopOne Internet Corporation, the datacenter and network operator that Jass founded in 1999, reached the west coast. Since Superb Internet was then its largest customer, HopOne effectively became the first ever web-hosting coast-to-coast IP network. To this day, it remains one of the world’s best connected networks, reaching the majority of Internet routes directly (free of intermediary transit networks). These two changes more than quadruples the company’s server capacity and improved network speed and reliability. Dedicated servers and colocation, for the last several years is an ever-rising part of the business, became the primary business in 2002, further broadening the client base and better positioning the brand as a major player in reseller hosting.

2005: To the West

Wanting to better meet the needs of companies with West Coast demographics, Superb opened a third datacenter in 2005: SEA2, located in Seattle, Washington. This location, which offered multiple diverse-path fiber-transport circuits for premium connectivity, also allowed high-demand customers and those with mission-critical needs to perform geo-load-balancing and replication on both of the coasts.

2009: And then there were four

Just a few years later, a fourth datacenter was added – DCA3. This one was located in Springfield, Virginia, and was upgraded to meet the strict redundancy expectations at Superb. Like the other datacenters, this one was staffed with certified engineers working around the clock to make sure all systems and data were kept uncompromised.

2011: Security focus

Superb Internet became increasingly recognized as one of the most secure web hosting companies globally, winning awards from several respected security and pro-Internet institutions.

2013: Cloud embrace

This year the Superb Cloud platform was introduced, that actually resulted from a full six years of design and development. The Superb Cloud was the culmination of tens of thousands of hours spent researching, testing, and developing; resulting in a next-generation system with 100% high-availability and impeccable performance.

Distinguishing characteristics of the Superb Cloud included a modern distributed storage system and an underlying 40 Gb/s InfiniBand network. The former offered the absence of any single point of failure, with performance equivalent to local storage. The latter had previously only been used in super-computing applications, this being one of the first commercial hosting implementations of this revolutionary technology. Using InfiniBand in the cloud architecture resulted in real-world performance that was lightning-fast – many times better than even the theoretical maximums of the lower-cost and much more rudimentary 10 Gigabit Ethernet protocol favored by others. Plus, it is completely free of packet loss and jitter and has a completely decentralized high-availability architecture.

Additionally, Superb Internet differentiated itself from the market by guaranteeing and always allocating resources exclusively to each customer. This decision provided for a fully predictive performance, a first in the cloud hosting field.

Through these customer-centric technological approaches, the Superb Cloud delivered on what Superb set out to do back in 2007 when the R&D process started: deliver a cloud that was in every way better than a physical dedicated server. In other words, the Superb Cloud offered the same or greater performance than dedicated systems: comprehensively guaranteed resources; a fully distributed architecture, free of single points of failure; and the predictability, reliability, high availability, and 100% uptime that only the modern cloud allows.

RELATED: So that we can avoid any single point of failure for optimal reliability, Superb Internet’s cloud infrastructure uses distributed rather than centralized storage. Along similar lines, we opted for InfiniBand over 10 Gigabit Ethernet for guaranteed always-zero packet loss. Explore our cloud.

2014: Enterprise-grade compliance

In 2014, Superb announced that it was building on its cloud offerings and centering itself on better meeting the needs of enterprises. The enterprise growth that the company started to experience was in two different areas: infrastructure-as-a-service (IaaS), i.e. cloud hosting, and core underlying infrastructure, i.e. network/datacenter services. Working closely with companies in the law, finance, and healthcare verticals gave Superb a better sense of the needs and expectations of enterprises with sophisticated compliance expectations.

One thing that Superb Internet knew would attract more of these types of clients was getting certified and audited as meeting various international standards. That way potential clients could know that a third-party organization had assessed and verified the company’s architecture and processes. One major form of compliance adopted in 2014 was SSAE 16 (Statement on Standards for Attestation Engagements 16), a set of guidelines developed by the world’s largest accounting professional association. The American Institute of Certified Public Accountants (AICPA) developed and continues to amend this standard, entitled “Reporting on Controls at a Service Organization.” Other standards and certifications Superb attained in 2014 include PCI-DSS, ITIL (the Information Technology Infrastructure Library), and two major, world’s toughest international standards: ISO 27001:2013 (Information Security Management) & ISO 9001:2008 (Quality Management) Certification & Registration. It should be noted that practically no other hosting provider has been able to achieve ISO 27001 and ISO 9001 Certification & Registration with the International Standards Organization.

Finally, in November, Superb started a key strategic partnership with OnApp called CloudPOD, making it a lot easier for anyone to be able to design and provision their own custom-build private cloud IaaS architecture. This out-of-the-box, turn-key solution is delivered through collaboration with OnApp and motherboard company Supermicro. It features Superb’s world-exclusive InfiniBand networking technology, put in place to outperform the 10 Gigabit Ethernet protocol used by many providers, and highly efficient distributed storage technology.

2015: First fully government-authorized cloud provider

Last year, Superb continued to pivot toward compliance standards so that it could more clearly indicate its ability to supply secure, mission-critical services to enterprises and government institutions. This shift was essentially a broadening of the firm’s approach since it was still completely dedicated to the huge and loyal SMB base that kept the company in business for 20 years.

The transition toward better meeting strict public-sector requirements was allowed by the company’s attainment of a GSA Information Technology Schedule 70 contract with the US federal government in May. This approval was granted by the US General Services Administration, the federal government’s procurement agency. With this federally approved status, Superb Internet was Ahead of the Rest® again as one of a small number of facilities-based providers of enterprise-equipped web hosting, colocation and cloud to federal, state, and local government institutions. This contract allows Superb to be offered through the federal online shopping portal, GSA Advantage.

In September, Superb Internet again made a name for itself as an industry bellwether with an award from the General Services Administration to sell pre-authorized Cloud Computing Services to government agencies at all levels. This became possible through an invitation for Superb to sell SIN 132-40, the most recent update to GSA IT Schedule 70. With this award, Superb became the very first organization to offer high-demand cloud solutions through the official preapproved federal platform that speeds up the procurement process for government IT buying.

These types of approvals, along with the various compliance mechanisms, have won the company clients such as the United Nations, World Health Organization and various agencies at all levels of government.

Today: Starting a third decade of hosting service

Now, this story has sounded like it was all about us; but keep mind, all of the above steps were taken to provide better service. Since Superb Internet Corporation’s formation in 1996, our company has been built on the satisfaction and loyalty of our customers, as directed by the leadership of Haralds Jass.

When we initially transitioned to our own datacenters and network, we had 400 servers. Today we have more than 10,000. In other words, we have quite literally expanded more than one-hundred-fold just in terms of the number of machines we own. Through our infrastructure, we host hundreds of thousands of websites.

As our upward trajectory continues, it is our commitment to provide the best possible service that keeps Superb Internet Ahead of the Rest®. In fact, “Customers First” is a core operational principle at Superb; as Jass often says internally, “Without our customers, there is no us.” On July 23, we will celebrate twenty years of treating customer pain-points just as we alleviated our own.

Tips to Help You Pick Out the Right Web Host

Web Host

Picking out a low-quality web host is one of the top five mistakes companies make in setting up and operating their websites. Here are a few elements to evaluate to be certain your web host is strong.

  • Poor Web Host Selection: a Common Website Mistake
  • Eight Elements for Selecting Web Hosts

Figuring out which web hosting company deserves your business can be a bit daunting. After all, every service out there claims to be customer-centered, have virtually no downtime, and be staffed with experts; then you run into a problem and realize it’s actually the opposite.

Let’s look at how to choose a good company to provide your business’s hosting. First, though, let’s explore why web host selection is one of the top mistakes people make in running their websites.

Poor Web Host Selection: a Common Website Mistake

Just like there are plenty of opportunities for success online, there are also seemingly innumerable ways in which to make mistakes with your website. That’s a problem: websites really do need to be excellent because they are so central to business in 2016.

Here are four top errors made by businesses with their websites, according to John Rampton of Forbes:

  1. Failure to develop and execute a business and marketing plan
  2. Thinking that running a website is hands-off or low-maintenance
  3. Excessive emphasis on design and visual appeal without compelling copy (“On top of having a website that’s easy on the eyes, it needs to convey the message you’re trying to present,” says Rampton, “such as your business objective, plan of action for visitors and the quality content that you’ve been busy creating.”)
  4. Selecting weak web hosting

Specific to the issue of hosting, Rampton notes that many businesses actually use free hosting services – only to later realize that they don’t own the content and can’t remove it because of vendor lock-in. Even if you choose a paid hosting service, you can quickly run into problems with speed and reliability. For these reasons, carefully selecting your web host is important.

Eight Elements for Selecting Web Hosts

Here are eight elements to guide the selection of a strong hosting company to meet your current and ongoing needs:

  1. Strong networks

You want to choose a company that has strong hardware and taps the power of excellent networks. For example, Superb Internet’s Coast-to-Coast proprietary network infrastructure includes 11 sites in five states across the continent – providing direct connectivity to all the primary worldwide Tier 1 backbones and ISPs.

  1. Cost

Affordability will always be a key concern when looking at any service. Just remember that you don’t want to pay so little that the company isn’t providing support or the hardware backing your site is cheap.

  1. Infrastructural or support constraints

Think about what you want to do with your site. If you want to have rich content on your site, engage your audience with videos, and sell online, it’s in your best interests to invest in high-quality hosting.  You don’t want to be constantly frustrated with performance weaknesses when you are trying to grow your business.

Call the web hosts you are considering and ask their support staff questions so you know exactly what you are getting.

  1. Tech support availability

Many people consider tech support to be a deciding factor for what hosting companies they are willing to take seriously.

“When my site, for some unknown reason, goes down, can I call up and get a real, live person on the phone?” asks Blue Derkin in Hongkiat. “And, more than that, can they find out what’s wrong and fix it, or at least tell me what I need to do to get my site back online?”

  1. Standards & certifications

Even if your company doesn’t require standards or certifications such as SSAE 16 auditing or ISO 27001 or HIPAA compliance, look for companies with these types of designations. Why? By getting third-party verification that they meet certain quality and security standards, companies demonstrate that they are adhering to hosting industry best practices.

  1. Reviews

See how the company is being discussed online. Do they have a good reputation with the people who actually use their service every day?

  1. Administrative UI (user interface)

You should be able to perform simple tasks on your own without always relying on the hosting company’s support team. Make sure that you are able to easily install apps such as WordPress; review email, manage FTP accounts, etc..

  1. Scalability

Finally, think hard about the future: hosting is a long-term relationship, ideally. “[W]hat you consider adequate hosting now might not meet your needs two years from now,” explains Derkin, “once you start selling your wares online and getting some good traffic to your site.” Make sure that the hosting company you select is able to scale its solutions so that you can grow seamlessly rather than having to jump to a different host.

What You Want From Web Hosts, and How Bad Hosting Can Hurt You

Internet

It can be a little daunting to compare different web hosting companies. Here are some of the most important things to keep in mind when you select a provider, along with ways that the wrong service can be detrimental.

  • Getting Started with Your Search
  • Track Record
  • Equipment & Uptime
  • Backups
  • Cost
  • Customer Support
  • Connectivity
  • Why Poor Hosting Choices are Problematic
  • Conclusion

Getting Started with Your Search

Especially with the rise of CMS options such as WordPress and other site-building systems, creating your own site has become much more manageable for novices. One challenge for business owners, though, is figuring out which web hosting service is the right choice.

There are currently more than a billion websites online globally. Every one of those sites is hosted, whether through the company’s own data center or an outside provider.

Web hosts tend to sell their plans with a huge amount of attention toward price. Of course affordability is a critical factor, but there are other considerations as well. Here are some of the top strengths you want to see from a web host, as well as ways that the wrong hosting can hurt you.

Track Record

It’s important to understand how credible and established the company is, explains Zac Johnson of Tech.Co. “The best and most reliable hosting companies are ones that have their own data centers, a support team and also thousands of customers who can vouch for their service,” he says. For instance, in the case of Superb Internet, we have been in business since 1996 and have customers from more than 150 different countries worldwide.

Equipment & Uptime

It’s not enough for a company to have a staff offering strong support and technical acumen. The servers that are used to power your site are of course fundamental to the quality of hosting. Beyond the servers themselves, you want to make sure that the Web connection is reliable and that there are built-in redudancies so that you are unlikely to ever experience unscheduled downtime when your site is unavailable.

Backups

Another piece that you want to make sure is in place when you work with a web host is backup storage and disaster recovery. It may seem unnecessary to have all your site’s files backed up, but if you don’t, you could end up in a nightmare. At Superb, for instance, we back up all our clients’ sites every single day.

Cost

Cost is a critical aspect of web hosting, but you want to be certain you’ve explored the specifics of your particular solution. For instance, there is a vast difference between two different types of hosting that involve multi-tenancy, or different users leveraging the same hardware: shared and cloud. Research the specifics of your service’s plans as much as you can before proceeding.

Customer Support

You may think that you can typically figure out whatever you need from forums and that support is optional, but that is not the case with web hosting. You want a service that will respond to any requests you might have within 30 minutes. There should be extensive experience within the support department too. In 2014, for instance, Superb provided more than 34,000 replies to almost 18,000 support tickets.

Connectivity

This feature is crucial because you are accessing a system at a distance, as are all users visiting your site. “The best hosting providers will have full connectivity at the highest speeds, while also having backup servers and full connectivity at all times,” notes Johnson.

Software

You also want to know how committed your host is to keeping all software updated. If software is not kept up to date, you end up with gaps in security that can result in your site being hacked and injected with malware.

Why Poor Hosting Choices are Problematic

You want to look for hosting companies with the attributes listed above because a bad hosting service can do damage to your business, in the following ways:

  1. You’re put at risk for attack. You want to be certain that your hosting provider invests in strong security measures. For instance, when a company uses SSAE-16-audited data centers, you know stringent data safety measures are in place.
  2. It can hurt your Google standings. The worst hosting companies have frequent downtime, when your site isn’t available. Any performance issues such as downtime or slow loading will make it difficult for you to maintain search prominence. Search engines check on uptime data and will penalize you even if it’s really an issue with the hosting service.
  3. Users leave your site. On average, an Internet user is only willing to wait 6 seconds for any page to load before backing out and going elsewhere. Pages with more images and video take the longest to populate, notes Debra Carpenter of The Hosting News. “The very pages designed to funnel users toward making a purchase could be the barrier that stops them from buying if you’re using the wrong web hosting,” she says.

Conclusion

Are you in need of web hosting for your company? Make sure that you look for the above strengths so that your company doesn’t suffer the negative consequences of poor hosting.

10 Reasons for ISO 9001 Certification: Showboating vs. Integrity

Data Center

Why are we certified for ISO 9001:2008, and why might going through that process make sense for any organization?

ISO 9001 is a standard established by the International Organization for Standardization (with the confusing acronym ISO) – a body that creates voluntary technical guidelines for international business and technology, founded in 1947 in Geneva, Switzerland. The ISO 9001 standard is straightforwardly entitled “Quality Management Systems” (QMS).

Although people often think of the ISO standards as a way for tech companies to prove their credibility, they are helpful for any type of business, yours included. If you do decide you want to get certification for the standard, you would need to get audited by a registrar that would come out and physically check your systems and processes.

Here are 10 reasons to answer the question above: why it might be relevant for your organization and is especially important for choosing IT service providers.

  1. Ability to Meet Needs

First, let’s focus on some of the reasons that this standard is helpful for IT vendors. Sometimes a customer will say that they can only work with an organization that is certified for ISO 9001. The service provider goes out and gets audited – but they aren’t always philosophically invested.

“The problem with these companies [that get the certification for superficial reasons] is that they’re looking for a short-term payoff,” explains management coach Chris Anderson, MBA. “They don’t embrace the concept of quality through continual improvement. They don’t understand that continued customer satisfaction is the ultimate goal of a QMS.”

You want any company with which you work to be truly dedicated to quality management rather than just in it for demonstration purposes.

  1. Business Growth

Sure, ISO 9001 helps any company get business with organizations that list the standard as a baseline requirement – a legitimate reason for certification.

  1. Better Organization and Stronger Service Quality

Is this about showboating or integrity? Hopefully the latter. [O]f course, one result of adopting a QMS should be an improved level of quality for the entire organization — every process, and every product,” says Anderson (emphasis his). “A well-designed, effectively implemented ISO 9001 Quality Management System will put your company on the Road to Quality.”

  1. Customer Satisfaction

Everyone knows what happens when quality improves: you put genuine smiles on your customers’ faces. Why? The ISO 9001 QMS standard helps you better understand their expectations and strengthens your provision of services to meet those expectations.

  1. Identification of Your Processes

When you are certified for Quality Management Systems, you must analyze your processes via metrics for improved management. By measuring your goals and actual operations, you can better define how well you are truly aligned with your quality objectives.

  1. Clearer Responsibilities for Employees and Better Workplace Culture

ISO 9001 makes everything simpler for your workforce: better sense of goals and individual roles, descriptions of specific actions, and a quick sense of how they are doing via metrics. These guidelines limit confusion and imbue your entire organization with professionalism.

  1. Consistency to Better Predict Your Trajectory

These days, everyone is obsessed with predictive modeling and predictive analytics – using big data as the fuel to figure out what customers need, how the market might change, and how the business will grow. To understand your own organization and make sure your numbers are correct, consistency is the foundation.

Consistency is also critical so that your customers know that they are getting the same thing every time. According to Anderson, consistency is achieved through control. In turn, “[c]ontrol comes from having a clear target to shoot for (objective), collecting data on the process (metrics), and understanding how to adjust the process (procedures and work instructions) to maintain the target output,” he says. “If your ISO 9001 QMS is working, you should be increasing operational…and product…consistency.”

  1. Stronger Direction for Workforce

Implementing the tools described by ISO 9001 is generally positive to help everyone in your organization zero in on the correct path forward. However, a clear target often fades over time.

Recognizing the tendency of organizations to gradually shift away from newly adopted quality mechanisms, the ISO 9001 QMS standard includes regular auditing so that companies don’t stray too far from their objectives.

  1. An Attempt at Perfection to Minimize Waste

When I was a kid, I had a shirt that said, “If nobody’s perfect, then I must be a nobody.” It got a lot of laughs because the idea of individual perfection is preposterous – as is the idea of organizational perfection.

However, Anderson points out that you will get closer to perfection with the standard, in part by minimizing process waste.

“Waste results from poor quality and inefficiency,” he says. “Inefficiency results from variation and inconsistent processes.  Reduce variation, improve consistency, and you’ll have less waste…and more money.”

  1. Joining a Credible Worldwide Group

By getting certified for ISO 9001, you will be recognized as one of the almost 1 million companies globally that use this quality standard. You won’t just be credible in your own nation but anywhere on the planet.

Want ISO 9001:2008 Certified Hosting Systems?

In business since the 1990s, Superb Internet knows how to establish strong, consistent, high-quality infrastructure for your business. That’s especially important when considering the public cloud.  See our certifications & compliances.

By Kent Roberts

Relaxing HIPAA Compliance

 

HIPAA Compliant Hosting Keeping You Up At Night?
click image above to view video on YouTube

As if tech wasn’t already granular and heady enough, HIPAA oversight by the federal HHS Office of Civil Rights makes data protection even more challenging for healthcare companies.

HIPAA can be stressful, and it can also be costly. It’s headache-inducing because enforcement is on the rise, with more than $10 million of financial settlements listed on the OCR “Wall of Shame” in the 12 months leading up to June 2014.

Part of the reason it’s stressful is that it’s boring. Recognizing how exciting HIPAA rules are not, Keith Faigin of TechRepublic detailed 10 need-to-know elements of the law using examples from sci-fi films. Although Faigin’s article was penned in 2012, it remains largely relevant and incredibly palatable. To use another cinematic reference,  Mary Poppins was right when she claimed that “a spoonful of sugar makes the medicine go down.”

A major stress-reduing change for healthcare organizations came last year, by way of the HIPAA Omnibus Final Rule: now business associates must report to the government just as covered entities do. In other words, hosting providers, shredding companies, or any other firm handling healthcare data now truly shares compliance duties with its clients.

As indicated in the above video, a strong HIPAA compliance plan doesn’t just allow healthcare companies to relax: it also is cost-effective. Atlantic.Net meets the needs of our healthcare partners with affordable turnkey HIPAA solutions, based in our SSAE 16 Type II certified datacenter in Orlando, Florida.

By Kent Roberts

Earth to Cloud: AWS is Not “Winning” the Race to Zero

Race to Zero

Sometimes it seems that large tech news sites would rather discuss Amazon, Microsoft, and Google – profiting off the name recognition and staying on universally comprehensible ground – than make sense. A well-framed and assumedly well-intentioned article in Business Insider named some rather ridiculous front-runners in the as-a-service market’s “race to zero.”

Julie Bort explained the general scenario aptly on November 9: the cloud sector is so incredibly crowded that the prices keep getting lower and lower. Meanwhile, resource thresholds on typical plans continue to increase.

Actually the term race to zero has been around at least since December 2010, and it is a little more complicated than affordability. Joshua Geist of recovery-as-a-service (RaaS) firm Geminare coined the term and defined it as “the time when commodity pricing is driven so low that the only way to drive continued market value is by focusing on the value over and above the core commodity offering – the applications the commodity enables.” He elaborates that as this process occurs, gradually applications start to trump the supportive backend. That shift in turn leads to widespread acceleration within the industry (i.e. more businesses using the cloud and investing in it more substantially).

Why the Race to Zero?

Here are the two reasons Bort cites for that trend, which is ongoing in 2014:

  1. Looking at how technology is developing reveals a major reason why the prices keep getting sliced and diced. Storage is becoming less expensive all the time. Last year, a gigabyte of storage cost 4 cents, while it cost almost $10,000 in 1993 (although Bort’s source and details for that information are unclear).
  2. Amazon has successfully positioned itself as the Walmart of the distributed virtualization model. The company drops its prices regularly as the technology improves (or does it?). AWS claims it has cut prices almost 4 dozen times since 2008. Note: This should all sound like a bunch of baloney, but the perspective is not completely without merit.

The Argument for AWS as the Price-Dropping King

Bort says that Amazon is achieving its dominance by continuing to attract new business and bolstering its stable of solutions, which over time will (supposedly) become increasingly inexpensive.

She cleverly remarks that AWS is positioning its cloud plans in the same manner as its retail offerings. The strategy is essentially that a shopper will continue to throw additional items into their cart if each one is a great deal.

Meanwhile, Google and Microsoft (wow, those are unexpected names to hear) have stated that they will continue to offer pricing in the same ballpark as AWS and gradually expand their “as a service” catalog.

The result of this price war is that the consumer wins.

Clearly the race isn’t actually to zero, now is it? In some senses, yes, it is. Box CEO Aaron Levie recently commented in an interview that he believes one day, a scenario in which “storage is free and infinite” will arrive.

Hey Everybody! Lunch is Free!

As any economist will tell you, there is no such thing as a free lunch. Who pays? You do.

GeekWire reported in January  on the story of Moz, a hugely respected and widely used SEO tools company. The firm’s CEO, Sarah Bird, reported that the company had transitioned from an Amazon cloud  to one that is housed on-site.

Bird said that the processing power required by the company resulted in the expenditure of huge sums of money with AWS. The cloud giant became a consistent source of frustration: “It was killing our margins and adding to product instability.”

Bort’s analysis is completely correct in the sense that AWS is a leader in the marketplace. Because they have such vast infrastructure and such a populated clientele, their pricing strategy does have a major impact on the way that other companies in the space compete.

Let’s be honest, though: a large part of the reason that Amazon has succeeded is because cloud has been seen as confusing and undependable. Amazon, with its retail side, was already a trusted brand. However, they aren’t really an inexpensive option. We are.

Power Headed for Zero as Well

The Business Insider article was getting some traction after its release, and Alex Wilhelm of TechCrunch chimed in with some thoughts of his own. Wilhelm remarks that the first step in the race to zero occurred when Google took over the email industry by giving all users a free gigabyte of storage. Fast-forward to 2014, and we see Dropbox and Box providing free storage, without limitation, to all their business clients.

The biggest addition that Wilhelm makes to the discussion is that storage is not the only element involved. Instead, the race to zero goes beyond storage to processing power. It won’t just be about free storage but about using a free backend to run your business. Keep in mind that the infrastructure will be free, but the applications and platforms will not.

Wilhelm concludes his report with the simple sentence, “The race to zero is awesome.” The fact is, this industry is complex. Cisco isn’t taking part in the AWS race. Neither is Rackspace. Different providers have different business models.

If you want to talk price war, though, you have to recognize the true frontrunner. At Superb, no one beats our prices. We even have a Price Match Guarantee. Plus, a comment from our customer Alan Gustin demonstrates another strength: “Great job! Your tech team always responds fast. I appreciate that.”

By Kent Roberts