Testing the Cloud: SOASTA CEO Tom Lounibos (Part 7)

Sramana: Your pricing model is good because it is adaptable to companies of all sizes. Is it safe to assume that a company starting up with the expectation of ramping to 2 million users in a short time will be able to afford to access your service?

Tom Lounibos: Absolutely. I think Amazon’s number one startup last year was a seven-person company called M-Dot Networks. They are one of our customers. They are a really neat company that was recently sold. They offer digital coupons for grocery stores. Their customers were companies like Kroger and Safeway. They did a million-user concurrent test, and they use the result of that test on every sales call they make. They did that million-user concurrent test with SOASTA.

Sramana: At one level it almost seems like you are a value-added reseller of cloud computing infrastructure service vendors like Amazon. That is not cool or sexy, and I know that is not what you want to hear, but the example you just gave shows the strength you have in that model.

Tom Lounibos: I don’t think that is what we are. All of our servers come from Amazon, IBM, and Microsoft. We are there partner. Most people would say that we are a platform as a service because we deliver an application. That application is testing as a service for the community that leverages the infrastructure underneath it. The application to build the test, analyze the results, and automatically deploy it is a sophisticated piece of technology. Road Runner, Silk and all the others defined that sophistication previously.

Sramana: When you leverage the existing cloud infrastructure, does it impact your gross margins adversely?

Tom Lounibos: Amazon has 10-cent, 40-cent and 60-cent servers. We use their 40-cent servers. We get a discount on that rate because we use so much of their resources. In general, that is the cost range we use. Our business model has considered those costs, so there is not an adverse affect on our gross margin.

Sramana: What is your per server pricing?

Tom Lounibos: It ranges. If someone buys in bulk, it can be $5 per server hour. We deal with that as needed on a case-by-case basis. The most important consideration is our ability to scale and meet the needs and demands of our clients.

Sramana: Thank you for sharing your story with us. I look forward to following your continued success.

This segment is part 7 in the series : Testing the Cloud: SOASTA CEO Tom Lounibos
1 2 3 4 5 6 7