Federation Capacity Pricing


This document applies to sellers. Otherwise refer to the Buyers or Users sections of this guide.




The OnApp Federation enables you to sell your compute cloud infrastructure on an open and totally transparent global marketplace. Through the marketplace, service providers all over the world can buy your infrastructure on a pay-for-usage basis, and use it to host apps and content for their clients.

It's a new way to sell infrastructure, and for many service providers it can be tricky to price the infrastructure you sell through the OnApp Federation. This section helps you work out the optimal price for the compute zones you publish.


Traditional Pricing Model



The OnApp Federation is, in many ways, similar to infrastructure reselling you're used to:

Breakdown of traditional hosting pricing, per customer:

  • Cost of Hardware
  • Cost of Infrastructure (DC, bandwidth, etc.)
  • Cost of Logistics (HR, offices, etc.)
  • Cost of Support
  • Cost Per Acquisition (CPA: sales & marketing)

These points constitute the Total Cost A.

Direct Price = Total cost A x Profit %



OnApp Federation Pricing



Pricing the zones you publish to the OnApp Federation is quite straightforward. However, when you sell on the OnApp Federation, there are three key differences that you need to take into consideration:


Don't include CPAs or support



Your Federation zone pricing should not include sales and marketing costs (CPAs) or support costs, because the OnApp Federation takes care of that for you.


Transparency



Transparent performance and uptime data is the keystone of the OnApp Federation. We benchmark and monitor uptime for every zone published, and provide this alongside price and location data, so that buyers can make an informed decision about the infrastructure they will use.

Therefore, infrastructure with a high cost per hour will compare unfavorably with lower-priced infrastructure, unless there is a clear benefit to the buyer. That benefit can come in many forms: an unusual location, exceptional bandwidth, uptime or compute power, outstanding storage throughput and (in the future) other metrics like privacy, DC certifications and carbon neutrality.


Favor long game



You should also consider reducing the margin you usually work towards for your Federation zones. In a transparent, on-demand marketplace, there is more benefit to have large numbers of buyers use your infrastructure in the long term, by offering them additional margin, than there is in trying to maintain the margins you work towards for direct clients.


How to price for OnApp Federation



Taking that into consideration, your Federation pricing calculation should look like this:

  • Cost of Hardware
  • Cost of Infrastructure (DC, bandwidth, etc.)
  • Cost of Logistics (reduced, as it does not cover support and CPA related activities)

These points constitute the Total Cost B.

Federation Price = Total cost B x Profit % (possibly lower than normal)

For information on how to add a zone to OnApp Federation, refer to the Add Zones to Federation section.

If you get stuck, please visit the OnApp support portal. Before doing so, please, take a look at our FAQs, you may find the answer to your query there.