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1 INSERT COMPANY LOGO HERE North American SSL Cloud Certificate Services Competitive Strategy Product Innovation Leadership & Award Leadership Award

2 Contents Letter of Congratulations... 3 Background and Company Performance... 4 Industry Challenges... 4 Customer Value Excellence and Strategy Innovation of Internap... 5 Conclusion... 9 Significance of Competitive Strategy Innovation and Leadership... 9 Understanding Competitive Strategy Frost & Sullivan s Global Research Platform Key Benchmarking Criteria The Intersection between 360-Degree Research and Best Practices Awards Research Methodology Decision Support Scorecard and Matrix Best Practice Award Analysis for Internap Decision Support Scorecard: Customer Value Excellence Decision Support Scorecard: Strategy Innovation Decision Support Matrix Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices Impact of Competitive Strategy Innovation and Leadership Award on Key Stakeholders About Frost & Sullivan Disclaimer

3 Letter of Congratulations Dear Ms. Mehra, We are proud to present you with this year s Award for best practices in Competitive Strategy Innovation and Leadership in the cloud services market. You may be wondering how we chose you. The answer is that we sent out a team of Frost & Sullivan analysts and industry experts on a global hunt for companies achieving dual excellence in two critical areas: Customer Value and Strategy Innovation. Put another way, we were searching for companies that not only had a vision for a high-quality total customer experience, but used those insights to carve out a creative and sustainable growth strategy. We asked our global network of consultants and analysts to monitor, screen, and analyze creative practices within their regions. We spoke to industry peers. We vetted our findings with an independent Board of Directors. At the end of our process, one company stood out from the rest, and that company was yours. (For more on our methodology, please see page 11.) To achieve excellence in Competitive Strategy Innovation and Leadership is never an easy task, but it is one made even more difficult due to today s competitive intensity, customer volatility, and economic uncertainty not to mention the difficulty of innovating in an environment of escalating challenges to intellectual property. Within this context, your receipt of this Award signifies an even greater accomplishment. Moreover, we recognize that your receipt of this Award is the result of many individuals (employees, customers, and investors) making daily choices to believe in the organization and contribute in a meaningful way to its future. We believe that such an achievement should be acknowledged and celebrated. We are therefore proud to bestow this Award upon Internap, and we hope you use this Award as a platform for strengthening your brand, building awareness among new and existing customers, and inspiring your team to even greater levels of performance. Once again, we congratulate you on your achievements and wish you great success in the future. We are here to support you on any future endeavors. Sincerely yours, David Frigstad Chairman Frost & Sullivan 3

4 Background and Company Performance Industry Challenges The cloud has dominated IT conversations for nearly a decade. The cloud a model for creating, delivering, and consuming IT resources promises the high levels of IT efficiency, flexibility, scalability, and cost-effectiveness that businesses need to survive in a technology-fueled economy. By subscribing to cloud Infrastructure as a Service (IaaS), enterprises avoid the capital and operating costs associated with infrastructure deployment and instead consume and pay for just the capacity they need, on demand. In turn, service providers including hardware and software vendors, hosting, network, and managed service providers have rushed to build cloud centers and add IaaS services to their portfolios. And yet, Frost & Sullivan notes that the adoption of IaaS has lagged behind the hype. According to the 2013 Frost & Sullivan Cloud User Survey of U.S.-based IT decisionmakers, just 14 percent of enterprises are utilizing public cloud infrastructure services. Even among IaaS users, few enterprises have fully embraced the cloud model, largely limiting usage to a handful of non-critical applications. There are several reasons enterprises continue to be squeamish about entrusting their critical and high-performance workloads to a hosted cloud environment. Security and compliance are of concern: 82 percent of survey respondents cite concerns about unauthorized access to my data as a key reason for choosing not to place certain workloads in the cloud, and 77 percent cite inability to meet compliance requirements. 73 percent of respondents cite concerns over poor or inconsistent application performance for their decision to limit their cloud usage. Many providers have responded to enterprise concerns by offering private (singletenant) clouds for sensitive workloads. With dedicated servers and network infrastructure, these services address some security and compliance concerns. However, for highperformance workloads, issues regarding application performance remain, thanks to the standard practice of configuring cloud centers using virtualized server infrastructure. Virtualization separates the logical from the physical components of an application. Application code and associated operating system are packaged neatly into a virtual machine (VM). Multiple VMs, regardless of operating system, can share a physical server; a hypervisor installed on the server allocates resources and acts as a translator, making each VM believe it has full access to the server resources. By optimizing hardware utilization, virtualization allows the cloud service provider to manage its cloud infrastructure efficiently, easily and cost-effectively. However, the benefits of virtualization do not automatically accrue to the customer. In fact, virtualization benefits the cloud service provider at a cost to the user. For some workloads, virtualization can offer infrastructure efficiency for the cloud service provider at the cost of diminished performance for the customer. Primary sources of concern about virtualized cloud infrastructure are noisy neighbor syndrome and the hypervisor tax. 4

5 Noisy Neighbor With multiple different applications contending for the same processor and memory resources, virtualization inevitably brings the risk that the computing resource will not be available at the capacity level and at the instant it is needed. This can introduce sporadic delays that are intolerable for certain workloads. Hypervisor Tax - Even if there are no strangers sharing the facility for example, in a dedicated or private cloud environment virtualization extracts a toll on available capacity. The hypervisor tax is the amount of processing capacity that is consumed by the hypervisor layer. While virtualization providers have enhanced their hypervisor software to be as thin as possible, a hypervisor can still consume as much as 10 percent of the available capacity of a server. For high-performance workloads that require large amounts of capacity, the tax can be significant, even impacting performance of the application. Thus, enterprises are often faced with trade-offs in running their high-capacity or highperformance workloads in the cloud; that is, trade optimal performance for the efficiency and low cost structure of the virtualized cloud, or trade efficiency and low cost for high performance in a dedicated hosting environment. There is another option: the bare metal cloud. A handful of cloud service providers have introduced this alternate type of cloud, which offers enterprises a low-cost, scalable, easily managed hosting option without virtualization. However, the few providers that include bare metal in their cloud portfolios face a steep challenge in educating the market. In most of the industry, the concept of virtualization is deeply entwined with cloud. In addition, low-priced public cloud offers with unpredictable performance dominate the industry. However, as enterprises increase their reliance on data analytics and other performancesensitive computing workloads, the market opportunity for bare metal cloud will also grow. Cloud service providers that aggressively market a bare metal option as part of their cloud portfolios will be poised to grab and hold a significant share of the market. Customer Value Excellence and Strategy Innovation of Internap Total Customer Experience In an increasingly crowded IaaS market, Frost & Sullivan independent analysis confirms that Internap has clearly succeeded in differentiating itself via its bare metal cloud offer. The infrastructure services provider offers a full range of colocation, hosting and cloud services on a common platform, thus enabling hybridization across services; that is, its customers centrally manage workloads across service types and scale on-demand capacity via its single pane of glass customer portal. In addition, Internap optimizes cloud delivery through its high-performance IP transit and content delivery network services. Internap s market approach is to take the complexity out of the cloud decision by making it easy for customers to select the right deployment model for each workload. The company s technical staff will help customers design the optimal configuration for each 5

6 workload, depending on the inherent characteristics of the workload itself, as well as security and compliance needs, performance requirements, and price. The company s high-touch customer service ensures that customers are able to maximize the value they receive from their Internap cloud solution. As one of few cloud providers to offer a bare metal option, Internap is better equipped than its competitors to effectively handle high-performance and high-capacity workloads. As such, the company s bare metal offer has attracted interest from enterprises for their big data and analytics workloads, as well as Software as a Service (SaaS) providers whose services require consistent performance levels that back up their SaaS service level agreements. In addition, the company has been successful in attracting new to cloud businesses or workloads to its bare metal offer, and then growing the relationship when the customers consolidate other workloads (from competitors or their own data centers) on Internap s infrastructure platform. Like most cloud providers, Internap s competitors are all seeking a way to drive greater cloud adoption and confidence, and to differentiate themselves from the pack. While all have had some successes in different areas, Internap s broad portfolio and focus on performance and service has enabled it to deliver a superior customer experience. Product/Service Value The concept of the bare metal cloud is new to most enterprises. As part of its education effort, Internap has accepted the burden of not only showing overall business value of its bare metal cloud, but also providing detailed comparisons with the virtualized cloud offers of the leading cloud service providers. As accurately positioned by Internap, the Bare Metal Cloud is neither the only cloud solution an enterprise may need, nor is it the right solution for many workloads. However, for latency-sensitive or high-performance workloads, the Bare Metal Cloud has proven superior to virtualized cloud offers. To emphasize that point, Internap has conducted tests, via a third-party, that measure performance of different types of workloads in the Internap Bare Metal cloud and the virtualized clouds of two leading cloud service providers. Included among the compelling test results cited by Internap are: bare metal cloud servers performed eight times better than virtualized competitive services for general workloads; three times faster for MySQL workloads; and six times faster for file system performance. As an additional tool for price-conscious prospective customers, Internap provides a detailed comparison of per-unit costs of its Bare Metal Cloud compared with its competitors. The calculations show that its bare metal servers can be as much as 48 percent more cost-efficient than virtualized servers, since fewer instances are needed for equivalent processing power. The comparison tool is easy for prospective users to replicate with their own needs and current provider; it thus is a valuable tool for those charged with developing a business case. 6

7 Service Experience Frost & Sullivan appreciates the fact that Internap backs its services with some of the industry s highest levels of customer support. In the automated, self-service cloud market, most providers expect their customers (especially those of smaller size) to navigate on their own through online tools. This keeps provider costs low, enabling them to serve more customers with low-priced cloud services. However, Frost & Sullivan Stratecast research repeatedly shows that businesses of all sizes believe they do not have the knowledge on staff to develop and effectively execute a cloud strategy on their own. In fact, 73 percent of IT decision-makers surveyed by Frost & Sullivan Stratecast say they will turn to an outside provider for assistance in developing and implementing their cloud strategy. Internap offers its customers the assistance they need, as a standard component of its service. At the start of an engagement, Internap technicians provide a customized cloud design to help customers determine which option works best for their workloads. As part of its base managed support, the company gives its cloud and hosting customers access to live technicians, 24x7, via phone, or chat, at no fee, for issues and questions related to the health of the service. For those seeking expert consultation about their application performance or service configuration, additional Tier 2+ support is available for a fee. To ensure Internap continues to meet customer needs, the company continually measures customer satisfaction ratings, and, unlike its competitors, publishes those results on its Web site. The company cites a 2013 benchmarking survey by the Technology Services Industry Association which found Internap s average score for assisted customer support (via , chat, and phone) to be 10 percent higher than that of competitors. Navigational Positioning Internap is a long-time infrastructure services provider that claims to offer the world s best-performing infrastructure. The company has made several strategic acquisitions in the past few years, including the acquisition of cloud provider Voxel in 2011 that brought the bare metal cloud. Though Internap offers the full range of hosting and cloud services, it positions its bare metal cloud as its lead cloud offer. The company reports that its bare metal offer attracts companies in tech industries, such as Software as a Service providers. It also attracts performance-sensitive workloads, such as big data. The strategy has been effective in capturing new customer workloads: the company reports a large percentage of its cloud customers begin their relationship with the bare metal offer, later moving additional workloads to other Internap colocation, hosting and cloud services. Internap has embraced the role of market educator and evangelist for bare metal cloud a challenging task. The widespread misperception that cloud equals virtualization was supported by a recent Internap survey, in which 66 percent of Internet infrastructure 7

8 decision-makers cited virtualization as a defining characteristic of public cloud. Nonetheless, fully 63 percent say they would be interested in a bare metal cloud, according to the Internap survey. To educate the market, Internap has embarked on an aggressive market messaging campaign in which it takes on its better-known cloud rivals in a head-to-head comparison of price-performance for bare metal and virtualized servers. Internap publishes a calculation showing that its bare metal servers can be as much as 48 percent more costefficient than virtualized servers of its leading rivals, since fewer instances are needed for equivalent processing power. For IT decision-makers charged with developing a business case, the calculation is an effective marketing tool that shows how they can compare price-performance of various vendors options. Internap s competitors have shied away from direct price or performance comparisons between bare metal and virtualized cloud services; those that offer bare metal position it as one more area of customer choice. This approach will likely be less effective in capturing the mindshare of cloud-averse businesses who are unaware of the value of bare metal cloud for certain workloads. Execution Excellence Internap emphasizes performance advantages for its bare metal cloud servers, citing third-party-conducted tests comparing Internap s bare metal cloud to the public cloud services of its leading cloud rivals. Included among the test results cited by Internap are: bare metal cloud servers performed eight times better than virtualized competitive services for general workloads; three times faster for MySQL workloads; and six times faster for file system performance. While competitors make marketing claims about their performance, they do not offer direct, granular, and potentially reproducible evidence for their claims. By publishing the test results, Internap showcases the strength of the bare metal model as well as its own services. Technological Sophistication Internap s solutions are supported by a robust infrastructure technology platform the company calls its Performance Platform. The single platform enables the management and hybridization of Internap s colocation, hosting and cloud services: traditional and cloud, single-tenant and multi-tenant, virtualized and bare metal. In addition, end-to-end performance of Web-based applications is supported by Internap s route-optimized IP transit and content delivery network (CDN) services. The company s patented Managed Internet Route Optimizer tm technology delivers user traffic over the best available path at any given time across major Internet backbones, for maximum speed and reliability. 8

9 In the fluid and volatile cloud market, which continues to be characterized by mergers and acquisitions, many of Internap s competitors are struggling to deploy the right platform one that is broad, robust, flexible, scalable, and simple enough to optimally support divergent customer and workload needs. In 2013, several leading providers acquired or built entirely new cloud platforms. This can cause disruption and uncertainty among customers. Conclusion In the evolving and fluid cloud market, there is no one-size-fits-all solution. Each workload comes with different price-performance requirements; each enterprise requires different levels of support. In this environment, the successful infrastructure services provider will be the one that offers the broadest range of interoperable deployment options on a single, flexible platform, with high levels of service and support. Frost & Sullivan firmly believes that Internap, the infrastructure services provider, truly delivers on all fronts. The company s bare metal cloud offer is a strong complement to its range of colocation, hosting and cloud services. Coupled with the company s highperformance IP network, Internap s cloud services deliver proven levels of throughput and performance even for workloads not previously considered good candidates for cloud. As such, Internap s strategy has been effective at attracting new workloads and cloudskeptical businesses, thus helping not only to grow the company but to expand the cloud market. For these reasons, Frost & Sullivan bestows the 2014 Competitive Strategy Innovation & Leadership Award to Internap. 9

10 Significance of Competitive Strategy Innovation & Leadership Any successful approach to achieving top-line growth must (1) take into account what your competitors are, and are not, doing; (2) meet customer demand with a comprehensive, value-driven product or service portfolio; and (3) establish a brand that resonates deeply with customers and stands apart from other providers. Companies must succeed at these three things brand, demand, and positioning to achieve best-practice levels in Competitive Strategy Innovation and Leadership. This concept is explored further below. 10

11 Understanding Competitive Strategy As discussed on the previous page, branding, positioning, and meeting customer demand all play a critical role in a successful competitive strategy. This three-fold focus, however, is only the beginning of the journey and must be complemented by an equally rigorous focus on innovation and leadership. Best-practice companies therefore look outward and inward at the same time: outward to identify market opportunities, and inward to build the vision and capabilities needed to take advantage of those opportunities. This inward-outward duality enables companies to succeed in the eat-or-be-eaten world of competitive markets. Identification of opportunities and then the ability to act on those opportunities separates the predators from the prey. This dynamic is illustrated below. Frost & Sullivan s Global Research Platform Frost & Sullivan maintains more than 50 years in business and is a global research organization of 1,800 analysts and consultants who monitor more than 300 industries and 250,000 companies. The Company s research philosophy originates with the CEO s 360 Degree Perspective, a holistic research methodology that encourages us to consider growth challenges, and the solutions companies employ to solve them, from every angle. This unique approach enables us to determine how best-in-class companies worldwide manage growth, innovation and leadership. Based on the results of our research in entrepreneurial excellence, Frost & Sullivan is proud to present the 2014 North American Competitive Strategy Innovation and Leadership Award in Cloud Services to Internap. Key Benchmarking Criteria For the Competitive Strategy Innovation and Leadership Award, we evaluated the total client experience and strategy implementation excellence according to the criteria detailed below. Customer Value Excellence Criterion 1: Total Customer Experience Criterion 2: Product/Service Value Criterion 3: Purchase Experience Criterion 4: Ownership Experience Criterion 5: Service Experience Strategy Innovation Criterion 1: Navigational Positioning Criterion 2: Execution Excellence Criterion 3: Technological Sophistication Criterion 4: Executive Team Alignment Criterion 5: Stakeholder Integration 11

12 The Intersection between 360-Degree Research and Best Practices Awards Research Methodology Frost & Sullivan s 360-degree research methodology represents the analytical rigor of our research process. It offers a 360-degree-view of industry challenges, trends, and issues by integrating all 7 of Frost & Sullivan's research methodologies. Too often, companies make important growth decisions based on a narrow understanding of their environment, leading to errors of both omission and commission. Successful growth strategies are founded on a thorough understanding of market, technical, economic, financial, customer, best practices, and demographic analyses. The integration of these research disciplines into the 360-degree research methodology provides an evaluation platform for benchmarking industry players and for identifying those performing at best-in-class levels. 360-DEGREE RESEARCH: SEEING ORDER IN THE CHAOS Decision Support Scorecard and Matrix To support its evaluation of best practices across multiple business performance categories, Frost & Sullivan employs a customized Decision Support Scorecard and Matrix. This analytical tool compares companies performance relative to each other. It features criteria unique to each Award category and ranks importance by assigning weights to each criterion. The relative weighting reflects current market conditions and illustrates the associated importance of each criterion according to Frost & Sullivan. This tool allows our research and consulting teams to objectively analyze performance, according to each criterion, and to assign ratings on that basis. The tool follows a 10-point scale that allows for nuances in performance evaluation; ratings guidelines are illustrated below. 12

13 Total Customer Experience Product/Service Value Purchase Experience Ownership Experience Service Experience Weighted Rating BEST PRACTICES RESEARCH Best Practice Award Analysis for Internap Decision Support Scorecard: Customer Value Excellence The Decision Support Scorecard, shown below, illustrates the relative importance of each criterion and the ratings for each company under evaluation for the Competitive Strategy Innovation and Leadership Award. The research team confirms the veracity of the model by ensuring that small changes to the ratings for a specific criterion do not lead to a significant change in the overall relative rankings of the companies. Finally, to remain unbiased and to protect the interests of all organizations reviewed, we have chosen to refer to the other key players in as Company 2 and Company 3. DECISION SUPPORT SCORECARD FOR COMPETITIVE STRATEGY INNOVATION AND LEADERSHIP AWARD (ILLUSTRATIVE): CUSTOMER VALUE EXCELLENCE Measurement of 1 10 (1 = poor; 10 = excellent) Award Criteria Customer Value Excellence Relative Weight (%) 20% 20% 20% 20% 20% 100% Internap Company Company Criterion 1: Total Customer Experience Requirement: Customers receive exceptional impression at every stage of the purchase cycle Criterion 2: Product/Service Value Requirement: Products or services offer the best value for the price, compared to similar offerings in the market Criterion 3: Purchase Experience Requirement: It is as simple for salespeople to sell the product or service as it is for the customer to buy the product or service Criterion 4: Ownership Experience Requirement: Customers are proud to own and use the company s product or service Criterion 5: Service Experience Requirement: Customer service is accessible, fast, and stress-free 13

14 Navigational Positioning Execution Excellence Technological Sophistication Executive Team Alignment Stakeholder Integration Weighted Rating BEST PRACTICES RESEARCH Decision Support Scorecard: Strategy Innovation DECISION SUPPORT SCORECARD FOR COMPETITIVE STRATEGY INNOVATION AND LEADERSHIP AWARD (ILLUSTRATIVE): STRATEGY INNOVATION Measurement of 1 10 (1 = poor; 10 = excellent) Award Criteria Strategy Innovation Relative Weight (%) 20% 20% 20% 20% 20% 100% Internap Company Company Criterion 1: Navigational Positioning Requirement: The ability to accurately describe the current location, as well as where the company wants to be in the future. Criterion 2: Execution Excellence Requirement: Processes support the efficient and consistent implementation of tactics designed to implement the strategy Criterion 3: Technological Sophistication Requirement: Systems enable companywide transparency, communication, and efficiency Criterion 4: Executive Team Alignment Requirement: The executive team is aligned on the organization s mission and vision Criterion 5: Stakeholder Integration Requirement: Strategy reflects the needs or circumstances of all industry stakeholders, including competitors, customers, investors, and employees 14

15 Decision Support Matrix Once all companies have been evaluated according to the Decision Support Scorecard, analysts can then position the candidates on the matrix shown below, enabling them to visualize which companies are truly breakthrough and which are not yet operating at bestin-class levels. 15

16 About Frost & Sullivan Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best in class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages over 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 31 offices on six continents. To join our Growth Partnership, please visit Disclaimer Quantitative market information is based primarily on interviews and therefore is subject to fluctuation. Frost & Sullivan is not responsible for incorrect information supplied to us by manufacturers or users. Our research services are limited publications containing valuable market information provided to a select group of customers. Our customers acknowledge, when ordering, subscribing or downloading, that Frost & Sullivan research services are for customers internal use and not for general publication or disclosure to third parties. No part of this research service may be given, lent, resold, or disclosed to noncustomers without written permission. Furthermore, no part may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the permission of the publisher. For information regarding permission, write to: Best Practices Recognition Group Frost & Sullivan 7550 IH 10 West, Suite 400 San Antonio, TX USA 16