When you're a fast-growing company with highly aggressive sales targets, the ability to scale your business and your product offerings at speed is everything.
That's why the founders of Xero, a New Zealand-based cloud accounting software, decided to launch the company in the cloud from the start. It's also the reason that the vast majority of the applications the company uses internally to run its business — Microsoft 365 to Atlassian's Jira and Confluence for project tracking and collaboration, and Google — are also in the cloud.
As Oliver Furniss, product manager at Xero, explained, the cloud is essential to Xero's highly distributed business; the company has development offices in Melbourne, Canberra, San Francisco, New York, Wellington, and Auckland. It also has sales and support offices in Sydney, Brisbane, Perth, and Melbourne, and is growing in the US and the UK.
Despite being a competitor to everyone from MYOB and Quicken in Australia to Inuit in the US and Sage in the UK, Xero is also growing exponentially, and has been given very aggressive sales targets; the company is currently adding around 200 customers each day as it strives for an 80 percent growth in revenues this year. It currently has around 75,000 small business customers in Australia and 200,000 globally, and is ultimately aiming for a far larger target of 1 million customers.
"It is scalability, scalability, scalability," Furniss said of the biggest challenge and need that Xero has. "If we look at the US, we have some really big targets for that market. Given the timescale ... we need help to scale up. Without it, we would be constrained in how we grow, and we don't want that."
Furniss said that with the growth Xero has experienced, a traditional IT installation with on-site servers, storage, networking, and software would just be a hindrance. At the same time, as a software company, Xero still needed its IT infrastructure to be accessible and easy to upgrade in the face of demands for greater capacity and speed, as well as to offer the highest uptime possible.
"With that rapid growth we have had is the need to quickly scale and change that scale really fast," he said. "Resilience is certainly also a challenge. This is our business, and our business is in the cloud, so uptime and performance is just fundamental to everything that we do."
The answer was to host its cloud infrastructure with Rackspace in the US and use Akamai to help deliver Xero's software around the globe.
Furniss said that when Xero decided to source a hosting provider for its cloud, there was no need to canvass the market. That's because Xero had decided on Rackspace from the beginning.
"From the early days, the founders knew that to create a seamless 24-hour network with the levels of speed and uptime needed to be the number one priority," he said. "Without that, the business doesn't exist. If you have a hardware failure and you can't get to that quickly, then the business fails."
Furniss said the decision to choose Rackspace came down to the vendor's reputation as a B2B services provider.
"Their reputation for uptime and support is known in the industry as probably the best," he said. "It's something we didn't want to skimp on, and was a priority from the start."
However, with its rapid growth, Xero began encountering scalability limits with its existing storage area network (SAN) and needed to upgrade. With the upgrade, the opportunity to also upgrade Xero's database software made sense.
Since early 2012, Xero has relied on about 50 Dell PowerEdge R710 and R810 servers running Windows Server 2008 R2, and a couple of SQL Server clusters all hosted in Rackspace's Dallas and Chicago datacentres.
Through upgrading to SQL Server 2012 and hosting with Rackspace, Furniss said Xero was able to access some of the latest features in SQL Server that support higher availability and scalability and also help improve resilience and response.
Accessing SQL Server 2012's AlwaysOn feature, Xero can treat a group of databases as a single entity — an "Availability Group" — and failover a group of databases as a single unit. By using AlwaysOn, Xero can set up an active or passive configuration for its databases, which allows for greater availability and easier testing of new features.
As at early 2012, Xero's main production database contained roughly 5 terabytes of data and served nearly 80,000 customers. As at October 2012, the company had two production workloads running on SQL Server 2012.
Uptime and support
In addition to gaining access to new capabilities and easier upgrades, Furniss said that the major benefit of using Rackspace is the additional uptime and control over its downtime that the provider gives Xero. The company currently sits at about 99.97 percent uptime in order to allow planned downtime for maintenance, new software, and upgrade releases.
"The benefit of the cloud is that we can schedule those planned releases and maintenance windows so it doesn't impact business customers," Furniss said. "We can release often and constantly if and when we want to release an upgrade."
Using Rackspace to host its cloud infrastructure has also meant that Xero has avoided having to source and pay for its own in-house hardware team and multiple hardware deployments across the globe.
"Having the support on the ground gives us the confidence that we are in the hands of the best people. If we tried to do it ourselves, we would just end up with big teams on the ground and multiple instances around the world.
"It is why we chose Racksapce as our technology partner — because of the challenge of scaling. It allows us to have a much smaller operations team, and they can focus more on the high-end work and less on the grunt work ... we don't need a 24/7 ops team.
"We can really just focus on how we solve problems for our business and our customers, rather than just solve all the internal problems.
"Having Rackspace gives us the confidence that we can grow. We don't ignore our hardware, but it is a great risk management piece to have Rackspace in our corner."
Local hosting flexibility
Furniss said that Xero currently has no plans to host a local instance of its services within Australia. However, with Rackspace's launch of Australian datacentres in February this year, local hosting is now an option should the Australian government or customers demand it of Xero.
"If there is ever an issue that we need certain information within the borders of Australia for Australian customers, then that is something we will do," Furniss explained. "The market so far hasn't shown that hosting in the US is a problem.
"If it ever does become an issue, with Rackspace in Australia, we can just maintain that relationship with them and look to bring some of that information across to Australia."
The company has also benefited from the service levels Rackspace offers. As Furniss explained, Xero has been able to apply to New Zealand's Inland Revenue Department (IRD) for an exemption to current laws that require tax data to be held within the country's borders.
"In New Zealand, we have been given authorisation from the IRD to host information in the US," he said. "Because of our security, our service levels and everything we do, we have an exemption to that. Rackspace is essential to that. We can prove that our data is secure and no one else can access that."