Danny Hook - Rockolo: Born on the cloud

Danny Hook - Rockolo: Born on the cloud

Wednesday, July 25, 2018 Posted by Joseph Streeter
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As jurisdictions around the world continue to legalise and regulate online gambling, we are seeing a raft of new operators and brands enter the market. In most cases, these are startup companies looking to capitalise on the high growth the sector is able to deliver to those that crack the code when it comes to product and marketing.

Indeed, the process of setting up an online casino and/or sportsbook is easier now than it ever has been. There many third-party technology and service partners that allow operators to get to market quickly and efficiently. One particular area where startups are taking advantage of state of the art technology is IT, and in particular the cloud.

In recent months we have seen an uptick in the number of online gambling operators that are “born on the cloud”. This means their entire IT infrastructure is based on the cloud from day one. There are several benefits of taking this approach, not least the cost savings incurred by not having to purchase a single piece of tin.

The cost savings go beyond investing in expensive hardware. We estimate that traditional IT systems require a team of at least four full-time technical staff to manage and maintain. At an average salary cost per technician of around £60,000 per year, born on the cloud operators can save upwards of £250,000 on staffing costs alone.

At Rockolo, for example, our cloud system is managed by a team of highly skilled engineers, but the cost is shared equally by all of our clients. In short, it means they are getting a more reliable and powerful service, and at a fraction of the cost of doing it themselves. All told, operators using the cloud for IT can do so at 25% of the cost of traditional systems.

The benefits don’t stop there. Startup brands that have taken the market by storm have done so because they are agile and can react to ever-changing market forces. One of the key upsides to the cloud is that bandwidth (as well as infrastructure) usage can be scaled up and down in real-time and in line with demand. Operators only pay for what they use.

For example, sportsbook operators will see a spike in betting activity during the World Cup, but once the tournament finishes it will return to “normal” levels. For established operators with legacy tech, they have two choices: either invest in additional hardware and carry the cost for the rest of the year, or accept their players will receive a reduced service.

The former hurts bottom line, but the latter risks seeing players go to rival brands if they can’t deposit, place bets or withdraw.

For startup operators born on the cloud, this is simply not a concern. This is because cloud technologies are very much a utility. In the same way that businesses pay for gas and electricity on a usage basis, the cloud allows them to do exactly the same for their IT requirements and needs.

New operators understand the benefit of being born on the cloud, but established organisations have been a little slower to see that it is very much the future of IT. In this regard, they are like the factories of old that used to generate their own power via water mills and generators, while their born on the cloud competitors consider IT a utility service.

Things are slowly changing, with some established names operating 100% on the cloud. But they are in the minority, and the industry titans risk falling further behind the curve if they don’t act fast and migrate their IT infrastructures to the cloud. They have already had market share taken away from their by their younger more agile rivals, and that will only continue.

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