When mainstream media covers cloud startups


blog Hilarious video above of a segment broadcast recently on Channel 10 news about Australian cloud computing startup OrionVM. Channel 10 rolls out all the stereotypes possible for the team — comparing them to Steve Jobs, discussing the copious amounts of energy drinks they imbibe to keep their hacking skills alive, and even displaying repeated screenshots of what appears to be an Ubuntu terminal prompt. It’s mysterious code! Elite hacking going on here!

In all seriousness, while it’s great that OrionVM is getting coverage like this, we’d find it hard to believe this level of hype isn’t fairly unjustified. I’m sure the company is doing well, but is it worth “millions”? Possible, but not likely. Is it realistic to build a giant cloud computing infrastructure company off a base of just $6,000? Not really. Can the company’s product be conquering the world after it only launched in mid-2011? Nope.

The thing about cloud computing companies like OrionVM is that they’re not fast-moving consumer-facing startups like Spreets or RedBubble. They’re fundamentally business to business companies. And even in today’s hyped cloud computing environment, what this means is long sales cycles. Revenue in cloud computing land (especially in infrastructure as a service) is going to be slow to come by, and I would bet OrionVM has a long path to profitability. I didn’t see any sales guys in the videos of their office — just geeks typing at keyboards.

The other thing is that the company is currently going up against almost every major IT infrastructure company in the book. Amazon, Rackspace, Microsoft, HP, IBM, Fujitsu, CSC and more … to say nothing of fellow Australian startups like Ninefold, which is backed by Macquarie Telecom. Is there something special about OrionVM which will allow it to beat a global company like Amazon, or a local company like Fujitsu, at the cloud computing game? No. I do not believe there is. And even Ninefold is going to have the backing, customer contacts and deep pockets of a major player like Macquarie Telecom to draw upon

I like OrionVM and the guys that work there, and I’m cheering for them. I’ve covered the company before. But I really dislike hype, and I’d like to see some more evidence that these guys are world-beaters before I sign on to the level which Channel 10 appears to have done. And in IT circles, that means disclosing happy customers with successful and ongoing technology deployments. Nothing more, and nothing less.


  1. yeah, great to see that after +15 years of the Internet becoming mainstream the Australian media still refuses to grow up and comes up with these retarded tech stories.

  2. Whilst I would say it was overly “mainstreamed”, nothing that was claimed in that interview was false.
    To be fair this was designed to be aired to a wide audience barely able to comprehend “cloud computing”. We gave many different definitions – they edited out all but the least technical version.

    We did indeed start this business on $6k out of a UTS dorm room, we hacked away on a couple of custom built servers prototyping a new breed of distributed block storage for months – no mean feat.
    During this period we also wrote a cloud orchestration stack comparable to OpenStack, tons of internal tooling that few cloud companies would dream of having access to and many other things I am not privy to talk about yet.

    Though this might not show beyond the blistering performance of our service offering, we build very real technologies that are destined to do far more than any off the shelf platform. The very essence of our company is born out of innovation and a drive to win through overwhelming technological superiority.

    I don’t think I need to elaborate on the value of a linearly scalable, self-healing, high-performance block storage system. Companies like EMC, Isilon, 3PAR etc speak volumes in absence of my explaination.

    Besides – pondering whether or not we are worth millions is senseless, the valuation of any startup in our position is more art than science. Once again I wish I was able to speak more here but alas it is not the time yet.

    We have been profitable since our second month after launch and have experienced what can only be termed as explosive growth. We already have full time sales staff but for anyone reading – we are hiring! :) (You also might have noticed that Scott, one of our sales and marketing staff was in the background of the footage)

    For obvious reasons we were not showing any production codebase other than the Javascript that powers the frontend panel – though for the record its insanely hard to type with a massive camera over your shoulder. :P

    Maybe what is special about us is hidden behind a shroud of mystery? Not really – we openly speak about our technical innovation. It’s just there is not much of a forum in Australia to discuss the finer points of interupt remapping in the Xen hypervisor, or efficient online checksumming of distributed datastores. Believe it or not we -are- a high-tech company. We are -not- a glorified hosting company who just cobbled together Cloud.com, some EMC sans and XenServer.

    We are special because we are the people developing the next wave of technologies in IaaS – rather than trying to make a buck on a new industry running on decade old tech.

    I think I have said enough. I am just sorry you didn’t decide to even check with us on the validity of any of these facts before publishing this article.

    • hey Joseph,

      thanks for your comment, I appreciate it.

      I don’t have the technical knowledge to dispute any of the claims which you guys have made about the quality and speed of your service and the innovation which you’ve brought to the table.

      However, I am well-aware of what it looks like when a technology startup becomes over-exposed before it can deliver on its potential and promises. We’ve seen that happen in the US a lot recently, with Color being perhaps the best example of it. OrionVM has certainly reached that level in Australia — you guys are relentless self-promoters. Over the past year, your level of public relations effort has been similar to that of companies a thousand times your size.

      Many people in the technology startup industry see it as journalists’ job to help promote their companies and products, introducing them to their readers. Frankly, that’s not our job. It’s our job to inform and entertain our readers about events in the industry, as well as questioning the claims of those who are in power or aspire to power.

      I’ve laid down a pretty clear challenge to OrionVM. If you are the company that you say you are, then there’s an easy way to prove it — produce some case studies of successful companies who are using your technology in production environments. This is not an unusual question for me to ask. In fact, it’s the same question I ask every single technology company which approaches me.

      I don’t pay attention to the products that companies like Dell, HP, Fujitsu, Salesforce.com or Google offer, for example, until they can boast customer deployments. Here, I’m merely applying the same test to OrionVM.

      Harsh? No. Normal. It’s the test I’ve been applying to technology companies for a decade now.



      • I haven’t heard of OrionVM before now but this post smells motivated by jealousy and attention-seeking.

        > I don’t have the technical knowledge to dispute any of the claims which you guys have made about the quality and speed of your service and the innovation which you’ve brought to the table.

        This is only one of the explicit claims you make in your article. Stop trying to spin your words. You’re too lazy to check your facts so instead, you “throw down challenges”

        High school journalism. No wait. Even then they teach you to react to more than the first thing that comes to your head like any other lame punter out there.

        • hey Graeme,

          thanks for your comment. I’m interested to know what you think of OrionVM itself — have you used their service? I’d be especially keen to hear from any readers that have — would be interesting to compare. I know we have a fair number of readers (including myself) who have tested and used Amazon’s Web Services platform. I’ve also spoken to people who have used the Infrastructure as a Service offerings of Telstra, Optus and Ninefold. Opinions have varied about those platforms.



          • Seriously you are just embarassing yourself even more badly. You haven’t even used their service and you don’t know anyone that has and you’re STILL writing this article??

            Let’s put this article into perspective shall we?

            R LeMay needs some spare cash. Got to write an article. Oh here are some lads doing better than I am – that really gets my writing juices flowing. Gee let’s see if I can pick a few holes in a story done for a mum and pop news channel. Yeah yeah that’s it. Now I have the hate going AND appear like I know what I am talking about. Oh wait – some guy on my blog has called BS on me. Keep calm. Keep the conversation flowing cause it doesn’t matter if what you say is complete unresearched, minimal effort garbage, as long as people are commenting, I’m getting page views baby. So I’ll call for more comments from others who I can get charged up. Yeah who cares about content and facts man! This job is too easy!

            And this effort is better than Channel 10 journalism is it? Damn. Gimme crappy mainstream journos any day.

          • PS Took me five times to post the above reply. “Oops! Google Chrome could not connect to delimiter.com.au”. Delimiter.com.au : geniuses at choosing hosting providers.

          • There was no frustration or impoliteness in my reply. You are just not a very good journalist and should perhaps seek a new job. Simple statement of fact and plausible explanation provided.

            You’d probably be good at building a forum for a popular video game. Stick to where your strengths are – provoking reactions and getting a chat going.

          • “There was no frustration or impoliteness in my reply”

            I think you should look up those wrods in the dictionary then reread what you wrote in this reply and in previous ones. Or do you have some condition that makes you insensitive to noticing rudness in your own posts? (See that is an example of impoliteness)

            By the way, I don’t blame him for questioning just how successful the company is. Something stinks. Hard to see any facts past the hyperbole.

            You are probably good at being a forum troll. Stick there and don’t act as a front man for your enterprise.
            Most company emplyees/managers are smart enough not to post on a public forum.

      • Hi Renai,

        Thankyou for replying, the appreciation is reciprocated.

        I don’t think I can add much more value to this conversation. I have already said my piece, I will say but more one thing.

        Everyone has always told us we can’t build what we do, including yourself. But in the end benchmarks don’t lie and hundreds of customers can’t all be wrong.


        • I don’t think renai ever said you couldn’t/wouldn’t/didn’t build what you have built.

          I don’t think he ever really disparaged your technology. He disparaged your media coverage, which isn’t even under your control. Sure, you could invite some cameras in, you can give some interviews. But at the end of the day you can’t control whether or not you get a 15 second: “See the new australian group OrionVM doing new things in cloud computing” vs a 2.5 minute “new australian tech startup” puff piece.

  3. I think you’ve been a bit unfair Renai. Yes, the reporting from 10 was pretty poor, but they were spinning it as “young Aussie guys take on the world”, so they wanted to downplay their startup capital and build up their image

    They have more than $6,000 in funds – that was just what they had at the very start.
    They won $25,000 from at the recent Tech23, and they have paying customers.

    Sheng, the CEO is the sales guy and he’s a pretty good speaker. But you would have known this if you read your own article on them.

    • hey Ben,

      actually I’ve followed OrionVM pretty closely over the past several years and I am aware of both the Tech23 listing as well as the original funding etc.

      However, it’s still pretty much impossible to produce an infrastructure as a service platform of the level which they are hyped to with that level of funding. To put it in perspective, major IT services companies like HP, Fujitsu, Telstra, Optus and CSC are spending many millions on this exact sort of service in Australia at the moment.

      Is OrionVM a plucky Australian startup? Sure. Are they also over-hyped and over-promoted? Definitely. As I mentioned above in my response to Joseph, I’d like to see some successful customer deployments from them before I buy into the hype more. This is the same test I apply to all companies — big and small.



      • Fair enough to call them on the hype, but ridiculing them in the public arena is not really appropriate.

        I’m not sure why you chose to conflate the issues of Channel 10’s reporting with Orion VM’s potential. If you want to lampoon Channel 10, no need to drag Orion down with them. It was clearly a feel good puff piece fo mums and dads and I don’t think anyone who takes technology seriously pays any attention to TV news on any channel.

        I’m also not sure why you chose to rely on reporting you saw as dodgy, to back claims about the company. If you knew they had more than $25k+ in funding, why use $6k as a datapoint against them? If you knew they had sales people, why rely on a dodgy video that didn’t appear to show any as proof they didn’t?

        • I think they’ve done a good job of ridiculing themselves by agreeing to being on that piece in the first place. Renai writes for his audience, and anybody who reads Delimiter is going to think the same thing.

          a feel good puff piece fo mums and dads and I don’t think anyone who takes technology seriously pays any attention to TV news on any channel

          Firstly, those mums and dads who that piece was targeted at don’t read Delimiter. And secondly, why did they agree to be on that piece if all it did was make them look foolish, and their customers aren’t even going to be watching anyway?

          I have to side with Renai here. How many startups have you seen who claim to have world-changing technology, only to see them disappear shortly thereafter? OrionVM has been around for a while now (in startup terms) yet they still have no customers singing their praises? Well, OK, one customer running one website that managed 20,000 visitors per hour once — no offence, but that’s hardly the “enterprise” market the company seems to be targeting itself at. I mean, I can get that same kind of performance using a single server from a regular dedicated hosting providing, for about the same cost.

          I’m sure these guys can build a sustainable business. Dedicated and virtual hosting is a reasonably profitable business. I just can’t see why OrionVM are claiming themselves to be competitors of Google, Microsoft, Amazon and whatnot. There’s just no evidence that they’re even in the same league.

  4. I’m an extremely happy OrionVM customer and am proud to be one of their very first customers.

    I launched http://www.GetFlight.com.au on OrionVM and within two days hit the front page of news.com.au. OrionVM scaled us up within one minute to 16 cores to handle the traffic load, and the guys were absolutely 100% committed and responsive to help us cope with 20,000+ visitors per hour. I couldn’t ask for better, more savvy or knowledgable support from a hosting provider. The guys went the extra mile and I’ve since launched another Australian startup on their platform.

    Since 2008 I have architected cloud and SaaS solutions that now serve customers such as BHP, QBE, Allianz, and Toyota with thousands of users on mission critical business systems . Given my experience (and to be brutally honest, it’s far more than most people who claim to be an ‘authority’ on cloud computing) I would not hesitate to host these solutions with OrionVM as they have a superior platform.

    So, instead of judging startups for their ‘hype’ why not ask paying customers like myself for an informed and experienced opinion?

    • hey Ian,

      awesome! This is just the kind of comment I was hoping to provoke :) Thanks for commenting. I agree that most people are quite far from being experts on cloud computing … it’s a complex subject area. As a journalist I’m a generalist myself, although I do have a background in systems administration (woefully out of date now).

      I will note, however, that Getflight.com.au’s site did experience some downtime when the News.com.au traffic hit the site — as detailed here:


      Could you go into detail as to why you picked OrionVM to launch your products on — as in, what were the technical, pricing and other reasons behind the choice? In addition, it seems like you’re mainly using the company for public-facing web hosting services — have you tried them out for any other types of services?

      For everyone else, as a quick further example of the sort of hype I’m talking about, see this article on ShoeString Launch about OrionVM, entitled: “The Next Australian billionaires?”. I hardly think the company is close to the billion dollar mark just yet ;)




  5. Hi Renai

    We went “down” for about 5 minutes when the news.com.au article broke because to be honest, I didn’t expect that much traffic on the second day of a soft launch. Technically we never went “down” – we had a conservative concurrency limit configured on our front end web server, and when the traffic from news.com.au hit us, we served an error page. As I said, once we scaled up more capacity with OrionVM (in less than a minute) we were able to more than meet the demand.

    Why did I choose OrionVM? They tick all the technical, performance and pricing boxes. I’m also a passionate supporter of Australian startup-ups, and I put my money where my mouth is!


  6. Hi Renai,

    The whole point of Shoe String Launch is to inspire those building a business through profiling startups, sure we may use attractive wording to get people clicking on the articles, but at the core of the article we focus on the people and what they are doing during the startup process for their new business.

    The article on Shoe String Launch poses a question “The Next Australian Billionaires?” we were not talking about their current wealth. However I do think that it is highly possible that one day they may be and I genuinely hope they do make it to that point.

    I think it is important to support the startup community from a media perspective, not many startups have the opportunity to share their story in main stream media and we love that we provide a platform for them to get a positive story that helps motivate others out there.

    Some of Australia’s largest companies are customers of OrionVM and I hope that they join this post and give their feedback for you to give you a broader perspective.



    • hey Mat,

      when I was news editor at ZDNet.com.au we started a startup blog on the site named ‘bootstrappr’. The idea was to chronicle the growing Australian startup community.

      However, at the time when I started the blog I was conscious that there are two sides to the startup industry. There’s the startups that succeed, and go on to become great companies, or achieve liquidity events such as listing, being acquired or so on. These are the minority.

      Then there are the rest — the majority. The startups that fail and that go bankrupt or are sold for a song.

      I felt it was important to chronicle both of these sides of the industry, and so we built into our coverage the idea that we would not only make a call after covering a startup about whether we thought that it was going to succeed or fail (boom or bust), but that also that we would cover startups when they failed or made mistakes, just as we did when they were formed or succeeded.

      it’s important to do this because otherwise the lessons from their failure aren’t learnt and other startups make the same mistakes.

      After they nagged me for a while, I did profile OrionVM about a year ago. What that coverage represented was what you described as ‘the positive’ nature of covering startups.

      However, what I wrote today reflected the idea that we must also be critical of startups as we are of any other company, person or issue as journalists. There is an incredible amount of hype floating around OrionVM, most of it created by the company itself. I’m not sorry for puncturing that balloon — in fact it’s my job.

      I would be a hypocrite if I only criticised large companies like Telstra, IBM, Microsoft, Google and so on, and did not apply the same criticism to startups like OrionVM.

      This is what journalist objectivity means — we must write what we think, without fear or favour. Your comment comes very close to implying that journalists should only write positively about startups, and not criticise them when they have problems. I feel that’s a flawed approach, and it’s not one that I follow. TechCrunch has a deadpool list for a reason.

      It is often the case that when journalists criticise startups, we are accused, as I have been today, of not understanding the company, or being biased against startups, or something of this nature. This kind of formless accusation is basically what you’ve painted me with — you say I need a broader perspective. But there have been very few points in this discussion today that have actually addressed the granular points I made about OrionVM — their ability to scale with their level of funding, the competitive forces in the industry, and a lack of publicly disclosed customers.

      As I noted in the article up front: “I like OrionVM and the guys that work there, and I’m cheering for them.” But I would like to see the points I made discussed, rather than what people feel is some sort of selfishly motivated attack against them. Let’s get down to the details around OrionVM’s hype … rather than just saying that I’m a bad journalist or ill-informed.

      Lastly, I would remind you that I am also the founder of a startup myself — Delimiter. I go through all of the same ups and downs as every other startup founder — including criticism from the media — and so I know precisely how the guys at OrionVM feel. The fact that I am up monitoring comments and posting responses at 1:34AM on a Friday night, should, I believe, go some way towards demonstrating that fact ;)



  7. Dear Renai,

    You sound a little jealous that you aren’t getting some impressive media exposure for your startup. These boys are clearly super talented, business minded superstars who are putting their product out there at the right time. I read up about them in Shoe String Launch which is an awesome magazine (you rock SSL!)

    Rock on OrionVM! Don’t listen to the haters!

  8. Hi Renai,

    I wasn’t implying that journalists should only cover positives about startups or that you were a bad journalist, I was pointing out the reasons behind the way I wrote the article on Shoe String. Our goal is purely profile pieces, sure we write blogs and opinions but our core focus is on the positive side of startups and when we run articles about mistakes and failures we like to get the startups and entrepreneurs to share their learnings, so that others can learn as well.

    I am not a Journo so the blogs I write for the site reflect the types of things that motivate and inspire me.

    In regards to the “broader perspective” I wasn’t referring to the startup scene, I was referring to the specifics around OrionVM’s customers etc. They do represent some very large players, however it is up to their customers whether they want to be named publicly, not OrionVM.

    I hope that some of these customers do come forward and join the discussion.



  9. i don’t come from a technical background or a journalism background, but what i do know is that what the news really talks about these days isn’t always all that true or should be payed close attention to sometimes. If they decide to do a big hype on OrionVM well let them, it doesn’t change what Orion has achieved or will achieve. If they think that the Kardashian sisters are worth news airing time, then yeah, the quality of news overall is questionable. So is this article as it tries to make a judgement on something not quite worth judging , or it would have been nice to see(although proven later in the comments) in the article itself that you are much more familar with OrionVM s service and product or give them a decent chunk of credit jjst doing what they want at such a young age, and well, getting air time, quality or not

  10. Hey,

    Your article seems to be a bit one sided tbh. You claim that you want ‘evidence of them being world beaters’ and yet you do not consult anyone from the company (or their clients)?

    • Hey Ash,

      I’ve been interacting with the company in the comments, but they haven’t come forward with any further info yet. I’d be happy to publish it if they did.


  11. Renai – Jealousy is a curse! These kids seem extremely talented and headstrong.

    You say they are definitely over-hyped and you ask is there something special about them to beat “bigger” competitors, to which you bluntly write “no”.

    They have the fasted network-backed storage performance in the world, I fail to see how you can dismiss this evidence like it’s meaningless? They are faster than any other you mentioned in your article, even the importantly “Macquarie Telecom backed” Ninefold.

    For someone who believes they are a “generalist” you obviously are over-hyping your own accolades.

    You also comment like you understand the cloud computing caper and how sales work in this sector, being slow and what not, but then you comment you actually don’t have enough knowledge on cloud computing? How can you comment on sales when you don’t know how a product can be sold? Did you speak to ANYONE who uses cloud computing and ask for their thoughts, let alone a cloud specialist?

    And then you make a comment on their staff situation by watching a 5min cut video because all you saw were “just geeks typing on a keyboard”… I mean you don’t even understand journalism! Did you think the video was going to give you a full in depth run-down of their business? You said you have been following them for “years” but you had no idea that they actually DO have sales people?

    This article is a joke and I won’t be reading articles from this site again. – There is some feedback for you.

    P.S. “Interacting with the company in the comments” after the article is posted, isn’t the same as contacting them or conducting due diligence PRIOR to publishing.

    • hehe I’m not jealous — I’ve got my own startup, after all ;) And I do think these guys have a bright future. However, that doesn’t mean they’re not overexposed.

      As for the fastest network-based storage claim, I’m sure it’s accurate, but there doesn’t seem to be a stack of obstacles to other companies implementing a similar system. There are quite a lot of details about OrionVM’s platform here:


      I quote:

      “OrionVM, a cloud startup in Australia, has developed their own distributed, horizontally scalable, external storage architecture based on a high performance communication link called Infiniband. Instead of using dedicated storage hardware, OrionVM uses the same hardware for both storage and server instances. The server instances use storage located on multiple external hosts connected to it via redundant 40 Gb/s InfiniBand links. If a physical host fails, the instances running on it can be restored on another host because their storage resides externally.

      OrionVM also replicates storage across multiple host systems allowing for fault tolerance should a storage host fail. This hybrid approach combines the benefits of ephemeral storage (i.e. lower multi-tenancy ratio, faster IO throughput) with those of external storage (i.e. host failure tolerance). Multi-tenancy performance degradation is also not a significant factor because OrionVM uses a distributed, non-centralized storage architecture. This approach scales well horizontally because adding a new host increases both instance and storage capacity. Use of 40 Gb/s Infiniband also provides very high instance to storage throughput.”

      Extrapolating, I would say it seems like what OrionVM has done is some integration work between the InfiniBand platform, their Dell servers and some other platforms. Most of the constituent parts they’re applying here are readily available. Are you suggesting Amazon, Microsoft (with Azure) and others can’t build similar platforms, with the vast resources they can apply to the situation? Because that’s all I’m suggesting.

      If OrionVM’s technology really *is* that good, and it’s unique (patentable?) then there is a likelihood that someone else will try to reverse-engineer it, or simply buy OrionVM outright for mega-dollars, which is what I consider a more likely outcome.

      • Your comments seem to have more research applied to them than the original article – Which read like a jealous attack on a very intuitive startup.

        You seem to dismiss this startup on the grounds that “Amazon, Microsoft and others” are too powerful for a small company to grown large in this space.

        For added information, I have a client who has 12 servers in Macquarie’s Intellicentre (and their hosts are running esx 3.5!) who are paying an absolute bucket-load each month which I believe is a rip-off, as a result they will be moving the servers in-house as they have the equipment available to them (if they didn’t I would be exploring OrionVm in more depth).
        The performance of Macquarie is pathetic, the DC’s which have nothing running on them were spiking at 96% constantly AND their hosts have maxed the RAM so they are unable to add anymore to the VM’s and space is also an issue.
        A joke from a large company really.

        Maybe you can write a piece on how greedy large companies, such as Macquarie/Fujistu etc, that they charge ridiculous amounts for cloud services but have extremely poor infrastructure and performance and ask why they haven’t pushed the boundaries on developing new-age technologies (if not only modified but certainly not off the shelf) like the OrionVM guys have.

        • Oh, don’t worry, I agree with you entirely about Macquarie, and I’m sure it’s a similar situation at companies like HP etc. I know Fujitsu has gone through a whole infrastructure rebuild for their cloud solutions, so I think it’s a bit different there, but of course it would be pricey.

          And I do criticise the big companies a fair bit. You can see examples here:


          I tend to trend towards positivity for Australian IT startups (because I believe in startups, technology and I really want local companies to succeed against the multinationals), but there are points at which I feel I have to push back on them as well. It’s rare — but it does happen — perhaps once every six months or so.

          I think the thing that people miss a bit about this article is that people kinda assume I had a knee jerk reaction after seeing the Channel Ten report. But that’s not the case — it’s been kicking around in the back of my head for a while that OrionVM was overhyped, after six months of reading article after article and receiving several dozen emails from the company seeking publicity. But I didn’t want to investigate the company and do an in-depth piece — that would be giving the issue more effort than it’s worth. The Ten report was the straw that broke the camel’s back — I just wanted to push back a little against their hype.

          Because I’ve received a lot of criticism about the article since, I’ve read through it several dozen times over the past week and watched the news report and other reports about them a fair bit — questioning myself to see if I went too far, as I occasionally have in the past. However, in this case I still stand by the story. The reaction of a few regular Delimiter readers has also given me confidence I’m not way out of line as well :)

  12. Heads up, this article causes Safari to crash on my iPad, but only when viewing with the iPad theme.

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