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Several big announcements rained down from the Internet clouds over the past few days. Amazon announced support for Microsoft Windows in their EC2 cloud. They will support both the Windows OS (AD, IIS, .NET, etc) and SQL Server. Additionally they are providing a 99.95% uptime SLA for their services. This is a respectable goal for a cloud hosting service.
Microsoft, not to be outdone, announced their own cloud computing offering called Azure. We all knew that Microsoft was working on a cloud hosting service over the past year. It’s nice to finally hear some of the details. Microsoft’s service is initially geared towards developers but it’s not hard to see that small businesses are the next likely target. Microsoft provides additional support in the cloud for technologies like Microsoft Dynamics, Sharepoint, and Live.
Someone recently asked me the question: “Are clouds going to compete with dedicated hosting services?” My response was both yes and no. Cloud hosting from Amazon and Microsoft will definitely compete with unmanaged dedicated hosters like The Planet and SoftLayer. Cloud hosting is nothing more than virtualized Platform-as-a-Service (PaaS). I also think cloud hosting will directly compete with smaller datacenter colocation deals. Think about it. If you are a company looking to colo half-a-dozen servers at a datacenter you could save significant capex and infrastructure headaches by using virtual servers in a cloud. Plus you could take advantage of the global business continuity features of a large cloud.
I don’t believe clouds will compete with managed hosting providers — yet. The simple reason is that cloud hosters don’t provide server management. They are purely infrastructure plays with some cool APIs. I’m sure some smart group of people is thinking about building a managed services business on top of a cloud platform. You just need the technical talent, marketing, and luck.
If someone asked me what I wanted to be when I grew up I would say “SoftLayer!”. I’m impressed by their focus, their open architecture, and their frictionless business processes. SoftLayer probably looks like another me-too Internet hoster to a layperson. But to someone in the business this company is a shining example of how to do-it-right. I own and work at a hosting business and companies like this keep me awake at night — not out of fear, but because they prove what is possible in our industry. And I think everyone needs to identify a business in their industry that they look up to.
I love the fact they provide an open API that customers can leverage to manage their computing resources. Customers can use the API to integrate internal business processes with their service provider’s processes. As service providers become more of an extension of corporate IT’s internal resources these types of APIs will become more critical.
SoftLayer engineers also designed a network architecture which provides both performance and management benefits. They can easily connect multiple dedicated servers using a private internal network. The big benefit of a private network is that customers don’t have to pay for bandwidth consumed by servers talking to one another (i.e., web app server talking to a database server). Hosters like The Planet used to make oodles of cash off of companies that had heavy bandwidth utilization between servers. This kind of bandwidth effectively costs the service provider nothing.
SoftLayer’s frictionless business processes really separate the company from the pack. Take the service ordering process for example. You can go from an online order to a fully provisioned dedicated server in minutes. You can manage that server remotely using KVM-over-IP functionality. Need to reboot the server? No problem. They provide managed power port access. Need to rebuild your server? Again, no problem. You can rebuild your server using one of their server imaging systems.
SoftLayer didn’t invent anything new in the sense that most of these technologies have been around for years. Their success is based on their ability to elegantly bundle these technologies in a way that can be fully managed by their customers. The company recently announced a partnership with Citrix to build a cloud computing infrastructure. I plan to follow this new effort very closely.
