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Summary:

There’s already a ton of activity taking place in the cloud computing space, so much so that it can be hard to know who to watch. In many cases, it’s too early to pick winners. But there are distinct sectors of the IT industry that are […]

There’s already a ton of activity taking place in the cloud computing space, so much so that it can be hard to know who to watch. In many cases, it’s too early to pick winners. But there are distinct sectors of the IT industry that are particularly well suited to the on-demand, pay-as-you-go economics of cloud computing. Here are eight segments — and one company that’s a segment all its own — that we’re tracking closely.

Hosting companies that make the jump: When it comes to reliable managed hosting, Rackspace leads the pack. (Its VMware-based Mosso offering may appeal more to enterprises trying the cloud for the first time.) Clouds like XCalibre’s Flexiscale and Joyent are already there, but don’t have Rackspace’s installed base.

Stack-specific clouds: While Google and Amazon get the headlines, Engine Yard is heavily involved in the Ruby on Rails development community. Competitor Heroku is also Rails-focused, but relies on Amazon for its hosting platform.

Tools to wrangle virtual machines: To manage your EC2 machines, you’re going to need help. RightScale makes software for managing machines in the cloud; its tight focus on Amazon has made it an early favorite. Elastra, Enomalism and others have similar solutions.

Testing sandboxes: For many enterprises, a testing sandbox is the perfect way to start using on-demand infrastructure. CohesiveFT’s Skytap (a sister to Flexiscale) spins up testing machines in a cloud, but incumbent Surgient and recent entrant StackSafe aren’t far behind. And once you’ve tested a machine and seen that it works, why not leave it in the cloud?

Cloud-based development platforms: Companies like Rollbase and Coghead let non-developers build data-driven applications of any sort (as opposed to more specialized platforms like those of Salesforce and Ning.) But Intuit’s Quickbase, which now has access to Quickbooks data, has a head start: Millions of small businesses. Is this how SMB gets cloud?

Scaling frameworks: Wall Street needed fast, reliable applications that grew easily. Instead of adding more, bigger servers, they used Gigaspaces to bundle whole server clusters into discrete “processing units” that can be cloned to add capacity. In addition to being faster and scaling better, these units don’t care whether they’re in a private data center or a cloud.

Application delivery networks: What has tens of thousands of servers worldwide, a global network connecting them, and isn’t Google? Akamai. What was once a way of getting bits to far-flung corners of the Net is an often-overlooked cloud: Akamai has been able to run code at the edge since 2000. Its 2007 acquisition of Netli made it matter to enterprises even more. Akamai can weather heavy load and may be able to withstand attacks better than centralized clouds.

Cloud builders: 3Tera lets companies get into the cloud business. Enterprises can make in-house clouds on existing data centers; or service providerscan build their own cloud offeringsin the way Enki and others have. In 3Tera’s model, subscribers drag and drop the firewalls, servers and appliances they need. The company’s software then maps these virtual application stacks to servers and network segments. The results are impressive: On seeing 3Tera for the first time, ESM guru John Willis was so impressed he insisted on logging in to the icons on his screen to verify that it wasn’t just a demo.

The obvious one: Of the three big virtualization firms, only one (Microsoft) also has millions of desktops, two handset platforms, licensing for desktops, servers and applications, synchronization, and a huge online presence. Up until now, the Redmond giant has been treading carefully; it has to convert billions of dollars of shrink-wrap sales to on-demand revenue streams. But Microsoft’s going to be a huge player in the cloud.

For more insights into cloud computing trends, check out the recent GigaOM/Bitcurrent briefing on cloud computing that was launched at Structure 08.

  1. Thanks for sharing the links, and thanks also for keeping us informed on who’s sectors to watch.

    nhick
    http://www.itrush.com

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  2. The pay-as-you-go economics requires a monetization engine which includes the rating, invoicing and billing capability for usage. The previous model for applications was “build -> run -> manage”. “Manage” ensured availability, security etc.

    The ondemand model needs a new step for “monetize”. Companies like eVapt fulfill this need for the cloud computing model and it is not clear it falls under one of the 9 sectors in this article. Perhaps it should be the 10th sector termed monetization platform.

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  3. Dean J. Garrett Sunday, July 20, 2008

    One important but less discussed trend made possible by cloud computing is the number of useful “database community websites” being published. Such a site is similiar to a wiki in how the site’s data content is provided by the users themselves. The sites are free to all who want to search the database and to post new data. The sites are made possible by the use of cloud databases, Software-as-a-Service solutions designed to make web database publishing quick, simple and cheap. Here are two good examples of database community sites:

    http://www.PhotoEnforced.com – this site publishes a database of locations where cameras are used a street intersection to photograph violators.

    http://www.GasPricesCentral.com – this site publishes a database of gas prices in metro areas around the country.

    These kinds of sites are serving a public need by distributing useful data openly through the cloud. This is just one area where cloud computing is making a difference.

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  4. Correction above – Skytap is not a subsidiary of CohesiveFT or a sister company of Flexiscale, but an independent company. Skytap does have a partnership with CohesiveFT to distribute their Elastic Server virtual machines

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  5. [...] Inside the Cloud: 9 Sectors to Watch – GigaOM …there are distinct sectors of the IT industry that are particularly well suited to the on-demand, pay-as-you-go economics of cloud computing. Here are eight segments — and one company that’s a segment all its own — that we’re tracking closely. Filed under: Cloud Computing, GigaOm by Nitin Badjatia @ 8:58 am | July 21, 2008 | | Top    [...]

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  6. Phil Clarke Monday, July 21, 2008

    To add further to Ian’s pertinent comments on CohesiveFT, I would like to add that we have also just announced a partnership with Gigaspaces to provide simplified scalability in the cloud. Please see the following link for details: http://www.marketwatch.com/news/story/gigaspaces-partners-cohesiveft-provide-simplified/story.aspx?guid=%7BB3AE4E9B-D016-437F-B7E0-D12F2FF63D6A%7D&dist=hppr

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  7. Alistair, I might suggest a 10th sector you omitted: Virtual Appliances. Disclaimer- I’m one of the co-founders of JumpBox.

    You can think of Virtual Appliances as “freeze-dried” applications. They’re self-contained virtual computers that come pre-packaged with management tools and a fully-functioning application so that you just turn them on and they work instantly. They run on virtualization and many (including our own as well as rPath VA’s) can be deployed into cloud computing services like EC2. This container technology that wraps an application with it’s OS and dependencies serves as an important vessel allowing it to run anywhere and making cloud computing relevant for a huge number of people for whom it wouldn’t be otherwise.

    For a deeper understanding of this space see the review that Linux.com published on JumpBox this past Friday-> http://www.linux.com/feature/141391

    Sean

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  8. @Ian/Phil – thanks for the clarification. I’ve always been confused about the Cohesive/Skytap/Flexiscale relationship.

    @Ranjit – licensing and billing is indeed an important component if clouds are to make money. I’m not sure that it’s going to be a motivator for people to embrace the cloud (although comfort with an incumbent licensing model gives folks like Microsoft an advantage.) Kiril Sheynkman of Elastra cited licensing as a major obstacle to cloud adoption.

    @Sean: Virtual appliances are indeed a way to take chunks of the enterprise and move them into a cloud. One of the things I like about Gigaspaces’ model is the ability to spin up new, self-contained components wherever it makes sense, and virtual appliances share this advantage. JumpBox and rpath are definitely interesting players in this sector.

    When we initially started working on this piece, we were going to point to companies to watch. But as these comments make clear, it’s still early days for that. Billing and virtual appliances are certainly two additional sectors worth watching. Thanks for the feedback.

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  9. Alistair – I really like that you named GigaSpaces’ category “Scalability Frameworks”. You hit the nail on the head. Cloud providers, such as Amazon, Flexiscale, GoGrid and others provide the basic infrastructure to scale applications on-demand, which is great. But for a wide range of applications there is still a gap of how to make the application itself scale on-demand on this infrastructure. It doesn’t work with traditional middleware and platforms. As more companies get on the cloud this issue will grow in importance.

    I also think the comment on billing and payments is a good one. We’re facing some challenges in that area with our cloud offering. One interesting start-up in this category is Zuora (http://www.zuora.com).

    Geva Perry
    GigaSpaces

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  10. There’s a lot more to watch:
    http://saaslink.googlepages.com/SaaSMap_LairdDickson_May08.png

    Also, I’d add other I have heard of:
    Mosso
    Mor.ph

    This is a burgeoning area. Tracking it is a nightmare right now.

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