When CenturyLink bought cloud startup Tier3 for $200 million earlier this month, it acquired a technology platform and a group of people that should let the telecommunications giant take full advantage of its dozens of data centers and expansive fiber network. The man heading up that effort is Jared Wray, the founder and CTO of Tier3 who’s now the CTO for cloud computing at CenturyLink, and he came on the Structure Show podcast this week to share his thoughts on evolving from being a small cloud provider into, potentially, a very large one.
Here are some highlights of our interview with Wray, centered around his thoughts on what it will take for other cloud providers to finally emerge from the shadows of Amazon Web Services, Microsoft and Google. If you want to hear about CenturyLink’s plan for building a single cloud platform out of its Tier3, AppFog and Savvis acquisitions, or about the intricacies of selling cloud computing to enterprises, you’ll want to listen to the whole show.
1. Get out of Florida
“Seattle has become the mecca of cloud,” Wray said, noting the presence of itself (and now CenturyLink), AWS, Microsoft, Google and others. “…That’s a lot of engineering talent that understands how to build cloud, how to make it happen, what distributed computing is really about — especially for cloud resources.”
Wray thinks telcos trying to build legitimate cloud computing businesses from their traditional corporate hubs are going to have a tough time, particularly around finding the talent they need.
2. Size matters
“When we talked to customers before this acquisition, it was, ‘We love everything about you guys.’ … But then they’d say, ‘Wow, you’re really small,’” Wray acknowledged.
Now, his company of about 60 employees running out of nine data centers is part of a company with thousands of employees and 55 data centers around the world. Wray said Tier3 had been able to secure some decent partnership deals with large data center operators and value-added resellers, but even those were hard-fought at times because “big companies want to do business with big companies.”
3. Find a niche and own it
“I actually think you can compete [as an independent IaaS provider], but you’re going to have to isolate yourself and find an industry or a channel that you own,” Wray said. “And you have to completely own it.”
He was referring to the spate of consolidation and large-vendor entries into the infrastructure-as-a-service space, which now has very few privately held providers (GoGrid and Virtustream are the only two among Gartner’s 15 Magic Quadrant providers, for example). He pointed to Virtustream’s focus on running SAP applications as a good example, and also noted the possibilities in spaces such as health care and government workloads.
4. VMware is a competitor and a great partner
“In the end, this market’s growing fast, so there’s plenty of pie for everybody,” Wray said.
Yes, Tier3 was (and CenturyLink is) a VMware partner, but they’re also competitors with all of VMware’s other partners and even VMware itself as it gets deeper into the cloud space. The trick to navigating this potentially tricky situation might be to find value beyond just offering up on-demand VMware instances.
“Really, the hypervisor is becoming irrelevant, if you think about it,” Wray said. “Nobody, in the end, cares. They care about it when they’re private because they have to manage it and use it, but when it comes to cloud they just know that we’re gonna give them an SLA and we’re gonna stick to that.”
5. What can platform-as-a-service do for you?
“There’s a lot of things that the framework of Cloud Foundry does that’s above what Docker does,” Wray explained. “I think Docker is an amazing suite of technologies — we’re already working on some things to use for Docker — but you have to kind of think about what tool you’re gonna use in your toolbelt and when.”
This is more than just an endorsement of two different PaaS projects — it’s also a testament to how much thought Tier3 had been putting into being more than an IaaS provider. Tier3 actually built a .NET-centric take on Cloud Foundry called Iron Foundry a couple years ago, and now it’s looking to Docker (as well as the AppFog PaaS technology CenturyLink acquired in June) to help expand that vision.