GoDaddy’s now offering a cloud – why don’t more companies do that?

Turning a private cloud into a public cloud as a service is not for the faint of heart

GoDaddy cloud IaaS virtual private servers

This week GoDaddy, the domain registrar, announced a new public cloud computing service that offers virtual servers to developers that can be spun up within minutes and scaled up and down as needed.

With the news, GoDaddy has jumped into the cloud computing market. And it raises the question: Why don’t more companies that have a substantial internal infrastructure offer it as a service to customers?

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The short answer is because it’s hard.

For GoDaddy, the transition to selling cloud as a service is a natural extension of the company’s services. GoDaddy offers domain name services and website hosting, so providing an application development and virtual server environment is a logical progression of its offerings. Still, it took investment to develop the infrastructure platform into one the company could sell as a service to customers. “Creating a product is a complex effort,” says GoDaddy’s GM and SVP of Hosting Jeff King. GoDaddy based the service on OpenStack, the open source cloud software that can be used to build public or private clouds. But OpenStack isn’t a cloud in a box that can be spun up and sold as a service. GoDaddy had to incorporate a billing feature, which wasn’t included in OpenStack, for example.

There are myriad other factors to consider when selling compute and storage as a service: security, support, reference documentation, legal liability. “These and other considerations are difficult challenges that would prevent any company from just productizing and selling the cloud service they built for internal consumption,” King says.

There’s another reason more companies don’t jump head-first into becoming a public cloud provider to the masses. There are already a bunch of companies who offer compelling services. Amazon Web Services is considered the leader in pure IaaS and related services. Microsoft, Google and IBM are considered other leaders. Those are big companies with deep pockets to compete against.

GoDaddy’s service is not going head to head with AWS. GoDaddy is offering virtual private servers, which is basically access to raw virtual machines. AWS’s Elastic Compute Cloud is a much more granularly-controllable infrastructure environment that can be customized to many different use cases, including high performance workloads. GoDaddy’s offering would compete more closely with something like a Digital Ocean offering. The one thing all those providers have is scale. To make an as-a-service offering work, you need massive scale to prevent it from being a losing proposition. With more scale comes more management complexity, and needing a team to oversee it. “Capital is huge and achieving scale and sustaining it is not an easy problem to solve,” says Krishnan Submaranian, an analyst at Rishidot Research, SVP of Strategy at vendor CloudMunch and former Red Hat cloud strategist.

It wouldn’t be out of the question to see some more companies offering their infrastructure as a service, but it’s not for the faint of heart.

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