Cloud computing disrupts the vendor landscape

Non-traditional players like Amazon and Google shake things up, but enterprise mainstays like Microsoft and VMware may get the last laugh

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AT&T, British Telecom and Verizon lead the pack of carriers in the cloud to some degree, but in terms of building out reliable IaaS-focused data centers, Verizon is the most advanced, Coyle says. He argues that the point of the Terremark purchase was not the extra data center footprint, but the management services that Terremark wraps around its IaaS.

Managed services are where the real money lies for cloud vendors, says Coyle, adding that the Amazon's of the world are driving prices down so low that the carriers will not be able to compete on raw compute power alone.

"IaaS companies are starting to realize they have to offer these managed services - or at least create APIs so you can have management software plug in and monitor these clouds like you do your internal assets -- to get into the enterprise and pull in their next level of business," Coyle says.

Rackspace was so confident that customers would be willing to pay for these wrap around services like application deployment, deep system monitoring and unified hybrid cloud management, that the company spearheaded the OpenStack project to make basic IaaS platforms interoperable.

As vendors try to hone their competitive edges, customers are finding that they're not limited to one IaaS provider.

Shelton Shugar, senior vice president for SaaS at CA Technologies, oversees IaaS vendor selection. "You have to factor in each IaaS's scale, global footprint, quality, price and the flexibility in which they can adapt to your particular project.'' The answers to those questions will vary with the scope of each cloud project.

Having multiple (he advises not more than three or management becomes a nightmare) IaaS providers will become common place, says Shugar, who divulged his company uses Rackspace but declined to name the others in CA Technologies' multi-vendor IaaS strategy. Having multiple IaaS providers gives CA better worldwide coverage and a bit of an edge in negotiating favorable terms.

"It's good to have a couple of IaaS providers working for you to share the load," says Doug Harr, CIO for Splunk, a data mining and indexing software developer in San Francisco, which also runs all of its business operations in the cloud via Netsuite's SaaS offering.

Harr explains that Amazon is the company's default IaaS provider because its service is so wide and deep. "But every project brings a new evaluation, so the choice is wide open based on the use case," Harr says.

And that seems to be the prevailing wisdom at this point. Enterprises looking for cloud services should check out the big names, but should also take a good hard look at the many innovative cloud start-ups.

Burns is a freelance writer and editor based Carlisle, Pa., who has over 15 years experience covering the networking industry. She can be reached at

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Copyright © 2011 IDG Communications, Inc.

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