10 cloud computing companies to watch

is spreading through the IT world like wildfire, with innovative start-ups and established vendors alike clamoring for customer attention.


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Generally speaking, cloud providers fall into three categories: software-as-a-service providers; infrastructure-as-a-service vendors that offer Web-based access to storage and computing power; and platform-as-a-service vendors that give developers the tools to build and host Web applications. Here are 10 cloud companies that are worth watching.

Company name: Amazon 

Founded: 1994

Location: Seattle

Cloud offering: Amazon Web Services, a half-dozen services including the Elastic Compute Cloud, for computing capacity, and the Simple Storage Service, for on-demand storage capacity

Why we're watching it: Amazon is one of the true innovators in Web-based computing, offering pay-as-you-go access to virtual servers and data storage space. In addition to these core offerings, Amazon offers the SimpleDB (a database Web service); the CloudFront (a Web service for content delivery); and the Simple Queue Service (a hosted service for storing messages as they travel between computers). By launching the Elastic Compute Cloud in 2006, well before most of its competitors, Amazon has become almost synonymous with "cloud computing." But criticisms are starting to pop up regarding Amazon's reliability and service-level agreements.

CEO: Jeffrey Bezos, Amazon's founder, was previously a financial analyst.

How Amazon got into cloud computing: One of the largest Web properties in existence, Amazon always excelled at delivering computing capacity at a large scale to its own employees and to consumers via the Amazon shopping site. Offering raw computing capacity over the Internet was perhaps a natural step for Amazon, which had only to leverage its own expertise and massive data center infrastructure in order to become one of the earliest major cloud providers.

Who uses the service: Tens of thousands of small businesses, enterprises and individual users. Prominent customers include the New York Times, Washington Post and Eli Lilly.

Company name: AT&T 

Founded: 1983

Location: Dallas

Cloud offering: Synaptic Hosting, an application hosting service that offers pay-as-you-go access to virtual servers and storage integrated with security and networking functions.

Why we're watching it: Amazon and Google may be the biggest names in cloud computing today, but don't discount the built-in advantage telcos have when it comes to infrastructure. "Building publicly accessible cloud infrastructure is not inexpensive or uncomplicated," Pund-IT analyst Charles King says. "The service providers already have those infrastructures in place – the data center assets, connectivity and billing."

While AT&T has a head start, rival Verizon offers cloud-based security services and seems poised to make a larger run at the cloud market later this year. 

CEO: Randall Stephenson, appointed in 2007 after three years as AT&T's COO.

How AT&T got into cloud computing: AT&T's foray into the cloud began in 2006 with its purchase of the USinternetworking, an application service provider with enterprise customers in more than 30 countries. When announcing Synaptic in August 2008, AT&T said it had combined USi technology's five "super Internet Data Centers" in the United States, Europe and Asia, which will act as regional gateways to the AT&T cloud network.

Who uses the service: Synaptic is powering major Web properties such as the official Web site of the U.S. Olympic Committee.

Company name: Enomaly 

Founded: 2004

Location: Toronto

Cloud offering: Enomaly's Elastic Computing Platform (ECP) is software that integrates enterprise data centers with commercial cloud computing offerings, letting IT pros manage and govern both internal and external resources from a single console, while making it easy to move virtual machines from one data center to another.

Why we're watching it: Unlike the other nine vendors on this list, Enomaly doesn't offer services of its own over the Web. But its software could prove crucial as enterprises grapple with the problem of managing a wide array of computing resources that live both inside and outside the firewall. has recognized Enomaly's promise, bankrolling the company's product development, which focuses heavily on managing the various hypervisors used both within enterprises and by cloud providers.

CEO: Richard Reiner, called out of semi-retirement to become Enomaly CEO this year. Most recently, Reiner was founder and CEO of Assurent, a software-as-a-service company acquired by Telus in 2006.

How Enomaly got its start: Enomaly was born five years ago as a consulting business, but later developed an open source management tool that runs on top of the Xen hypervisor. Enomaly dropped its consulting business for good last year to focus on cloud management software.

Who uses the service: More than two dozen customers have been named publicly, including Business Objects, France Telecom, NBC, the Canadian government, Deutsche Bank, Best Buy, and several universities.

Company name: Google 

Founded: 1998

Location: Mountain View, Calif.

Cloud offering: Google Apps, a set of online office productivity tools including e-mail, calendaring, word processing and a simple Web site creation tool; Postini, a set of e-mail and Web security services; and the Google App Engine, a platform-as-a-service offering that lets developers build applications and host them on Google's infrastructure.

Why we're watching it: No one knows the Internet quite like Google. While the company's main focus is crawling the Web and delivering advertising-supported search results, Google's foray into software-as-a-service applications for businesses is hastening the industry's move from packaged software to Web-hosted services, and App Engine provides a credible alternative in the platform-as-a-service market.

CEO: Eric Schmidt, former CTO of Sun and former CEO of Novell, took the helm in 2001.

How Google got into cloud computing: Google Apps was the company's attempt to branch out beyond the consumer search market and become a player in the enterprise. Google unveiled the enterprise version of Apps in February 2007 in a competitive strike against rival Microsoft, and followed up by releasing App Engine in April 2008.

Who uses the service: Lots of small businesses, enterprises and colleges including Arizona State University and Northwestern University.

Company name: GoGrid (a division of ServePath) 

Launched: March 2008 (ServePath was founded in 2001, GoGrid development began in 2006)

Location: San Francisco

Cloud offering: The GoGrid platform offers Web-based storage and the ability to quickly deploy Windows- and Linux-based virtual servers onto the cloud, with preinstalled software including Apache, PHP, Microsoft SQL and MySQL.

Why we're watching it: GoGrid, one of Amazon's chief competitors in the cloud storage and compute markets, distinguishes itself from Amazon in a couple ways. GoGrid offers Windows Server 2008 instances (Amazon offers only Windows Server 2003) and 100% uptime service-level agreements (Amazon offers 99.95% for compute and 99.9% for storage).

CEO: John Keagy, the CEO and founder of ServePath, built and sold several ISPs in the decade prior to starting ServePath.

How GoGrid got its start: Executives at ServePath, a dedicated server hosting company, created GoGrid after deciding that inefficiencies within the standard hosting model could be alleviated with a self-service, pay-as-you-go infrastructure.

Who uses the service: Mostly start-ups, Web 2.0 and SaaS companies, plus a few big names like SAP and Novell who are running pilots or small test projects on the GoGrid service.

Company name: Microsoft 

Founded: 1975

Location: Redmond, Wash.

Cloud offering: Azure, a Windows-as-a-service platform consisting of the operating system and developer services that can be used to build and enhance Web-hosted applications. Azure is in beta until the second half of 2009.

Why we're watching it: Because this is Microsoft's first big foray into the cloud. But for all of Microsoft's might, it is still a new player in the cloud market and has questions to answer. For example, will it be easy to move existing applications onto the Azure platform, and will Microsoft avoid the tendency toward vendor lock-in – which is bad for users but has been tremendously profitable for Microsoft in the world of packaged software.

CEO: Steve Ballmer, appointed CEO in 2000 after 20 years with the company.

How Microsoft got into cloud computing: Microsoft made its name by developing the operating system for home and work computers. But with all forms of applications moving to the Web-hosted model, it's no surprise Microsoft would make Windows available over the cloud. Microsoft also provides a set of business services over the Web, including Exchange, SharePoint, Office Communications Server, CRM and Live Meeting.

Who uses the service: Software companies Epicor, S3Edge and Micro Focus are among the early customers using Azure to develop cloud apps.

Company name: NetSuite 

Founded: 1998

Location: San Mateo, Calif.

Cloud offering: A business software suite including e-commerce, CRM, accounting and ERP tools.

Why we're watching it: One of the industry's most successful online business software providers, NetSuite has a tendency to make competitive moves that are both entertaining and potentially profitable for customers. NetSuite recently promised 50% discounts to Sage Software customers who switch to NetSuite, and made a similar offer to Salesforce.com and SAP customers last year. NetSuite will even integrate with rivals' technology, for example by connecting its ERP suite to Salesforce's CRM tools, a move designed to lure Salesforce customers by enabling new business processes.

CEO: Zach Nelson, appointed in 2002 after holding executive positions at companies such as Oracle and Sun.

How NetSuite got its start: NetSuite, originally called NetLedger, was founded by Oracle CEO Larry Ellison and NetSuite CTO Evan Goldberg to make Web-based applications for small businesses. NetSuite and Oracle had tight go-to-market partnerships in the company's but Ellison's official influence over the company has diminished since NetSuite went public late in 2007. 

Who uses the service: Thousands of small business and enterprise customers worldwide including Wolfgang Puck Coffee, Wrigleyville Sports and Isuzu.

Company name: Rackspace 

Founded: 1998

Location: San Antonio

Cloud offering: The Rackspace Cloud, also known as "Mosso," consists of three major services: Cloud sites, a platform for building Web sites; Cloud Files, a storage service; and Cloud Servers, an Amazon EC2-like service that provides access to virtualized server instances.

Why we're watching it: Rackspace has a long history of offering hosted data center services and is a trusted name in the enterprise. With Mosso, Rackspace is taking aim at the platform-as-a-service and infrastructure-as-a-service markets, the two key areas for customers looking to build Web-hosted applications.

CEO: Lanham Napier, joined Rackspace as CFO in 2000 and became CEO in 2006.

How Rackspace got into cloud computing: Rackspace has always focused on providing dedicated, rather than shared, data center resources. That is, until a small team in the company said, "There has to be a better way for Web designers to build Web sites rather than getting a dedicated server" that requires extensive management, according to Rackspace CTO John Engates. With a multi-tenant cloud service, Rackspace can offer as-needed access to computing resources for one-off projects. "Cloud looks a lot like our business today, it's just changing how it's sold," Engates says.

Who uses the service: Web developers and software-as-a-service providers such as Zapproved, which uses Mosso to deliver an online productivity tool.

Company name: RightScale 

Founded: 2006

Location: Santa Barbara, Calif.

Cloud offering: The RightScale Platform, software-as-a-service that helps customers manage the IT processes they have outsourced to cloud providers such as Amazon and GoGrid. RightScale helps customers build and clone virtual servers for the cloud, performs load balancing in response to changing needs, automates storage backups, and offers monitoring and error reporting.

Why we're watching it: Because for all of the cloud's promises of simplicity, deploying new virtual servers and applications in the cloud requires work on the part of the IT department, particularly if a customer is using multiple cloud services. RightScale is automating the grunt work required to use the cloud most effectively.

CEO: Michael Crandell, RightScale co-founder who was held executive positions at software-as-a-service companies including eFax and Celebros.

How RightScale got its start: Two of RightScale's three founders come from Citrix Online, including CTO Thorsten von Eicken, who decided that software providers shouldn't be burdened with the enormous task of building and maintaining data centers. Building data centers should be for "other people who have a core competency in that," he says. "I build SaaS services and there's no reason to go out and build a data center again."

Who uses the service: Social networking vendors and other companies that need help managing cloud-based servers, including ShareThis, TagCow, DoInk, and iWidgets.

Company name: Salesforce.com 

Founded: 1999

Location: San Francisco

Cloud offering: Salesforce.com's flagship is a set of CRM tools including salesforce automation, analytics, marketing and social networking tools. A second major offering is Force.com, a platform for building Web applications and hosting them on the Salesforce infrastructure.

Why we're watching it: Salesforce.com helped pioneer the software-as-a-service market, which has now been lumped into the umbrella term "cloud computing." With Force.com, Salesforce is moving beyond SaaS into the platform-as-a-service market, which could revolutionize the way businesses build and deliver applications to end users and customers.

CEO: Marc Benioff, also the founder and chairman of Salesforce.com, spent 13 years at Oracle in a variety of executive, sales and product development roles.

How Salesforce.com got its start: Benioff founded Salesforce.com with the goal of creating an information management service that could replace traditional business software technology, the company says. Initial funding was provided by investors including Oracle CEO Larry Ellison.

Who uses the service: 55,400 customers in many industries including financial services, communications and media, energy, healthcare and retail.

Copyright © 2009 IDG Communications, Inc.

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