I spoke to Bert Armijo from utility computing platform developer 3Tera this week, mostly for a feature to be published next week. But some interesting things came up that aren't perfectly suited to the regular feature, and I wanted to get them up via the blog.
A bit of preamble: 3Tera's business model isn't totally typical of a supplier to Web hosts. It's not dependent on a standard licensing fee, and it's a piece of equipment at a set price. 3Tera's income is based on the amount of resources being deployed under its AppLogic platform. And its involvement in the distribution of the service is integral enough that the word "partner" is actually, in this case, a very accurate description of the relationship between Web host and vendor.
So, while 3Tera's goal is certainly to distribute AppLogic-based utility computing to the largest number of end users possible, that doesn't necessarily mean distributing it via the largest number of Web hosts possible. In fact, says Armijo, the company is most interested, as of this moment, in working with a relatively small number of partners, and focusing on making them as successful as possible.
The result of all this is that 3Tera's major objective is not to sell Web hosting providers on the value of the utility computing model; its objective is to sell end users, would-be colocation customers, on the potential of the utility model in general, and the AppLogic platform in particular.
Preamble complete.
Armijo is excited about the growth 3Tera is seeing in the audience for utility computing services:
"Last quarter we saw more than 100 percent growth in the number of customers using virtual private data centers. So it was a very successful quarter. And we're seeing that growth continue into this quarter.
"We're seeing a pattern of users that basically are those folks that we had been targeting since the middle of last year. SaaS and Web 2.0 providers, primarily. And a few of them are kind of prototypical of the business drivers that we've been talking about for a while."
Interestingly, he says that a big part of the interest can be attributed to Amazon's Elastic Compute Cloud service - the very large Amazon brand making the case for utility computing in a way and on a scale that is simply beyond the means of the comparatively tiny 3Tera.
"To be quite honest, the guys at Amazon did us an enormous favor in launching last year because their visibility has really pushed forward people thinking about utility computing. And in the research people do before they sign up a lot of them do find us, and our partners. So it has really helped us to start the conversation with a lot of companies that otherwise might have pushed back a little bit."
[Case in point: while writing this, I Googled "Amazon EC2," and was met, among other things, by a sponsored link to 3Tera's site that asked if I was "waiting for EC2."]
Amazon, says Armijo, is not a company that 3Tera considers a competitor. This is because Amazon's role in utility computing is as the distributor of a service, whereas 3Tera is the developer of an underlying technology. Conceivably, Amazon is a company that 3Tera would consider a possible customer. However, 3Tera's partners undoubtedly consider Amazon a competitor at this point.
But he says the services do deliver two very different varieties of value.
"The two systems are different enough that there's very seldom any difficulty positioning and getting customers to understand the value proposition of the two. AppLogic is all about systems. It's all about large-scale infrastructure that you can actually provision load balancers and VPNs and firewalls and things that don't make a whole lot of sense in the Amazon Web services environment. On the other hand, Amazon is all about resources by the hour, and if what you want to do is fire up a lot of virtual machines, you can do that in a very quick, easy way."
The point being that Amazon, with its very audible trumpeting of the model, is doing a considerable share of the work with regard to 3Tera's objective of selling the idea of utility computing to potential customers.
We have just released a beta of our new utility computing platform, which in some ways is a competitor to EC2. Numerous people have asked us if we are concerned about Amazon competing with us (being a $25 Billion company after all), and we're not at all. They are powerful competition but they are doing wonders for helping the utility model develop.
Tony.
The question is, for enterprises that don't (or can't) use the "cloud", how will they shift to the "utility computing" model? Cassatt is another player that's making "compute clouds" essentially out of assets that enterprises already own.