Like any 24-year-old tech company, Florida cloud hosting firm Atlantic.Net has been through several changes over the years to keep up with changing market demands.
The company started in dial-up, entered the data center space in 2002, and built its own cloud platform in 2011. Now Atlantic.Net offers cloud hosting, dedicated servers, and HIPAA compliant hosting to a range of small and mid-sized businesses from data centers in Orlando, San Francisco, Dallas, New York, Toronto, and London.
“When we started there was really no OpenStack or CloudStack, we had to do everything ourselves,” Atlantic.Net founder and CEO Marty Puranik said, including building its own billing system that was equipped for the on-demand nature of cloud computing.
“Prior to this product most people paid on a monthly basis on a fixed rate so we had a commercial billing system. We had to come up with our own billing interface where we would track the time and cost per hour…actually being able to bill people on demand,” he said.
In a conversation with The WHIR, Puranik recounts the early years of cloud in the post 2008 economy, where customers wanted to go from CapEx to everything being OpEx.
“One of the big things was people didn’t want to get stuck in long term leases that they may or may not need,” he said.
Now the biggest change that Puranik has seen is the move away from a so-called one-size-fits-all approach to cloud computing.
“There are more options in the space and it’s becoming less monolithic where every cloud has kind of a different shape or feature, it’s not just one size fits all,” he said. “Pricing models vary quite a bit.”
While Amazon Web Services is growing at a remarkable rate, its margins are down because of increasing pricing pressures from competitors like Google and Microsoft, Puranik said. Indeed, there’s mounting pressure from all sides, with Google claiming some big cloud wins with enterprise clients like Snap, and Oracle trying to move more of its customers onto its cloud, he said.
On the hosting side of the market, there is still likely more consolidation to come. “Traditionally you see consolidation when the growth rates go down,” he said. “I think you will see consolidation but we’re still at a fast growth clip.”
“[Consolidation is] still several years away, I think right now it’s kind of land grab…everybody is trying to capture their market share while it’s cheap. Then there will be the horse trading that still goes on once everyone has settled down,” he said.
The evolution of the market will inevitably leave some hosting providers who are unwilling to change in the dust; “I don’t really see consolidation unless your business model isn’t working, today, or if you have a legacy business model that doesn’t fit in to today’s environment,” he said.
One of the tangible examples of this shift is Rackspace who went private in November 2016 after trading on the public market for 8 years – not consolidation, of course, but a recognition that to compete in the current cloud landscape, constantly evaluating business models and product offerings is necessary, he said.
When Puranik looks at the next several years, he sees a huge opportunity in emerging industries outside of the U.S., an opportunity which hosting providers like GoDaddy are already going after.
“I think there’s quite a bit of growth in the U.S. but obviously when you look at the GDP of frontier markets like Africa, they are growing faster than more of the developed markets today,” he said.
With the proliferation of smartphones across the globe comes investments in the back-end and cloud required to run all of it, Puranik said. Of course, with this infrastructure come new security concerns.
“When you think about these new threats, you’re creating new technologies but at the same time you have to think about how these technologies are being abused or used in a way that it wasn’t intended,” he said. “There’s a balancing act – your customers want something today but you want to make sure it is something that has integrity.”
This integrity is something that Atlantic.Net has worked to maintain in its 24 years in business as it continues to capture SMB customers that care about price and performance, but at the end of the day want to know that Atlantic.Net is here to stay, and that if there is a problem, someone is available around the clock to fix it, Puranik said.
Editor’s Note: A previous version of this article misstated that Atlantic.Net launched entered the data center space in 2008. Also, its cloud platform was not folded as previously stated, but the high-speed internet and phone offerings launched at that time were discontinued.