Hosting Companies Repackaging Themselves as Cloud Services Providers

The cloud is a hot concept with a great deal of promise. It is attracting substantial amounts of funding and attention, inspiring innovation and entrepreneurial activity.

For companies that already have a hosting infrastructure, it might seem to offer some potentially low hanging opportunities.

Once they have decided to capitalize on the cloud, these companies inevitably find themselves asking how to best do so. Their questions center around two main issues:

‘What Cloud Services should they offer?’ and ‘How should they market them?’

Generally speaking, the objective is for companies to leverage their existing infrastructure, expertise and customer base. Therefor it is best to offer services that can be supported by that infrastructure, by those experts and would be appealing to that audience.

The reality is that this turns out to be a tall order. Existing infrastructure is rarely if ever entirely suited to cloud scale storage and compute demands. Incumbent IT staff often assume that existing hardware and systems can be scaled – this ultimately proves less realistic than anticipated.

Furthermore, telcos or hosting companies generally lack the in house expertise necessary to productize and market cloud services.

Broadly speaking the services suited to these enterprises and their customers are: Email Services & Contact Management, Storage as a service, Web Site Building Applications and perhaps for those with a strong B2B market: Collaboration Tools or Customer Relationship Management.

Where to begin:

Email services are often part of a telco or hosting company’s existing portfolio of products.  Thus it is here that the cloud services repositioning generally begins.

Whether they are using Zimbra, Open Wave or Open Xchange, their first foray into cloud scale services, generally starts with a storage infrastructure upgrade.

Email services produce a great deal of unstructured data that needs to be stored in a highly secure and accessible form. As it turns out email is actually one of the most technically demanding web based applications that these companies will need to accommodate.  It requires tremendous cost efficiency and massive scalability; (capacity requirements generally grow at an alarming rate).

The good news is that once a company has really solved this problem, the unstructured data storage for the other products and services should, more or less be solved also.

In fact it is not uncommon for a telco to decide to offer other cloud services only after upgrading the unstructured data storage for their email services.

At this time there is really only one unstructured data storage solution that meets all of the requirements of large scale email service providers. RING storage is actually broader than an email storage solution; it’s more a storage framework. The RING software meets and exceeds the demands of email services by being:

Uniquely scale-able.

There are other unstructured storage solutions which are scalable but generally speaking most of them have prescribed upper limits to their capacity. RING has a lower limit, but no upper limit, making it well suited to large scale providers.

Cost Efficient.

Total Cost of Ownership or TCO is an important metric for this industry. It is comprised of a multitude of elements including hardware, maintenance, power and cooling bills, backup software, administrative overhead etc.  Because most storage systems lock you into a single brand and model of hardware, the cost of hardware refresh and maintenance, inevitably increases over time. In addition to this the complexity of the system generally increases, as capacity is increased, raising the cost of management and training, and increasing the risk of errors and failures. Suffice to say that RING generally reduces TCO by 50% or more due to a combination of factors including the elimination of vendor and model lock-ins, the simplification of management and admin, the elimination of backup software and disaster recovery needs.

Performant.

There are other unstructured data storage solutions which offer high IOPs, however none of them combine it with both scalability and cost efficiency.

RING storage provides the underlying framework for a Telco or a Hosting company to build a cloud services product portfolio. In addition they offer an interesting array of partner applications that could be configured to delivery many of the services listed above. The only thing they don’t offer is marketing consultants to help their customers with their strategic positioning and marketing plans.

Monique Shefer is a technology analyst and strategic consultant to the software and software as service industries. Shefer is currently working for Scality – Storage System Pioneer and developer of RING Organic Storage.