Fair Weather Forecasted for Regional Clouds

I think we might be at the very beginning of an interesting new phase in the evolution of cloud computing — regional and local clouds.  Local and regional hosting is nothing new – there have been smaller players operating in the shadows of the big hosting companies for years.  Some of these organizations are resellers of larger data center capacity, while others have their own facilities.  It’s only natural that some of these local hosters may start new cloud initiatives to keep their customers from ending up at Amazon, Rackspace or Unisys.  Some will be successful, while others will fail, but no matter how it turns out – there will be a robust local cloud economy.

I spent some time with Jason Baker and Johnny  Hatch from ReliaCloud last week while I was out in Minnesota.  ReliaCloud is an offshoot of Visi, a St. Paul-based hosting and colocation provider.  Recognizing that the traditional managed hosting and colocation market is being eclipsed by cloud computing, the Visi team decided join the cloud party.  They decided to offer their cloud under a new brand, ReliaCloud, as a way to be more interesting to the market.  Here’s what else I learned:

• The value proposition for a local cloud is strong.  Customers who want to keep tabs on where their applications are running, need to be able to audit their cloud service provider, need custom configurations, or just want the extra comfort of knowing the people who are running the cloud, will find a local cloud to be attractive. In some cases, regulatory issues favor a local cloud as well.  In healthcare or financial services, the fact that you know for sure where your data is at all times is comforting. 
• Building a local cloud is not a huge challenge given the tools available today.  ReliaCloud uses VMOps, a venture-backed cloud stack provider out of Cupertino, CA.  VMOps has a pretty strong solution that allowed ReliaCloud to get up quickly with a minimum of hassle.  Jason and Johnny both said that VMOps was very responsive and delivered on all of their commitments.  Other tools that ReliaCloud evaluated included VMware, Xen Cloud from Citrix, Eucalyptus and others.  They just felt that VMOps was stronger and offered more of what ReliaCloud was looking for.  They really like how VMOps deals with networking and storage, and how robust their HA VMs are (based on Xen this release but with plans for other hypervisors in v2).  ReliaCloud built their own front end for self-service on top of VMOps APIs, though they commented that using what VMOps had out of the box would have saved them a lot of time.  They use the Tucows Platypus billing system, monitor their cloud with Nagios, and their storage is based on OpenSolaris ZFS managing Dell storage shelves (VMOps is adding more enterprise storage options too). 
• A local cloud can have quick success, especially if you already have customers you can turn to.  ReliaCloud has been in beta for a little over 2 months.  During their beta period, ReliaCloud is free and nearly 100 customers have signed up.  In some cases, customers are running live production systems already and getting a lot of the benefits of cloud computing early on.  ReliaCloud is not sitting still either.  They just hosted a joint seminar with enStratus (Minneapolis-based cloud tool provider), are offering free cloud computing to nonprofits (doing good for good PR), and are exploring providing private label cloud services to integrators and other hosters who don’t want to do it themselves.

ReliaCloud is still early in their journey to the cloud, but are already having great success (I happen to know that in December one of the major vCloud-based telco clouds in the U.S. had less than 10 customers using their service).  An analogy I heard recently comes to mind…   Think of the big hosting companies as giant boulders.  They take up a lot of space, but they leave a lot of space between them for rocks, stones, pebbles and sand.  Local and regional clouds are there to fill the empty space, and there are a lot of them.