Abiquo, Nasuni get cash; Eucalyptus gets nada

This week's Cloud Cover TV is packed with news. Cloud startups Abiquo and Nasuni get funding while RightScale VP of marketing Betsy Zikakis jumps ship to Soasta. Meanwhile, CloudKick gets snapped up by Rackspace, and Eucalyptus has very few paying customers.

And check out the Cloud Cover TV home page for the rest of the episodes.

Read the full text transcript from this video below. Please note the full transcript is for reference only and may include limited inaccuracies. To suggest a transcript correction, contact editor@searchsecurity.com.   

Abiquo, Nasuni get cash; Eucalyptus gets nada

Jo Maitland: Hello, and welcome to Cloud Cover, our weekly show on all the juiciest
news in the Cloud computing marketplace. My name's Jo Maitland from San

Carl Brooks: And I'm Carl Brooks from Boston.

Jo: So, we're going to lead off this week's show focusing a little bit on
the startup space. There's been a ton of action in the startup market just
around Christmas and through the new year, mostly funding news. Abiquo,
formerly a Spanish company, now based here in the U. S. landed $10 million
in funding. Those guys compete with Eucalyptus. They're in the provisioning
and the management space, and so far though it seems like a very small
number of customers. They have an open source free version, and from what
we can tell most people are using the free version. The CEO over there is
Pete Malcolm, and he sold his last company to CA, so we're curious to see
if that's his game again this time around. But who knows?

Also, in the cloud storage market space, Nasuni based over in
Massachusetts, landed $15 million right before Christmas, too. So those
guys have a virtual NAS appliance that sits in your office and backs up all
that storage to any cloud provider of your choice over the Internet. They
actually home cache local copies on the server at your office, so there's
fast access for data that's used frequently. The interesting thing about
those guys is they have a real market to go after, unlike a lot of other
cloud startups where there isn't really yet a clear use case for some of
these products. Now Nasuni and a bunch of these other companies in the
storage space around cloud services do have a market for back-up and DR or
of storage as a real business.

So that's kind of interesting. Also, I'd say other news in the startup
world, Right Scale, they're the sort of de facto cloud management portal,
lost their VP of Marketing who is Betsy Zikakis to a company called
Zoaster. Zoaster, they're basically an application performance testing in
the cloud company. Apparently though, nothing kind of bad went down with
Betsy. She's actually a really, kind of has a techie background and was
really interested in the performance and testing space in the cloud, which
is super techie, so she's moved over there and apparently right now there's
no replacement coming up behind her as VP of Marketing at Right Scale. Now
they're a really successful company, so it will be interesting to see how
long they want to go without a VP of Marketing forward. Carl, that sort of
segue me into Cloudkick, you know, Right Scale's competitor. What's
happened with them?

Carl Brooks: Oh well, they won the startup lottery as it were. They got bought.
They actually got bought by Rackspace, which was really interesting because
Rackspace, you know, a lot of people use Rackspace Cloud through Right
Scale and Cloudkick is a direct competitor to Right Scale. It's a web
service, you log on, create an account and you can fire up Amazon or
RackSpace or any variety of a number of different cloud providers right
there through the portal. Rackspace says that Cloudkick customers aren't,
who may not be using Rackspace at all, who may be using Amazon or GoGrid or
any of those others, they're going to be just fine the way it is, but
they're actually going to start rolling the Cloudkick technology into the
Rackspace Cloud, so some of the things that they do are actually going to
look at lot more like the Cloudkick experience is kind of come to the
Rackspace Cloud directly which is interesting. But are they now competing
with Right Scale? It's hard to tell.

Jo Maitland: Yeah, well what's going to happen to Right Scale users on Rackspace?
Will they still support them or will they make those guys use the Cloudkick

Carl Brooks: Oh yeah, no. They say they'll still support them, because
fundamentally when you're using Rackspace Cloud or any other true cloud
service, you don't need any of the interface stuff. All you need is the
API. So unless Rackspace suddenly makes a change to the API that Right
Scale can't support which is pretty unlikely or somehow decides to cut them
off completely which would be incredibly predatory, I can't see them doing
it at all, I don't think it's going to make any difference, which, again,
interesting thing about cloud computing is that there's these clear-cut
boundaries between who's competing with whom are really kind of going away
or, at least, they're changing in ways we don't fully understand yet.

Jo Maitland: Yeah, yeah absolutely. And so, obviously another big name in the
startup space. Any action going on with Eucalyptus? I know that they have a
few companies testing the software. Again, it's unclear how many people are
actually using the paid version versus the free version, but what's
happening over there? Any update?

Carl Brooks: Oh yeah, totally. If you go to Eucalyptus, they'll tell you they've
got umteen million downloads and a 15,000 user install base. That's
probably 14,500 people testing Eucalyptus or seeing what it can do or
possibly they installed it and left it on a server somewhere. They don't
have a massive customer base. They do have some fairly large, paying
customers, telecoms are experimenting with this, Eli Lilly I think, was a
famous early user. I talked to Rich Wolski last year, end of the year,
about somewhere in the fall and he actually expressed to me that they had
moved all the way through kind of the development and the research and the
product's launch stage, and they were basically now in full production
support which is good and bad. It means that they're running a business and
they're selling software at the same time. It means they might be moving
past that sweet spot to get acquired which is really, I think, what their
major goal was.

Jo Maitland: Yeah.

Carl Brooks: So they kind of have to keep moving towards that target of getting
bought, or they have to basically take a pretty niche product and make it
into a successful business.

Jo Maitland: Yeah, it's interesting with these startups in terms of valuations and
what they're prepared to, what they think they're worth, you know? We heard
from a VC close to Right Scale that the company's doing about $8 million in
sales with a valuation currently of $150 million, and we know that there
are several companies that have come after them to buy them, and they're
just not even remotely interested at that price. So, it's obviously, with
not even $10 million in sales this company clearly has sort of a high
opinion of itself. And I imagine with Martin Mickos at the helm at
Eucalyptus they're probably of the same position.

Carl Brooks: For sure.

Jo Maitland: Yeah. So, hey listen, switching gears a little bit to the big guys.
What's new? There's been more action with the Microsoft, Google office
productivity in the cloud craziness. What's new on that front?

Carl Brooks: Oh sure, yeah. Well, we've had a nice development this week. Last,
before the end of the year, actually back in the fall, Microsoft announced
that they had won a massive, 100,000 user contract with the Department of
Interior for the U. S. Google complained and said that they had been shut
out of the bid process. Google actually just got an injunction from a
federal judge saying Microsoft did basically compete unfairly and it turns
out, here's the juicy part, an assistant secretary to the Department of the
Interior for the U. S. basically went out on his bid and declared that
BPOS, Microsoft's business process, outsourcing, whatever thing, was the
standard for the federal government, like you literally, like if you want
to compete on a bid, you had to use BPOS, which is not how these things
usually work. So it's going to be fun to see what happens next. Google's
got a stay on it in federal court and next comes a lawsuit or probably
negotiations and we'll see how it goes, but it's definitely juicy.

Jo Maitland: But isn't it smart for a large organization to standardize on a
particular service rather than different departments, within the government
especially, some signing up for Google, some signing up for some startup
suite, some signing up for IBM, some signing up for Microsoft? Like, surely
they would want to standardize? What would be wrong with standardizing on
Microsoft BPOS?

Carl Brooks: Well, the thing is usually you standardize on a requirement, what you
need, not on the delivery platform or how you get it. This is like saying
"We have to use, everyone in the government has to use Ford cars, not
because they're the right price but because they're Ford". It's sort of a
back handed way to approach how these things go.
An alternate way would be to say, not to say "We need to specify BPOS" but
to specify "We need online office services that can be cached locally or
with an option of running locally versus online", something that would
probably, might possibly let Google compete in this. But to actually say
"The vendor is the standard" is a little weird, and I'm not sure how they
arrived at that, but that's where it stands now.

Jo Maitland: Wow.

Carl Brooks: So it definitely makes sense to standardize on what you want and what
you need, for sure.

Jo Maitland: Yeah. So for now, then basically the whole thing is stalled. The
contract, the bid and everything is stalled. Google successfully brought
this injunction.

Carl Brooks: Yep, yep. Everything's on hold.

Jo Maitland: Wow, that's amazing. So hey...

Carl Brooks: It's 100,000 users. I mean, they're not without e-mail right now.
They're using whatever horrible collection of old junk that they've been
using, but the plans go forward and all the money they were going to spend
is up the air.

Jo Maitland: Wow. So talking of big companies, actually I just saw some news this
morning, I don't know if you saw, apparently Amazon Web Services has
introduced, well, has updated its service levels and the bronze, silver,
gold aspects of its service levels, they introduced a platinum level which
actually now lets you have a team of AWS service people at your beck and
call should there be a technical hitch or something. So, it struck me. I
didn't see all the details. They've reduced the pricing on some of the
services, but it struck me that they're actually paying attention to the
requests that they do need to be more proactive in managing service levels
and managing customer expectations around just them being available to
answer calls and stuff like that.

Carl Brooks: Oh, definitely. It's something they've been dinged [SP] for for ages
now, and there were complaints you could buy Amazon's gold package and
still basically all you got was e-mail response or maybe phone response and
even that was far from adequate from some of the complaints you can read on
the forums and other places. I understand they've dropped some of their
tiered pricing as much as 50%.

Jo Maitland: Wow.

Carl Brooks: But then this new tier they're introducing, you get, supposedly a
dedicated team of responders. What that means is you get live people who
have a collection of customers that they're expected to support, and this
is fairly standard for any managed service provider, any hoster, so it's
interesting to see them coming back and sort of backing into the same
models that hosters have been offering for years now, things that they've
already worked out that customers want. It's definitely a significant sign
that Amazon is learning how to listen to the enterprise IT audience as it

Jo Maitland: Hooray, finally.

Carl Brooks: Yeah.

Jo Maitland: Yeah.

Carl Brooks: Good job.

Jo Maitland: So, just like sort of finish it off here, what about cloud field trips?
Anything coming up in Boston that you want to attend?

Carl Brooks: Oh yeah. I'm going to, well, I should say the A) Oracle Enterprise
Cloud Summit February 2nd. That should be fun. This is one of Oracle's
traveling road shows that go all around the world and put on some variation
of a pitch, but they're pretty enthusiastic about cloud for a company that
a year ago was claiming it didn't exist or had never existed or always
existed or something, but now it's 100% cloud, and, of course, the pitch is
all about how to architect it and the new Exologic Cloud in a box things
that Oracle's pitching. So, it should be fun. I'm advising everyone who
goes to bring a two-wheel dolly because I understand that you will be
getting an Exologic as a free souvenir.

Jo Maitland: Oh my God, yeah. Bring your checkbooks, right?

Carl Brooks: Yeah, that too.

Jo Maitland: The expensive cloud, yeah. So that's February. Actually mid-February,
well, February 14th, interestingly Valentine's Day, the RSA Company, the
security company owned by EMC actually launches their RSA Conference. It's
one of the big security conferences that happens every year. They'll be
tens of thousands of people out here in San Francisco for it. The Cloud
Security Alliance has a half-day seminar at this show and given how much
everybody loves to talk about cloud security, maybe Valentines Day is a
good day to launch that show.

So, on that front, this has been Cloud Cover. Thank you very much for
watching and look forward to tuning in again next week on all the juiciest
news in the cloud computing market. Thanks. Bye.

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