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SMBs want managed services with a touch of cloud computing

Some smaller IT shops appreciate the hands-on approach of managed hosting versus do-it-yourself clouds, and they don't seem to be pressing for more.

IT shops, slow to look to anonymous and opaque self-service clouds like Amazon Web Services (AWS) or Rackspace, are finding hosting providers that bridge the gap between high-touch managed services and do-it-yourself clouds.

P&R Dental sells X-ray image systems to dentists and processes claims reviews for insurance providers across the country. The small firm mixes in-house hardware with virtual machine deployment at iland. Shaju Puthussery, vice president of engineering at P&R Dental, says that virtualized hosting in the cloud isn't cheaper to operate, but it means he doesn't need to invest capital in uncertainties.

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"We have no idea when sales will come to fruition, so instead of backing storage [investments], we can scale automatically when that happens," he said.

He said a sale of P&R's claim review service usually means spinning up another server with iland, something he accomplishes with a phone call. He prefers the human interaction.

"Sometimes you just want to speak with a human being," he said.

Puthussery added that there are no technical reasons P&R can't use something like Amazon Web Services and provision its own servers, but that's a level he doesn't want to go to. He'd rather manage the system architecture and design and let iland do everything else. Puthussery's already done the legwork to make sure the hosting provider can stand up to security and availability needs. Part of P&R's platform involves its own monitoring and management tools, which extend into its virtual machine footprint on iland and are crucial to P&R's IT business.

Security and the cloud
"We do monitor our service very aggressively, because we're in healthcare, Puthussery said. "Security is a primary concern because of patient data files."

Not only does P&R fall under HIPAA regulations, but its customers aren't shy, either.

"Whenever new customers come on board, they're really interested in our infrastructure," he said. So interested, in fact, that the insurance giants who use P&R's claim review services conduct their own security and IT audits, independent of anything P&R or iland might have to say about it.

P&R expects its IT infrastructure to grow 20 to 30% this year. Puthussery said that using iland's computing services means that additional IT dollars only go into generating revenue and not towards overhead.

I prefer a shallower pool to swim in. I wouldn't even know how to find a phone number for someone at Amazon.
Jason Thayer, CTO of Wintensive,

Over the long term, Puthussery believes that excessive growth of infrastructure in the cloud would be more expensive than running it in-house. For now, iland adds up favorably. "We did our homework before the move," he said.

Others users prefer managed hosting over cloud
Jason Thayer, CTO of Wintensive, sells data backup and data management as a service and is hosted with StrataScale for many of the same reasons. For him, it was largely about credibility and accountability.

"What it means to me is that, if I have to go up in front of people and explain what happened, I want to be able to point to best practices," he said, noting StrataScale's up-to-date hosting environment and laundry list of certifications for data storage and disaster recovery.

He also says that customers appreciate the bling: He can have them tour StrataScale's data center, part of RagingWire in Sacramento.

"There's a wow factor. You can take people and show them [the data center]," he said, and point to the server that a customer's data is hosted on.

That's a valuable differentiator for Thayer, and not exactly run of the mill for Amazon Web Services. AWS does offer SAS 70 II compliance in its data centers, along with having a guide to living up to HIPAA on its cloud, but it's still too far away for Thayer.

"I prefer a shallower pool to swim in. I wouldn't even know how to find a phone number for someone at Amazon," he said.

Like Puthussery, he wasn't thrilled about the price, but new features from StrataScale kept him going.

"When we first went to talk to them, I was like, 'That's not great, but it's manageable.' We can work with that," he said. "Their 'hybrid cloud' solution is unrivaled, as far as I'm concerned. Those are physical servers you can deploy in a Web browser. I can't imagine how many clients we can put on that before we need more."

Managed hosters becoming true clouds?
StrataScale just launched its own version of a self-service cloud, with a Web management portal and on-demand servers, virtual and physical, that start at $49 per month and jump up to $299. The company says it's seen the interest and the success of Amazon and Rackspace but wants to tackle the market for expensive clouds.

"We're in a tier-4 data center; that means something," said Dave Geada, VP of marketing for StrataScale.

Geada said StrataScale's Xen virtualization environment is best of breed, with Multi-NIC support for virtual machines and Web management tools. It doesn't have an API, although Geada says that's on the roadmap, and neither does iland. Iland is VMware-based, however, and a VMware Premier Service Provider, which could mean integration into vCloud Express, VMware's self-service public cloud program.

A vCloud Express partnership for iland and an API for StrataScale would push either provider over into true cloud environments. But for now, users seem to appreciate the blurring of the lines between managed hosting and cloud provider and aren't looking for anything more.

Carl Brooks is the Technology Writer at Contact him at

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