Joyent CEO pokes holes in Amazon's cloud

In this week's episode of Cloud Cover TV, the CEO and co-founder of Joyent drops by the studio to discuss his company's battle for public cloud supremacy with Amazon Web Services.

We discuss:

  • Comparing Joyent's and Amazon's public cloud performance levels
  • Dell's success reselling Joyent's cloud platform software
  • Node.js, Joyent's open source JavaScript development environment
  • Any discussions between HP and Joyent?
  • Cloud Foundry and the Platform as a Service market
  • Can VMware handle running a public service?
  • Is the cloud market in Asia different than in America?

Read the full transcript from this video below:

Joyent CEO pokes holes in Amazon's cloud

Jo Maitland: Hello, and welcome to Cloud Cover TV, our weekly
show on all the juiciest news in the cloud computing market. I am
Jo Maitland, in San Francisco, and this week I have David Young
with me, who is the co-founder and CEO of Joyent. Welcome to the
show, David.

David Young: Very happy to be here.

Jo Maitland: So, Joyent is in a couple of different markets. You
guys run a public cloud . . .

David Young: That is right.

Jo Maitland: … that would compete with Amazon EC2. You run Node.js,
which is platform as a service that would be akin to Microsoft Azure,
and you also wrap up your software that runs your own cloud and sell that
to companies that want to build their own private clouds. Of these three
business, I am curious which one is the most profitable, which one is
basically paying the bills for you guys?

David Young: We do not disclose numbers, we are a private company,
but I will tell you that we have been in the public cloud business the longest.
When my co-founder, Jason Hoffman, and I wrote the first version of what
we now call Smart Data Center, we went to a number of service providers
locally and said, "Hey, we have built this cloud platform’, we didn't call it a
cloud platform back then, this was 2004. We had built this software that
allows you to deliver a full data center to your customers as a service, and
no one knew what that meant, no one knew why they would want to have
that software platform. Being a bootstrap startup, we had to have some
money to feed our families, so we opened up a service. We were actually
one of the first clouds that was available publicly.

Jo Maitland: What year was that?

David Young: 2005.

Jo Maitland: A year before AWS.

David Young: Exactly. So we started before AWS, and that was a
happy mistake, if you will, because we made a lot of mistakes as a
public cloud. We had the Vietnamese show up trying to take over
everything. We tried different types of storage products in the cloud,
we found out what worked, what didn’t. We began to learn things
about the proper ratios of cores to CPU, to memory, to disk, and that
really baked back into our software product.

The software product was really started when we signed our first OEM
deal with Dell last year, in 2010, and we have been selling the product
with Dell, then, of course, we sell it directly to others that want to stand
up clouds as well. That is a new line of business, as you say, but we have
some very successful wins this past quarter. Orascom, which is the
sixth largest teleco in the world, is now using our software for their own
cloud. We have a number of firms in Japan that will be announcing
their own clouds based on joint software. It is really a compelling story
for service providers that want to stand up their own clouds, because we
have been doing it ourselves for all these years, so we have lots of experience,
in addition to a very rich technology stack that they can adopt and stand up the
cloud for their own customers.

Jo Maitland: Where does this intersect with Node.js? Just explain in a
sentence what Node.js is and how that intersects with these other two things.

David Young: A sentence . . . Node is a somewhat difficult thing to say,
but I always say that Node.js is like saying that the iPhone is as powerful
as a mainframe was in the 70's. What Node basically does is it allows you to,
if you write your applications in Node, get just amazing performance out of
very little computer resources. Ultimately, what Joyent and what any other
cloud company is doing is we are really disrupting the data center business.
People are used to building these large data centers to deliver compute
services out to clients, and what is fundamentally happening here, is with
Joyent's Smart Data Center is we make that data center so much more efficient,
because the first thing is we eliminate the operating system from the customer’s
stack. With Node, we go even a step further and we say, "OK. If you write your
application in server-side JavaScript,’ which is what Node is, but it is also
asynchronous, it is non-blocking. So the number of, the amount of performance
you can get out of a Node application is just really outstanding.

Jo Maitland: Right. You guys make a big deal about the performance
versus AWS.

David Young: Let me give you a concrete. We are working with a larger
teleco here in the United Stated, and they are putting into place some
geolocation software for their handsets, similar stuff that we have heard
about with the iPhone recently; they all track customers, everyone tracks
customers, it is just a way for them to figure out how many cell towers they
need and the capacity. They had a Java application that we were able to run
on our smart data center and track 20,000 customers with a single server.
We rewrote that application using Node, and on the same server we were
able to track 700,000 customers. As they build up the data center, this comes
down to a very stark economic difference. Using the Java application, they
would have to spend over $160 million to build up a data center to power this
application; with Node, they spend $4 million.

Jo Maitland: Right.

David Young: Writing your software in Node is a huge benefit for these
customers, the running on top of what is Joyent's cloud stack provides
that extra amount of efficiency.

Jo Maitland: Amazon started in 2006, you guys were a year ahead of them,
in 2005. They have something like 60% plus market share, depending on
whose data you realize. Perhaps people are not so bothered about performance,
perhaps the issue is price or there are other factors. I mean these guys are clearly
marketing . . .

David Young: I would like to say about Amazon, and first of all, you are
absolutely right, they have really done a fantastic job evangelizing the market
about outsource cloud services. At Joyent, we feel very strongly that it
needs to be said in the boldest colors, black and white, that we really think a
lot of their architectural decisions are flawed, and we have written quite a
bit about this on our blog at I really think of them as, whether
they are the Atari of the cloud, the first mover, but I think a lot of their
architecture is not going to allow them to service the sorts of customers that
are coming, what we call the data intensive real-time applications that are
coming to the cloud.

We saw this with their recent four-day outage, with EBS, where they
have a centralized storage service that has central points of failure. I
understand the architecture because at Joyent, we actually used to have
this as part of our cloud solution ourselves, but we are trying to deliver a
level of service that is enterprise-grade and I am very comfortable with our
position in the market, long term, both as a public cloud as well as selling
software to service providers that are also trying to sell to their customers.

Jo Maitland: Amazon basically said, ‘Look at some of these customers
that have configured EBS and their application on top of EBS and EC2.
It is multi-region and that is how you get redundancy. These availability
zones are basically clusters inside of a single building, and that you need
to be multi-region.’

David Young: Yes, and that is all true. The thing is EBS was a single point
of failure, so if you used EBS, EBS went down, and it had a control panel
that was overwhelmed. I am speaking from the Amazon explanation now.

Jo Maitland: Yes, yes.

David Young: Even if you were multi-region, if EBS was part of your architecture
in any way, you were down. Note, the customers that were not down, the Netflix
of the world, the SmugMug's of the world, did not use EBS. Any customer that
was using EBS, was down; that is the first thing. The second thing is, I think it is
very telling, and I think people have to ask Amazon this question, ‘Was
down?’ No. Does use Amazon web services? And if not, why not?

Jo Maitland: Quite. Back to Joyent. You guys operate your public cloud,
you sell the software that runs your cloud to other customers.

David Young: That is right.

Jo Maitland: Some people might say, ‘Is that a concession that public
clouds are going to be operated by giants, and a smaller company like Joyent is . . .’

David Young: I think it is very difficult for a company like Joyent to
compete with an Amazon, a large teleco, or service provider, from a
capital standpoint. We just do not have the capital, and it is going to be
very challenging for us to raise the capital to build billion dollar data centers;
that is the first point. The second point is, I think, long term, the people that
will win in the cloud are those that offered managed services, not every
application should be in the cloud. If you have a data center, where you are
offering both managed services and cloud solutions, then you do not have
the latency of going over the public internet for your applications; I think
those are the winners. I really admire what Rackspace has been able to do,
I think companies like Rackspace, Savvis, Terremark, the KDDIs of the world,
the telecos, I think they are going to be unusually advantaged as we move
forward in the cloud. Remember, our strategy was always to sell software.
We had a service, we have learned a lot from running that service, but
Joyent has always been a software company, and we are now reemerging,
predominantly, as a software company.

Jo Maitland: Right now Dell is a reseller. Is HP a potential partner here? HP is a . . .

David Young: We have some very large partners that we cannot
announce today, but we have made significant strides in continuing
to develop our partner network. I think, again, the reason that they like
working with us versus some of the other cloud providers, is we have
this history of actually operation a cloud. The software is not simply a
hypothesis of what it should be to run a multi-tenant cloud, it actually
has a lot of history behind it. And a lot of errors that we made that we fixed,
and that we have made changes in the software itself.

Jo Maitland: Going back to Node.js. Talk a little bit about how the platform as
a service market is shaping up in your mind. VMware has just entered
with Cloud Foundry; I am curious to get your thoughts on that. They had
outages in the last couple of weeks.

David Young: Of course, we are collaborating with VMware on
their Cloud Foundry offering. One of the pieces of the Cloud Foundry
offering is Node.js, so we are working very much with VMware on that offer,
and I think it is a very competitive offering; it will be a competitive offering.
I think, long term, over time, you see in the market that we will be moving away
from infrastructure as a service towards platform as a service. With the
vast majority of applications today being written in Java, PHP, Ruby on Rails,
or Node.js, there is no dependency on an operating system. It is not like
10 or 15 years ago, when I went to write my application, I compiled in some
libraries from the Win32 API, or other sorts of things like that. It is really
dependent on what we call the web stack, consequently, the operating
system is really dead for customers.

It is very important for operators, people running clouds, but customers
simply need a platform, whether it is a Java platform or PHP platform.
I think the long term secular trends are towards platform, and that is why
we are investing so heavily in our Node offering, which is a platform,
but really focusing on a language that everyone knows, which is JavaScript.
Everyone has used JavaScript in the browser, so we really take the non-blocking
characteristics of JavaScript that people have used in the browser, and bring that
over to the server side, so that people can use JavaScript to write server-side
applications as well.

Jo Maitland: Cloud Foundry had two outages last week. Did that mean
Node.js was down, as well, or . . .

David Young: I am not familiar with those outages, so I would not feel
comfortable commenting, but I cannot see how the language would be
responsible for the outage. Node is really just a runtime, and you can
consume Node from us on our service, which is free to developers.
You can get it on WebOS, which is now part of the HP Palm offering, so it is
integrated in WebOS. You can run it on Ubuntu, there are a lot of different platforms,
and we are working with other vendors to get it on to their clients and other
server platforms, as well.

Jo Maitland: OK. I see where it fits in the picture here, now. I am curious,
though, VMware's Cloud Foundry has these outages; VMware is not a service
provider. Increasingly, we are seeing these kinds of companies, traditionally
software companies, or even hardware companies, EMC tried to get into the
services game with Atmos. Symantec is trying again.

David Young: Mozy.

Jo Maitland: Mozy, at a smaller scale for small business and for backup,
which is fairly straightforward. Symantec is trying, second time around,
with cloud services. I am curious if these companies, that it is not their legacy,
being service providers. They sell shrink wrapped software that they can
make this transition.

David Young: It is a very different business; I can tell you from experience,
delivering a service than delivering software. Joyent, in that respect,
is somewhat unique, in the sense that we actually have been successful
and we have one of the leading public clouds, but we also sell software
to customers.

Jo Maitland: It is curious that your strategy is that the future of your business
is in the software. Then there are companies like VMware that are trying to switch
to the service provider market.

David Young: Is it not interesting, Jo, that the cloud has really been a solvent that
has dissolved all these old alliances. What I mean by that is you are absolutely
right. The VMwares of the world, the Ciscos of the world, everyone
used to know their place; I am a arms dealer. I am . . . and everyone
is getting into everyone's business, so it is a very exciting time, it is
going to be very interesting to see how things sort themselves out.
As you know, HP has announced that they are coming out with some
services, so it will be very interesting to see how things sort out.

Jo Maitland: Can you see them partnering with Joyent, for services?

David Young: Absolutely, but let us also not forget a very interesting
group of players, which are the ODMs in Taiwan and China. Here
we see where the HPs of the world, the Dells, the Cisco’s believe
that they want to deliver servers and services to customers, and
what we are seeing in Asia is the ODMs in the Taiwanese market
and the Chinese market saying, ‘Why should we just build the
components and let you slap your label on top of it and make all
the money?’ I think that level of knowing your place in the market
is also dissolving, and you saw that with the Facebook announcement,
they worked with a company called Mytauk  in Taiwan, to build
that open data center concept. Joyent also has a strategic alliance
with Mytauk, so it is going to be a very interesting couple of years.

Jo Maitland: So they are a systems integrator, right?

David Young: No, they build servers. They are the folks that build
the iPhones and, not Mytauk in particular, but my point here is
that where people are in the stack, where they are up the stack, as a
software company or a hardware company, is very, very confusing.
At Joyent, we actually have hardware patents around, and we need to
be able to operate up and down the stack as a company, and have
partnership all over because it is really not clear where
things are going to fall out.

Jo Maitland: Is the exit for you guys, like, an HP deal, or who knows a
service provider may, in the same way that the service providers have
bought Savvis and Terremark, is that the goal here? Where do you
see the future?

David Young: I have done a lot of startups, exit is one of the few things
that I do not think about, with regard to the startup. Obviously, we are
here to make money for our shareholders, and some sort of exit is
required for that, but really, at Joyent, we try and focus on doing the
right thing for our customers. I am not trying to avoid the question, it
is just that focusing on that, I think, causes a company to do unnatural
acts, with regards to building your business. We just try and build our
business, make sure our customers are happy. It is just fun to be part
of the disruption of a whole industry. It is very rare that you get to be
part of a startup that you are actually . . . as Jason and I like to say,
we are 90% IBM; that is a very interesting place to be.

Jo Maitland: Great. Thank you very much, David.

David Young: Thank you. This was very, very fun.

Jo Maitland: This has been Cloud Cover TV. Thank you for watching,
and tune in next week for more insider news on the cloud computing market.


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