Three Boston Startups Finalists in Amazon’s $100K Web Services Challenge

11/10/08Follow @wroush

Conditions today in Boston: increasing clouds. Cloud-computing startups, that is.

Out of the seven companies named Friday as finalists in Amazon’s latest AWS Start-Up Challenge—designed to reward the most innovative companies using the cloud-based Amazon Web Services infrastructure to deliver their products or services—three are based right here in the Boston area. (Sorry, Seattle.)

Each of the companies—Watertown, MA-based MedCommons, Waltham, MA-based Pixily, and Dedham, MA-based Sonian—has turned to the Seattle-based e-retail giant for all or part of the computing power, storage, and other services they need to support their own customers. In that sense, they belong to a new breed of startups: nearly virtual ventures whose Web-based services free other companies from having to buy, install, and maintain their own software, but who pass along most of their own computing chores to Amazon.

Using Amazon’s cloud computing infrastructure is a great way for any startup to reduce costs. If you don’t have to spend hundreds of thousands of dollars of your investors’ money buying servers, after all, you can spend more on hiring smart people, or just keep a larger war chest on hand. But the executives I interviewed at the three local Amazon finalists say there are plenty of other reasons to go the cloud-computing route. In fact, it’s likely that these three companies—who will compete in Seattle on November 20 for a $100,000 grand prize—made it to the finals at least in part because they’re putting Amazon’s services to such unique uses, with a variety of benefits for themselves and their customers.

Sonian, for instance, provides business customers with a hosted e-mail archiving system, so that companies trying to comply with Sarbanes-Oxley requirements and other regulations don’t have to worry about manually backing up the data in their corporate e-mail systems from Microsoft, Novell, IBM, Google, or other vendors. The company has never stored any of its customers’ data on its own premises: it all gets shipped off to S3, Amazon’s storage service.

“Some of our investors, back in 2006, were skeptical of our ability to launch this service from the cloud, but we made the right bet,” says Greg Arnette, Sonian’s CTO. “Cloud was the way to go. It’s allowed our company to adopt the same philosophy that Amazon Web Services adopts around the pay-as-you-go model, so you’re not paying for hardware you’re not using. Also, even though we’re a new company in the space, our customers know their data lives on the infrastructure of a well-known, trusted brand.”

Adrian Gropper, chief scientific officer at MedCommons, says working with Amazon also eases fears about scalability. MedCommons allows healthcare consumers to create a central, online storehouse for their medical records; selected caregivers can download or upload records to this storehouse, including big image files like CT and MRI scans. “A lot of people can go into the health-record business and say they have a system that scales to 10,000 patients, but having it scale to a million patients is not … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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