Should Cloud Computing Startups Beware Amazon’s Virtual Private Cloud? No, Says Cloudswitch

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set up isolated areas within Amazon’s Elastic Compute Cloud (EC2) on the fly, connect to those resources securely over an encrypted virtual private network, and run software on EC2 “as if these assets were running within their existing IT infrastructure,” in the company’s words. The company says the system is already being used by clients like Eli Lilly and Intuit.

I think I can be forgiven for wondering whether Amazon VPC might render Cloudswitch’s technology unnecessary: to date, the startup has been tantalizingly vague about what it’s actually building, beyond descriptions like the one on its website about an “innovative software appliance that delivers the power of cloud computing seamlessly and securely so enterprises can dramatically reduce cost and improve responsiveness.”

“We haven’t talked in any detail about what we’re doing, so the words all sound the same from the 50,000-foot level,” Rubin acknowledges. “Things like ‘helping connect the cloud back to the data center’—we are using those terms right now to talk generally about where the company is going. But the specific approach we are taking is fundamentally different from what Amazon is doing, and complementary. What we add is a pretty dramatic set of things in addition to what Amazon is offering with VPC.”

In fact, VPC will make Cloudswitch’s appliance work better, Rubin says. She doesn’t seem worried that the ongoing improvements Amazon is making to its cloud services will narrow the possibilities for the growing ecosystem of infrastructure-as-a-service vendors. “If you ask what is it going to take to get enterprise IT into the cloud, there are still a lot of problems that need to be solved and a lot of room for innovation and breakthrough technology,” she says.

To be sure, it can be nerve-wracking to figure out which customer needs remain unmet in an industry like cloud computing, where a few big players are setting the technical agenda and defining what basic capabilities are available. “When you’re building your business around a big vendor, whether it’s Amazon or Hewlett Packard or VMware, you have to see that their roadmap is going to cut off some opportunities for you, so as a startup you have to constantly be moving and migrating your own roadmap to stay ahead of those changes,” says James Staten, the lead analyst studying the nascent infrastructure-as-a-service industry at research firm Forrester.

That’s why it’s especially important for cloud vendors not to marry their technologies too closely to any one cloud provider, Staten says. “Amazon is a little different than a lot of the other high-tech providers in that they don’t tend to give as much of an advance view of their roadmap to their partners,” he says. “So startups like Cloudswitch in the cloud area should really focus on doing things not just for Amazon’s cloud but on delivering common value across multiple clouds, because that is what will keep them differentiated.”

And that’s just what Cloudswitch is doing—more because it’s what customers want than because of uncertainties about Amazon’s roadmap, Rubin says. “The market has told us—the CIOs and vice presidents of IT that we work with—that it is important to them to have flexibility,” she says. “They are not eager to be locked into a specific platform, and there are different applications that are better suited to different types of environments. So that has always been in the design for the company, but based on what customers tell us they want to do and which clouds are of interest to them.”

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

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