How to Disrupt IBM, Oracle, and VMware: The CloudBees Story

2/29/12Follow @gthuang

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about a half-dozen staff based in Woburn (mostly in sales and marketing). The rest are distributed worldwide. The company got started in early 2010 and has raised $14.5 million from Matrix Partners, Lightspeed Venture Partners, and private investors including JBoss founder Marc Fleury. Its customers include Amdocs, Bullhorn, Cisco, Digg, LoseIt, Netflix, Raytheon, and Symantec.

So where does this startup fit in the grand scheme of cloud computing? If you think of the cloud as three layers, Labourey says, CloudBees sits in the middle. The bottom layer is infrastructure as a service—like Amazon’s building blocks of storage and processing. The top layer is software as a service, which has become the dominant model for software offerings (one pioneer being Salesforce.com). In between is platform as a service—which, Labourey says, to date has been focused mainly on running applications, not developing them too, as CloudBees is trying to do.

“The net effect is the developer is going to be able to supercharge the business, because they’re going to be able to create these new innovative applications layered on top of the old legacy systems,” says André Pino, who heads up CloudBees marketing.

And that brings us to the disruption that CloudBees is looking to wreak. “Delivering [platform as a service] is going to kill the existing packaged middleware business,” says Steve Harris, senior vice president of products for CloudBees. “It’s certainly a huge disruption from a business standpoint. Instead of people selling you licenses, they sell you use of their service through our platform.” (Meaning that companies are moving away from buying licenses for software built around servers and operating systems and towards a model where they buy just what they need via the Internet.)

Harris knows all about entrenched middleware vendors, being a 13-year veteran of tech giant Oracle (NASDAQ: ORCL). But it’s not just Oracle, which sells its WebLogic server software for developing cloud applications. It’s also IBM (NYSE: IBM), which has a competing product called WebSphere, and VMware’s (NYSE: VMW) Spring framework. And, of course, Red Hat (NYSE: RHT) is in CloudBees’ sights as well, with its JBoss application software. (Any entrepreneur worth his salt wants to compete with the company that bought his last startup, right?)

The big boys would probably brush off CloudBees as just another buzzing pest in their ear. Nevertheless, the two-year-old startup has reason to … Next Page »

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com. Follow @gthuang

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