Wallace and Bird Hosting soar: how they save on hardware while delivering more complex apps

Many of the cloud service providers that we are working with here at CA Technologies are small, but aggressive. These are the guys that know their business really, really well and are the ones who are targeting their niches pretty successfully. The ability to focus and be nimble are some of the key indicators of success in the service provider space.

We’ve been calling folks like these “Cloud Accelerators” – given how instrumental these service providers are being in the adoption of cloud computing -- and we have been profiling some of the more interesting ones.

Bird Hosting strikes me as a great example of one of these “accelerators.” They may not be on your radar screen yet, but Bird Hosting is a cloud service provider that’s nimble and all about the personal touch. They not only deliver cloud hosting and other key services to customers, you can find them answering questions on WebHostingTalk.com. They post reviews talking through the pros and cons of the newest rev of their cloud platform. They even run a hardware review site. (After all, there are benefits for a service provider to know this stuff.)

They do all this with 10 employees, 3 locations…and they have 3,600 customers.

Bird Hosting’s CEO, Michael Wallace, answered a few questions about their operations, what’s key for a service provider’s cloud platform, and even what’s up with their name. Read on:

Jay Fry, Data Center Dialog: You’re a relatively small service provider. How many data centers do you need to effectively serve a nationwide customer base? What else is important?

Michael Wallace, Bird Hosting: We started in Seattle. When you have a data center in Seattle and customers in New York, the content isn’t delivered as quickly as you’d like – content delivery speed is important. We saw a need for something more central in the U.S., and so we went to Dallas. We now have 3 data centers (Seattle, Dallas, Washington, D.C.) and can cover the whole United States effectively.

In fact, we have customers across the world. We have customers that range from small shared-hosting accounts to large corporations. For example, we support a travel organization in New York, a food chain also in New York, as well as Costco. We host and produce videos that have 360-degree views of sheds and playgrounds that Costco sells.

DCD: How did you get started in the service provider business?

Michael Wallace, Bird Hosting: We originally started in 2005. My father was one of the pioneers of the Internet; he started an ISP in 1991. I started out doing web hosting with some big corporate website hosters. I found that they were subpar, both from how they presented themselves to the services they offered. So I decided to do my own. I had the knowledge to do it. And I had just returned from a lengthy tour of duty with the U.S. Air Force in Iraq and was ready to take a bold move and launch my own business.

DCD: A recent article in SearchITChannel by Carl Brooks talked about the fact that the market is starting to realize that enterprises who are building private clouds and service providers that are selling public cloud services have some very different needs. Can you talk a bit about what you think is important to have in a cloud platform for service providers like yourself?

Michael Wallace, Bird Hosting: Two things that are very important are cost savings and flexibility. With CA AppLogic [what Bird Hosting uses], I’m not limited. It’s a platform that allows me to offer a full range of services. Before I had to have separate machines for each individual task. We had to have a box for Windows, a box for Linux, and when we added customers, we had to add more dedicated boxes. With AppLogic, you don’t have to be limited to a certain OS. You have a cluster of servers and it allows us to run all of our applications on top; it’s neutral. So that helps us save money – we are able to standardize hardware and we can even save power.

DCD: Speaking of saving power, I’ve heard you talk about how much you’ve reduced your environmental impact. Can you quantify what you’ve been able to do?

Michael Wallace, Bird Hosting: When we first started our business, we sold a lot of dedicated servers. Each would have a power draw even when idle. CA AppLogic allowed us to take those boxes and cram them into a virtual environment. Customers on dedicated servers were able to run as virtual dedicated servers instead. Customers were paying for a given amount of resources; we would give them the resources and they would run their environment. We cut back from 6 full cabinets to just one cabinet in one data center.

We were able to take 200 boxes and put that into 10 boxes. In our Dallas facility, for each of our cabinets we have two power drops, which costs $960 per cabinet – just for power. We were able to cut back 10 power drops, saving us about $10,000 per month.

DCD: Service providers are all looking for ways to define a niche that they can own, build up new revenue opportunities, and grow their margins. What has your cloud platform decision and approach meant competitively?

Michael Wallace, Bird Hosting: It allowed us to broaden our market. We could have stayed where we were and offered shared hosting and dedicated servers. But using AppLogic has allowed us to venture into more complex application hosting. It allows us to create more complex environments with ease. Those environments usually would have taken us a long time to set up if we were going to do it in a physical environment—running cables from an end gateway or a firewall to a hardware load balancer to machines. That’s what AppLogic does in software.

We can support more complex applications. We wouldn’t be able to offer as many value-added services without AppLogic. We can do so quickly and efficiently, scaling things up or down as much as they need. And then we can charge per resource.

DCD: Do you see IaaS providers like Amazon as competitors?

Michael Wallace, Bird Hosting: I don’t consider Amazon a direct competitor – they can’t do what we can do. We have a running joke – customers come in and say “our uptime is 70% with Amazon Web Services.” We can give them close to 100%.

DCD: You also do a lot of stress testing with your hardware. What has that meant for customers? What have you found?

Michael Wallace, Bird Hosting: CA AppLogic is designed to take a bunch of small systems and merge them into a cloud. With more cores and more memory on each machine, you can get more out of each machine without adding more hardware footprint. We decided to start a little testing to find out what are our limits, what can we do? We tested different types of hard drives and configurations, different controllers, to see what worked best.

Testing the efficiency of servers brought me into a whole new area. I now run a hardware review site on the side. The stress-test work helps us figure out what machines can handle without impacting performance.

[Note: you can contact Michael directly to talk about any of his results if you’re interested in more details.]

DCD: Do your customers know anything about cloud computing? Does it matter to them?

Michael Wallace, Bird Hosting: There has been a lot of confusion and debate with the cloud. When I started out, we heard concerns about sharing data. We see less concern about that now. They do see the power of cloud computing and interact with it if they are using our virtual private data center offering. We dedicate a given group of machines to a customer and they get access to the CA AppLogic portal so they can build applications the way they see fit. They use CA AppLogic to virtually build their infrastructure.

…

Thanks for the time, Michael.

Oh, and in case you were wondering about the name, you’ll be happy to hear that I (of course) didn’t let that go. Here’s what Michael said about the name: “When we started looking for names, I was also looking for a mascot. That’s where Bird Hosting came from.” Did he try other more, er, ferocious names? “HostGator was taken,” said Michael. “And Dog Hosting was too gangster for me.”

The resulting mascot has an uncanny resemblance to Twitter’s feathered friend, if I do say so myself. Or the stars of a certain iPad game I’ve gotten myself hooked on.

But no Angry Birds here. Just a set of happy customers benefiting from Bird Hosting’s personal focus on delivering what experience dictates is required for service providers to soar: performance, reliability, and value.

You can read the Cloud Accelerator profile of Michael and Bird Hosting on the CA Technologies site. The site also features other luminaries who are setting the pace for cloud computing.

Ortenzi and ScaleMatrix show what's possible when data center experts start their cloud from scratch

Imagine for a moment that you could take all the smart things that you and a few of the smarter people you know have learned about setting up and running data centers over the past 20 years and apply it, right now. No legacy systems to worry about – you could start over using hardware configurations on the cutting edge of efficiency and a pretty hot software platform to base your cloud services on.

Too late. Mark Ortenzi and his cohorts at ScaleMatrix just built that company.

ScaleMatrix, a new Southern California-based managed service provider (MSP), started up in the middle of last year. Mark and the guys running ScaleMatrix have been in the data center space for years, and decided now was the time to get financial backing, invest in the right amount and kind of infrastructure, and run data centers the way they ought to be run. Their goal? To become an MSP offering a wide variety of cloud services that are in demand with customers while building a great business for ScaleMatrix. They became a big CA 3Tera AppLogic partner following a $3.06 million deal we (CA Technologies & ScaleMatrix) did together in January.

I asked Mark, their CEO, if he’d provide a little background on what ScaleMatrix is up to for the blog. Mark’s background includes senior executive positions with several data center and dedicated server companies. As you might guess, Mark has a strong background in data center design and he has written several industry standards articles relating to data center operations, design, and efficiency. He has several patents pending relating to his latest enclosure design that will be deployed at ScaleMatrix, one piece of their secret sauce. Read on:

Jay Fry, Data Center Dialog: ScaleMatrix is a brand new entity, but your team is made up of data center veterans. What’s your unique pitch to customers and what are you mainly focusing on?

Mark Ortenzi, ScaleMatrix: We’re different. We’ve been in the industry for 20 years, and things have changed in the area of heating and cooling efficiencies. And in being able to grow data centers in an environment without having to spend $50-100 million overnight.

What sets ScaleMatrix apart from other so called “cloud computing companies” is our ability to control the entire process. We’ll be able to architect, deploy, and manage the entire solution in any one of our 12 data centers across the United States or in your own private data center. By controlling the entire process we are able to offer our private cloud solution as a service. Thus, we become an operating expense and not a capital expenditure.

Plus, everybody in our org is a systems engineer. We don’t hire door openers.

DCD: Some have said that cloud computing might be the new innovation that came out of the recent big recession. Whether that ends up being true or not, there’s no doubt that you guys are making a big bet in the hopes that the timing is right for both service providers and cloud services. What market conditions convinced you to strike out on your own with ScaleMatrix right now?

Mark Ortenzi: Flat budgets in the traditional data center realm are a new norm. The role of IT must adjust to [that of] “service provider,” creating internal and external services to deliver on needs. Just about everyone is aware that IT needs to drive revenue…but the reality is that business demand is outpacing IT budgets and resources. IT had been the sole source of IT services in the enterprise until cloud computing options appeared, promising fast, simple access to new services. Instead of going to IT for everything, the business can now go around IT to cloud alternatives.

The low-hanging fruit right now for us is SMBs. Everyone has an initiative in the cloud, and we have a really affordable plan. We can bring it up, run your model, and have a presentation to the CTO – to show them that it works in an affordable manner.

DCD: We’ve recently published the results of an IDG survey about how cloud computing is affecting the IT role that pointed to the importance of many of the business skills. I’ve also talked here about IT titles that may be on their way out, and others that are now appearing. How do you see cloud computing changing the role of IT inside enterprises?

Mark Ortenzi: I see IT becoming an operating expense. The days of owning and maintaining a private data center are nearing an end. Demand for IT within the enterprise will continue to climb. Providing a “pay-as-you-go” model for IT just makes sense. Cloud computing also provides the enterprise the ability to adjust to the current IT atmosphere faster than ever before. Nowadays, it is much easier to develop flexible, scalable and reliable services on the fly.

DCD: You’re banking on some pretty innovative components and operations approaches to run data centers. Can you describe how you guys are doing things differently for your customers?

Mark Ortenzi: There are many different aspects of our business model that differentiate us from our competitors. Our newest data center is being built out on an as-need-basis. We only utilize hardware, electricity and manpower needed for the clients we currently have. Our data center is scalable, energy efficient [a PUE of 1.1 is the number Mark touts, by the way] and our proprietary rack system using commodity servers is fully self-contained. We also are the only private cloud solutions provider that manages, maintains, trains and deploys the entire solution from soup to nuts.

DCD: How are you and your team measuring your success with customers?

Mark Ortenzi: Initially every customer is asked; “What are you trying to achieve by utilizing our private cloud solution?” Once the solution is in place and fully operational, success is measured by our ability to meet their goals, our ability to save the customer money and reducing their IT capital expense.

DCD: You’re using CA 3Tera AppLogic as a basis for your new business. Why did you take that approach versus what else you could have done?

Mark Ortenzi: It’s simple, CA 3Tera AppLogic is a fundamental piece in the ScaleMatrix business model. It provides us the ability to be scalable within our organization and the ability to extend this to our customers. There isn’t any other product on the market today, to our knowledge, that provides the ability to virtualize the entire IT infrastructure of a business while maintaining ease of use and cost effectiveness.

DCD: Regarding cloud computing in general, what’s the most compelling benefit you see organizations getting from cloud computing?

Mark Ortenzi: Maximizing ROI and reducing operating cost while eliminating IT capital expense.

DCD: What are still the biggest hurdles for cloud computing, and for ScaleMatrix? How are you helping folks get over those?

Mark Ortenzi: Bringing awareness to the AppLogic product, how cloud computing works, and how to take advantage of it – these have been the most challenging. It’s so fundamentally different from how business-class computing has been done in the past. Getting the potential customer to understand that is difficult; [using cloud computing and AppLogic] is easy and we make it this way for a reason.

It’s difficult wrapping our customers’ minds around how cloud computing works and how to take advantage of it. The smarter they are, the harder it is to get. They wrap too much into it– they have a cloud initiative, but they don’t know what to do. We put a plan together for them. What you focus on to get them past the hump comes down to figuring out what their business model is and what their pain is at the moment. You find it to be different with everybody. Usually, when you’re partway through it, a light bulb goes off.

DCD: Any advice on where to start with enterprises?

Mark Ortenzi: You have to get their feedback on what they’re thinking, what they’ve learned, who they’ve worked with. Don’t go after the big animal – converting their whole infrastructure over to cloud in one shot – boy, don’t ever do that. Instead, you find that little thing that is troubling them and show them how to resolve it, the pet project that they want to do more cheaply, more quickly.

…

It will be interesting to watch how Mark and the ScaleMatrix team progress over the next few months. One way of looking at the ScaleMatrix business is that they are putting the elasticity and dynamic qualities that cloud brings customers, and using them to support their own cloud services business. Their customers get state-of-the-art data centers and cloud-ready hardware and software infrastructure, but also direct access to Mark and his team with years of operational experience. These guys have been through a lot of real-world scenarios, and it takes quite a lot to surprise them.

I’ll keep tabs on ScaleMatrix and provide updates here and on my Twitter feed about what’s going on with them. If you have questions, you can ping Mark or his team directly.

Cassatt cloud innovation added to CA muscle

For those who have been watching and wondering what's next for Cassatt, the wait is over. CA announced today that they are the new home for much of what Cassatt has to offer: technology assets, patents, and a very significant chunk of the employees.

After the dire situation that Quentin Hardy wrote about in Forbes back in April, this is certainly a win for Cassatt and those with vested interest in seeing its ideas -- often described as both innovative and too far ahead of the market for its own good -- find a backer.

Here are a couple relevant excerpts from the CA-Cassatt press release:

CA Acquires Cassatt Data Center Automation Innovation and Expertise:
Acquisition Enables Dramatic Expansion of CA’s Automation and Cloud Capabilities

ISLANDIA, N.Y. and SAN JOSE, CA, June 2, 2009 -- CA, Inc. (NASDAQ:CA) today announced the acquisition of certain data center automation and policy-based optimization expertise and assets from Cassatt Corporation, a provider of innovative cloud computing software that makes data centers more efficient. Terms of the deal were not disclosed.

Some comments from Ajei Gopal, executive vice president of the Products and Technology Group at CA:

"This acquisition strengthens CA's ability to deliver on the promise of Lean IT for our customers. With the addition of Cassatt's engineering team and advanced data center automation assets, CA will accelerate its development of software that helps customers make more intelligent, business policy-based decisions. We are ensuring that CA will continue to be at the forefront of managing our customers’ evolving IT environments."

And some comments from Cassatt's chairman and CEO, Bill Coleman:

"Cassatt has long been a champion for using a cloud-style architecture to manage data centers like a 'compute utility.' This is a great move for both organizations because of the vision we share -- delivering a new, dramatically more efficient way to run data centers. The acquisition of Cassatt's data center automation technology and expertise by CA, one of the world's largest and most successful software companies and an innovator in business-driven automation, will help make this vision into a reality for customers."

And, finally, from Donald Ferguson, CA's Chief Architect:

"Cassatt invented an elegant and innovative architecture and algorithms for data center performance optimization. Incorporating Cassatt's analysis and optimization capabilities into CA's world-class business-driven automation solution will enable cloud-style computing to reliably drive efficiencies in both on-premises, private data centers and off-premises, utility data centers. We believe the result will be a uniquely comprehensive infrastructure management approach, spanning monitoring, analysis, planning, optimization and execution."

As I look at CA's infrastructure management portfolio as a (now former) outsider, I see a lot of product breadth in something near and dear to the hearts of those of us from Cassatt: data center efficiency. This deal combines CA's already broad product set and its formidable execution capabilities with some new data center optimization, cloud computing, and automation expertise from Cassatt. That seems like good news to me, especially since one of the dings against Cassatt has always been that infrastructure management is pretty difficult to entrust to a small vendor.

Neither Cassatt nor CA are going to have much more comment on today's announcement beyond the official press release. Don't take that as negative. We're spending our time and effort (starting today) to bring it all together in a way that will make sense for everyone involved. We'll share those details when we have them.

One piece of bittersweet news is that while Cassatt CEO Bill Coleman has been the face and personality behind Cassatt since its beginnings in 2003 (including a starring role as a Forbes cover boy in September 2006), he won't be coming with us to CA. I'd like to personally thank Bill for his vision and passion, and for giving me the opportunity to be a part of the story at Cassatt. I like to think that even though we didn't achieve the massive customer adoption we were hoping for, we did have a significant impact on the industry discussions about how to run and manage a data center, about utility computing, and about what has come to be known as cloud computing.

Along the way, we at Cassatt have all tried hard to make sure we're part of a real, on-going conversation with the industry and with end users. The name of this blog is just one reflection of that. Many things will likely change for us Cassatt folks as a result of the CA deal, but I for one am confident that we'll keep the dialog going. Stay tuned.

You can continue to follow Jay Fry on Twitter as @jayfry3.

Amid the Cassatt hubbub, data center efficiency projects stay front and center

All of this week's hubbub about Cassatt's future has certainly kept me plenty busy, but I thought I'd take a break from all that to publish some of the feedback we received about data center efficiency projects from our 2nd Annual Data Center Survey. Data center efficiency is a topic that's near and dear to our hearts, but is not always at the top of data center discussions (and in a week swirling with speculation, doubly so). Often it's the technology du jour that grabs the spotlight instead, even when the end goal is, in fact, to make things run better. Here's hoping we can help change that.

(Oh, and in case you're scouring this post for hints or tips about what's happening with Cassatt, I'll let you know up front that you're likely to be disappointed. Unless, of course, you manage to decode all of the many double-secret messages I've encrypted within this post. Riiiiight.)

You did a survey about data center efficiency? Why?

If there's one thing that I hope came through in the many discussions about Cassatt this week, it's that everything we do (and have done with the organizations we've worked with throughout our history) boils down to this: improving data center efficiency. The interesting thing is how fundamental optimizing data center operations is for a number of the topics that are front-and-center for IT today. Yes, we have products in this area, but that's not the only reason to focus here. Data center efficiency is a driver for cloud computing. It's at the core of the energy efficiency and green IT work. And it's something that the economic downturn is demanding of IT departments.

Now, I'm not claiming we knew how serious and prolonged the recession would be when we were coming up with our survey questions, but now actually seems like an ideal time to talk about data center optimization. And our numbers support this: only 5.5% of our responders said they aren't pursuing a data center efficiency project.

So, with that in mind, here are some of the interesting things for the other 94.5% of you that we unearthed when talking to data center managers in our database:

Data centers: where everyone is "above average"

It's always fun to ask questions you know are going to lead to amusing results. When we asked how people rate their data center(s) in terms of IT operations efficiency, 41.2% said they were "average," 38.5% said "better than average," and 7% said "very efficient." That leaves only a little more than 10% who admitted they were "worse than average" or "poor."

OK, folks, maybe this whole conversation should start with a session on how to honestly assess where you are. Everyone obviously listens to too much Garrison Keillor. Having seen this "overestimation" problem in a lot of end user IT departments, we created a profiling service to help provide customers accurate baselines for improving operations. And so IT wouldn't have to rely on their gut feel that they're "doing pretty well." You're probably not.

So, what data center efficiency projects are going on in IT?

Definitely virtualization. And virtualization. Oh, and virtualization. That (and server consolidation) accounted for 42.4% of the data center efficiency projects underway. A few data center consolidation (12.7%) and energy efficiency (11.8%) projects were thrown in for good measure. (By the way, we have some '09 energy efficiency project data that I'll post later alongside a comparison with last year's survey results on that topic).

This trend toward data center consolidation was underscored in a separate question in which almost three-quarters of the respondents said they were moving toward fewer, more efficient data centers. But there are exceptions. 16% are actually expanding the number of data centers they are using. Some of the audience polls at the December Gartner Data Center Conference showed similar trends -- in both directions. One size definitely doesn't fit all.

Everything isn't going to be virtualized, though

I previously posted a bunch of the virtualization-specific survey results that we received. Here's one additional bit of data: exactly how pervasive will or won't virtualization eventually be? 4% of the respondents expect to virtualize 100% of their server environment, while another 26% figured they'd be between 75% and 100% virtualized.

The interesting answer, though, is the one at the bottom end of the scale: despite all of the in-roads virtualization is making (and it is everywhere, there's no denying it), 41% of data center managers we talked to said they would be virtualizing less than half of their servers. There was even a stodgy 6% saying they won't be virtualizing at all, thank you very much. I'd say that a big chunk of responders know what they're talking about, too, from actual virtualization experience: 43% have completed some virtualization projects, but still have more to do. These numbers continue to tell me that heterogeneous physical and virtual resources will remain the norm in big, enterprise data centers.

Why pursue a data center efficiency project? Economics, but not the economy

When we asked why folks were working on data center efficiency, one of the options was "current economic conditions." I figured this would be one of the big drivers. Who wouldn't at this point? In fact, it was not. The biggest reason for a data center efficiency project was that "there will be specific economic benefit, regardless of external economic conditions" (so said 35.8%). That implies that these data center efficiency projects are not a short-term fad, but in fact, likely to be an on-going activity. The only way to really tell will be to ask the question again in next year's survey. I'm hoping we get the chance to ask, one way or another.

The second biggest reason (32.1%) was capacity constraints on IT infrastructure (power, space, etc.). This matches what we've seen from our customers and prospects. The ones with the most urgency have consistently been the ones coming to us searching for a solution -- sometimes temporary, sometimes more permanent -- to a data center capacity issue (one organization wasn't able to add even a single additional server to a specific facility because they were out of electrical capacity). Only a little over 12% answered the "why" question by saying they were reacting to a bit of organizational arm-twisting, in the form of a corporate mandate to improve data center efficiency. Looks like many don't need that kind of incentive from above. They know an important issue when they see it.

Anything else worth noting…like, say, cloud computing?

And since no self-respecting data center survey would be complete without asking cloud computing questions, I'll post the answers we received on that topic shortly as well. No matter how things end up with Cassatt, I figure that continuing to post this data (you can see previous posts from the past few weeks here and here) could provide some useful insights for IT ops and the industry at large.

And keep the dialog going.

P.S. If you're looking for some more interesting data center (in)efficiency statistics, James Governor over at RedMonk passed on some dramatic ones from IBM that I link to here. For starters, 78% of data centers were built before the dotcom era, and one of James' sources figures supply chain waste from data center inefficiency is around $40 billion. More fuel for the fire showing why these projects are so important for data center operations.