What a difference a few years can make. When we launched AppLogic and described how IT could use resources outside their own data centers to run their apps, many folks were initially very skeptical. Although Nicholoas Carr had written and spoken about this for a couple years already at that point, more than a few told us we were nuts. Our ideas on packaging operating systems into appliances was even more controversial at times, prompting some heated blog posts. It all reminded me of the old quote “If (your idea) is original, you will have to ram it down their throats.”

Of course, today cloud computing has become one of the hottest topics in technology, and the current economic climate is only accelerating that interest. As IT shops in companies large and small try to do more with less resources, they are looking to cloud computing for its flexible resource usage, low capital costs and ease of management.

Join 3tera and Forrester Research Principal Analyst James Staten for a free Webinar on March 4th as explore the new frontier of global cloud computing. Jame will discuss what he’s learned from enterprises that are looking to build their cloud strategy about their concerns and considerations. In addition, we’ll also demonstrate some capabilities of the global cloud live, incorporating both public cloud services and private clouds behind the corporate firewall.

Most purveyors of Cloud Computing claim that one of its great benefits is that it can turn capital expense into operational expense.  3tera’s AppLogic Cloud Computing Without Compromise, though, reduces all expenses, both CapEx and OpEx.

AppLogic encapsulates entire applications and everything those applications need to run – code, data, OS, middleware, DBMS, infrastructure, configuration, policies, etc. -  into a single, easy to manage entity that is abstracted from the hardware.  These encapsulated applications are “superimposed” on a server farm and dynamically allocate the resources they need to run.  Therefore, specific hardware is no longer assigned to specific functions – any idle hardware can be used by any active application.  Thus, hardware becomes much more densely populated, ergo, much less hardware is needed.  This results in greatly reduced CapEx.

As such, all servers in the farm can be commodity servers all configured the same way.  So there is no need for intensive server administration.  In most enterprises and at most data center operators, one administrator can manage approximately 50 servers.  With AppLogic, because the administrators are managing application instances each of which can consume any number – up to hundreds – of servers, the applications one administrator manages can be consuming hundreds of servers, thus, increasing administration efficiency by an order of magnitude.  This results in greatly reduced OpEx.

And, as great as this is, it is only icing on the cake.  The “cake” is this.  Because applications can be run on arrays of existing commodity servers, the time it normally takes to provision and configure hardware for specific applications is virtually, pardon the pun, eliminated.   Time to market is dramatically decreased creating huge revenue opportunity.

So, the next time someone proclaims, “You get what you pay for.”, tell them when you pay up for information technology infrastructure, you don’t have to pay more to get more.  With Cloud Computing Without Compromise, you get an awful lot for what you DON’T pay for!

This one’s been eating at me since September 17 at 10:09 AM.   That was when a speaker from Tier 1 Research concluded a presentation at the 4th Annual Hosting Transportation Summit (HTS) at the Mirage Hotel in Las Vegas.

HTS is a great event for anyone involved in the hosting industry.  It was attended this year by about 400 people representing everything that’s anything in the U.S. hosting industry.  Attendees, for the most part, have profit and loss responsibilities and were there to find new weapons for their arsenals to increase revenues.   I love these focused conferences.  Having them in Las Vegas is really smart.  That makes it easy to gauge attendees’ interest by seeing how much of the audiences at the various sessions are lost to the casino.  The sessions at HTS were well attended!

By contrast, that week was VM World, right across the street (which in Vegas means only a 15 minute stroll) at The Venetian.  VM World was impressive – close to 15,000 attendees, I am told.  My sense walking around there, though, was that the majority of the attendees were more technology oriented – looking for cool new technology – but were not the people in their organizations responsible for P&L, who make spending decisions, and, most importantly, who make strategic business decisions.

So, what happened at 10:09 AM Las Vegas time on 9/17?  I just finished watching and listening to a very well researched and prepared presentation by a Senior Analyst at Tier 1, who organizes the event.  He very thoroughly described how the Cloud people, the compute on demand people – people like Amazon and Google, were kicking the hosting providers’ butts as they remain a commodity whose ability to compete with these Cloud giants is starting to wane.

What he didn’t do, though (and this is no criticism of him – he did his job), was talk about what the hosting providers can and should do to combat this.

So, why now?  If it’s been eating at me 7 weeks, why am I writing about it now?

Well, for the last couple of months, enterprise interest in Cloud Computing seems to have emerged in spades (pardon the Las Vegas pun).  VMware, Citrix, Microsoft and others have all made announcements readying themselves for enterprise Cloud Computing.  Our own marketing efforts have been focused around the enterprise as, though we are largely used by hosting providers and our customers are largely hosted, we have a full Cloud Computing platform that can run behind a corporate firewall, and our number of customers who do that, particularly enterprise customers, are definitely growing.

So, let’s not forget our hosting providers.  They are not only the salt of the Cloud, but they will be an integral part of Cloud Computing’s future.  In fact, as Clouds begin to interoperate globally, it will be the hosting providers who jump on that bandwagon who will fuel it with much of its resources.

Note to Hosting Providers:

If you are worried about how you are going to cope with this new competition, there is something you can do about it.  This advice might sound like an “if you can’t beat ‘em, join ‘em” mentality, but it is far from it.  The mentality is more of the nature that you should join a movement that they, too, will eventually have to join.

Whatever people think, there will not be a single dominant Cloud from any of these guys.  Cloud Computing, like any other utility, will evolve into a series of Clouds that can interoperate among themselves and are connected globally.  These interoperating Clouds will be run by hosting providers, will be proprietary Clouds like EC2, AppEngine, etc. and will be corporate data centers.

So, how does a hosting provider get on board?

Hosting providers need to implement Cloud Computing platforms in their data centers (of course, I think that platform needs to be 3tera’s AppLogic – plug, plug – surprise, surprise).  They need to build product offerings on these Cloud platforms.  Once there is a critical mass of applications hosted in all of these Clouds, the leaders will start interoperating with one another as people will want to share and reuse technology components, and, more importantly, companies will want to effect business to business transactions with companies running in other Clouds.

It will be inevitable that businesses running applications in proprietary Clouds will want to have the same capabilities, and in order to do so, their Clouds are going to have to start interoperating in the same ecosystem that yours do.

And guess what.  Many of the new enterprise customers we are attracting are and are wanting to run their web applications in external Clouds - HOSTED BY YOU.  So, there’s a whole new customer base here ripe for the picking.

So, hosting providers unite.  Get on board the Cloud train and in time, and not a real long time, the Amazons, Googles, Microsofts, Akamis, Salesforces, etc, of the world will have to join you or be beaten by you!

Ken Fogarty, writing for CIO, comments on a panel on virtualization at MIT last week that included Amazon CTO Werner Vogels and VMware founder Mendel Rosenblum.

“The good news is that virtualization will become a critical part of an even larger part of most IT infrastructures as time goes on.

“The bad news is that it will do so as part of a larger movement toward cloud computing and will, in large part, disappear as a separate discipline.”

This trend started a year ago and IMHO is new happening faster than most folks expected. Perhaps this explains why so many vendors seem to need to claim they are in the cloud computing space.

This week, something quite miraculous happened.  Those of us whose vision of the future is in the Clouds have seen our crystal balls start working.

Months ago, 3tera unveiled our Cloudware architecture.  But rather than try to convince the world that there is only a single architecture that works and ours is it, we emphasized that Cloud architectures need to be open.  Not only need they interoperate with all sorts of hardware and software as virtual appliances, they need to interoperate with other Clouds and Cloud components as well.

So, what happened this week?

The two undisputed leaders in virtualization, VMWare and Citrix/Xen announced suites of products in support of Cloud Computing, vCloud and Citrix Cloud Center (C3), respectively.  Undoubtedly, Microsoft and Red Hat and more will follow.

The anticipation that drove our Cloudware architecture is proving spot on.  There will be multiple global Clouds, they will not all be the same, and the ones that will get the brass rings will be the ones that interoperate rather than stand alone.  Cloudware is designed so that it will, in the not too distant future, have the ability to incorporate elements from any Cloud.

You will note that both VMWare and Citrix, in their Cloud announcements, emphasize the need for API-based interoperability among Clouds.  3tera agrees.  The development of this interoperability will make the vision easy to accomplish.

3tera intends to take this direction to the nth degree by not only enabling applications in one Cloud to interoperate with applications in others, but to enable elements from multiple Clouds to coexist in the same application.

There’s been a lot of music to our ears this week.  The huge install bases of VMWare and Citrix are becoming part of the eco-system that we have been participating in the definition of, designed for, been building for and support - the eco-system we’ve been predicting was coming.

So, if this is music to 3tera’s ears, it’s a multi-media extravaganza that should tickle all the senses of information technology users of any size   Combining a continued direction of open Cloud Computing where anything can operate in the Cloud with this new direction of interoperability among Clouds will leave all IT users at their own mercy.  Vendors will have less ability to manipulate and dictate what hardware you run your applications on, what operating systems you use, what software you deploy, what type of infrastructure components you rely on, what databases you use and where your applications run - and in how many places.  This will ALL be up to you and you’ll be able to change it all at YOUR will with just your little old browser.

Congratulations to Albert Wu and his team at SilkFair on their recent mention in the Wall Street Journal. Albert contacted 3tera shortly after we came out of beta, and have been using AppLogic for well over a year through our hosting partners. He also had the distinction of being the first user to ever publicly post about his experience with AppLogic.

I’ve had the pleasure of talking with Albert a few times about business and technology. He’s a heck of an entrepreneur so it’s exciting to see him succeed and to be able to be small part of SikFair’s ongoing success.

With well over 18 months of data, 3tera’s metering system is starting to provide some interesting statistics. One example I can share for instance, is the graph below which illustrates that since January 2007 the average resource consumption per AppLogic user has quadrupled even as we’ve added more and more new users.

I’ve been reviewing the metering data from AppLogic installations recently to determine uptime and for the first 7 months of 2008, our users experienced 99.9% availability. I’ll be sharing more stats over the coming days, but for the moment I want to congratulate our operations team and all our data center partners!

Now, on to get the next two nines.

Xseed’s recent announcement offering AppLogic in Japan means cloud computing is now truly global.

Alistair Croll recently posted an excellent writeup on Gigaom that attempts to segment our somewhat noisy market into 9 vendor sectors that IMHO many prospective users may find helpful in understanding vendor positioning. Alistair put 3tera’s AppLogic alone in his “cloud building” sector, but like most of Alistair’s work the whole piece is worth a read so I won’t repost it all here.