Allan Leinwand recently wrote
on GigaOM about EngineYard’s specialized Ruby-on-Rails hosting environment “What is different about EngineYard, however, is their hyper specialization . . .” He goes on to point out, though ” . . . EngineYard will have to constantly add more staff, which means the cost advantages of running a large cluster could simply vanish.”

I took a look at EngineYard’s website and agree with Allan that EngineYard is offering developers a valuable service. On his second point, though, the jury is still out. I’m openly biased (and if you’re reading this you’re at least partially biased as well), but EngineYard doesn’t need to own and operate servers anymore than their customers do. That’s not the source of their differentiation. Just as GM doesn’t make spark plugs and Apple doesn’t make disk drives, EngineYard can build their service completely on utility computing - allowing them to focus on what sets them apart, they’re knowledge of Ruby-on-Rails developers.

If they don’t - the next EngineYard will . . .