In 2006, when Thorsten von Eicken, CTO and Founder of Cloud computing management platform specialist firm RightScale, was teaching a class at the University of California on how to deploy a Ruby on Rails application in the Amazon Elastic Compute Cloud (EC2), it occurred to him that, for all its versatility and rich potential, the first instance of the EC2 service was difficult to use. Then the RightScale Cloud Management Platform was born. In the years since, thousands of deployments and more than two million servers have been launched on RightScale, and the company that von Eicken and CEO Michael Crandell founded (in September 2006, a month after EC2 was launched) has become a global leader in the Cloud computing management business.
Today, RightScale Inc. is in Asia in a big way, it seems. We spoke in early March this year with Josh Fraser, RightScale’s Global Vice President, on the occasion of his company’s setup of its APAC headquarters in Singapore. He gave us his evaluation of the global Cloud computing market and told us about Cloud service management trends to keep an eye on in the next couple years.
What is unique about your business and your typical customer set?
Josh Fraser: We sit in the middle between customers, the applications that they want to run and the Cloud resource pools that they want to run those applications on. What’s particularly unique about our product [the RightScale Platform for Cloud management] is we’ve designed it in such a way that gives customers and application providers complete flexibility to deploy and manage across multiple Clouds–both public and private–and do so using the same design methodology, the same set of automation tools, and the same set of control and security features throughout.
We also offer a very rich library of configuration assets—server templates. That is key to our success. What makes us really unique is the methodology with which we approach Cloud deployment and Cloud automation using server templates. You start by defining an environment on the RightScale platform layer, then server templates will automatically configure instances in entire systems on both public and private Clouds, while maintaining complete flexibility, transparency and control for the end user.
Because of that, we’re fortunate to have a very large and very broad set of customers that include everything from small startups that have yet to buy a single server and are immediately going to the Cloud, all the way to Fortune 500 companies, like Eli Lilly for example, which are starting to move more production workloads over to Cloud-based architectures.
We’re also the engine of the platform behind the largest deployment in the Cloud today in the world, so companies like Electronic Arts, Zynga, Sony Music…a lot of the very popular applications and a lot of the best known case studies for Cloud computing today are powered by the RightScale platform.
You don’t target specific vertical markets, but rather go to market in a horizontal fashion, right?
It’s very horizontal and it has been for quite some time as far as the customer types go. What we do see strong clustering around is a variety of different use cases. For example, gaming—particularly casual games and more and more MMOs and MMOGs [massively multiplayer online games] are very common Cloud use cases. Mobile applications—we see a lot of activity on mobile applications. Video–rendering, transcoding and encoding video–we have a lot of customers that do that on the Cloud. We have a lot of customers that do software development and tests.
And then a very recent use case that we’re seeing adopted more and more with larger companies, enterprise-class companies, is what’s being called self-service IT—that is, they’re using RightScale in the Cloud to dramatically accelerate the time it takes to procure, configure and deliver IT resources within their organisations. That’s changing the whole way IT is being procured and consumed within large organisations—by using the server template configuration that I mentioned and going by Cloud-based architectures.
Talk about the public and private Cloud adoption ratio with reference to your customers. What is it today and has it changed since 2007?
Right now, they’re predominantly public Cloud users and we see that market continuing to grow very rapidly with new entrants to the infrastructure as a service Cloud space. Amazon has really been without peer for quite some time but now there’re major operators–most recently Tata Communications–who are coming online, offering similar services and have the promise of delivering similar if not greater scale than Amazon. We’re seeing public Cloud adoption accelerate dramatically all over the world, as more and more of these infrastructure Clouds become available.
The private Cloud phenomenon is fairly new. That has been an interesting initiative that customers have talked about for quite some time but it has not really been until the last 12 months that we’ve seen that become a reality. The market there is getting very interesting. There are several technologies now that are proven. Most recently, it’s worth noting Cloud.com has really demonstrated the ability to provide an enabling technology to allow both public and private Cloud operators to use their software to connect with Clouds like Amazon’s.
Organisations can take software like Cloud.com, deploy it internally in their own data centres, and register and integrate their private Clouds with RightScale management so that they get the best of both worlds. They get a hybrid environment where they can take advantage of public resources such as Amazon for things that require significant scale, things that they may want to do under a different cost structure, things that are highly elastic. We have many customers now that are deploying private Clouds based on technologies like Cloud.com and Eucalyptus. They are registering them and using the RightScale management system to manage that alongside their Amazon deployments.
Are you an Amazon partner?
We are. We have been working closely with Amazon for four and a half years now.
Did you start out primarily helping Amazon customers?
Yes, and that’s largely due to the availability of other Clouds. RightScale’s has been a multi-Cloud platform for a long time. We announced our multi-Cloud platform…it’ll be three years ago this Fall. What has taken a bit longer than originally anticipated was the availability of other viable infrastructure Clouds. But that is changing. The business has changed considerably over the last six months where you have major providers such as RackSpace, Tata and Microsoft with Azure, who are delivering infrastructure Clouds and making those available within the RightScale platform.
What kind of potential do you see in RackSpace in the next three years or so?
I think we’ll see a lot from RackSpace in the future. The service providers that can deliver for customers both physical managed hosting services and infrastructure Cloud services similar to Amazon solve a real problem and offer a real value proposition to the marketplace because the reality–and this is something that we heavily encourage particularly large customers to really understand and take a look at–is that not every application is right for a public infrastructure Cloud.
You have to look at it as an entire portfolio. The benefits that companies like RackSpace and Tata can make available to their customers really come from the best of both worlds. Workloads that need to stay in the more traditional bare-metal managed hosting environment—they have a service to offer them. And those that can take advantage of these private and public Cloud like architectures—they can offer those as well.
What is considerably challenging however, which is where RightScale comes into play, is to take advantage of those three different types of resource pools. You have to have some management system that can provide consistency as far as deployment methodology, configuration assets, user management and control across those three resource pools goes, or you’ll fail to take full advantage of the business objectives these resource pools are supposed to deliver.
I think there’s a lot of promise in RackSpace and what they’re doing. And certainly they’re not alone. There are many different providers of a similar nature that have a great opportunity to fill a real need in the marketplace.
Which type of Cloud do you see being more commonly deployed in the next 12 months or so?
Without a doubt—hybrid. We see more and more trends leading to hybrid than anything else and I think there’re a few things driving that. The first is the very obvious one, which is very few companies truly differentiate themselves based on IT. So the more commoditised IT resources become and the more companies realise that IT in general no longer needs to be a hurdle of any kind–and there no longer needs to be a procurement hurdle, provisioning hurdle or management hurdle on an ongoing basis–they’ll start to look at their applications hurdle differently.
That’s going to also cause them to realise that operators like a Tata, an Amazon or a SingTel are operating on a scale that is virtually impossible for even the largest enterprise organisations to mimic or to compete at. They just simply can’t operate at the same global scale and therefore the service providers will be able to provide them with a much better alternative than as if they were to do it just on their own via a private Cloud approach.
However, the need to have a Cloud-like environment within your four walls–for compliance, geo-location or security reasons–is not going to change any time soon. Because of those issues, you’re going to see hybrid predominate the space.
Talk about the evolving Cloud needs of your customers in the year ahead.
On a global basis here, there’re several key drivers causing some fairly significant expansion in no particular order.
A lot concern requirements around specific locations within different regions of the world and those can be for latency and performance reasons. We see a lot around compliance and data privacy laws; if you have to operate in a certain country and conform to their standards, you need a Cloud resource pool that’s available there.
Price is becoming more and more of an opportunity for customers to essentially shop around. Competition is emerging in the infrastructure space. Because of that you’re seeing a lot of global expansion with these Cloud consumers into other regions of the world.
Another key need is around further automating and further abstracting away the feature and functionality that aren’t necessarily dependent on a particular resource pool. And what I mean by that are things like user security, user rule, user permissioning, reporting and billing, and configuration management.
What’s critical to these customers is that as they take advantage of more Clouds, they’re not asked to change the way they’re already doing things on Amazon. That is driving a lot of expansion with RightScale as well—customers who are used to and happy with their current Cloud deployments are now looking at larger deployments, deployments in other areas of the world, and deployments at different cost structures, but they want to continue utilising the same set of tools, features and functionality on the RightScale platform, as they do so.
The final thing that we see driving expansion in general–and this is kind of how the pie increases, if you will–is that more and more application workloads, and more and more use cases being proven on the Cloud and moved over. That is a trend you will see continue for quite some time as customers start to realise the benefits in other areas of the business that they may not be focusing on today.
Give us a breakdown of your global business by geography.
The majority of our business is still out of the US. We issued a release in December or January [with some of these numbers]: about 70 percent of Cloud consumption on RightScale and our customer base is in the US. Of the 30 percent that is outside of the US– that is international–we see a little over half coming from the APAC region. And that is the fastest growing region in our portfolio.
There are a few key drivers for that. One is: we see APAC and Singapore specifically as a real hub of activity around many key customer segments within RightScale’s portfolio, particularly gaming, both social games as well as MMOs and MMOGs. There’s a lot of that kind of activity coming out of Singapore.
Another area that we’re seeing as a real catalyst to growth is that made up of connectivity and data centre availability within Singapore. It’s quite extraordinary, the ability in Singapore to locate operations and focus a strategy on Singapore that effectively can serve a region much beyond. That is very, very attractive to companies like RightScale, which are growing rapidly but still have limited resources. That’s another growth driver within the APAC region and Singapore specifically.
Last but not least, you have the existing presence of major operators. Amazon has had its Singapore operations running for about a year now. With Tata launching now and many other providers rumoured to be starting operations in Singapore, it’s a very exciting time for the market for sure, and I expect that’ll continue.
Tell us about your APAC operations.
We first started looking at Singapore about a year ago. My CEO and I made a trip down there to do some due diligence on the market and to look for some opportunities and to look at different opportunities for RightScale to set up operations there. We set up our subsidiary in Singapore about nine months ago and hired our first employees and so in Cloud terms–Cloud years are like dog years and so in Cloud years–we’ve been operating there for quite some time now. What we have in Singapore today are resources focused on sales and business development, solution architects, and some of our other more technical resources that help customers solve really complex problems.
We have several key partners who are basing operations for Asia Pacific in Singapore as well, specifically Amazon and Cloud.com. Both have operations set up in Singapore. It’s a real growth market. We’re going to be looking to add several resources to RightScale as fast as we can find the right talent. We’re going to be looking to add developer talent, sales and business development talent, sales engineering personnel and solutions architects.
Just recently, we’ve even been taking some of our US employees and having them focus more specifically on Singapore as well. You can expect a lot more visits from our headquarters as we start to expand operations and one of my sales representatives, who’s going to be [visiting Singapore with me periodically] to take a look at our operations there and see what we can learn and bring back to the US.
How do you see the Singapore office growing?
Right now, we have two people on full time. We also have a strategic advisor in Singapore. In total, that’s three. I expect that number to grow to about 12 within the next 12 months.
Do you intend to open offices elsewhere across Asia?
Singapore is our APAC hub. We have carved out Japan as a separate region and we just established a subsidiary in Japan, RightScale Japan KK. It serves Japan only. We have another two employees in Australia, but we leverage the Singapore hub to service that geography. The rest of APAC, including China is being served out of Singapore. We’re going to focus on serving that out of Singapore for the foreseeable future.
Are there trends unique to your business in Asia that you have identified and intend to leverage to grow RightScale?
Yes, there are a couple key trends we see specifically within Asia. One, just in general, is that Cloud adoption is still very early worldwide. The tremendous growth of RightScale and services like Amazon aside, the market as a whole is still very young.
With the availability now of viable Clouds in Singapore–by Amazon, Tata etc–the same services that US customers have experienced for the last two years are now available in the region within Singapore and Southeast Asia.
I think first you’ll see significant adoption stemming from enterprise use of scalable web applications, social networking and gaming. Those tend to be where early market adopters come from as far as use cases are concerned because the Cloud offers a very, very attractive alternative to these highly elastic games. You’ll see adoption there immediately. In fact, it’s already starting to happen.
You’ll see mobile devices, rich media and video use cases follow suit immediately after, because, again, the Cloud offers them a set of business value propositions, economic propositions that make solutions, which weren’t possible before, available to them to now. And because a lot of those apps are latency sensitive, you simply cannot deliver the same type of experience if you do not have the infrastructure resources within the same geographic region. We expect a lot of adoption from those categories initially.
Also what I would anticipate happening–because we’ve seen this elsewhere in the world, and we have no reason to believe it will be any different in Singapore–is the emergence of two other key categories. You’re going to see more enterprise-oriented companies, enterprise-class large companies with many users making up many divisions starting to look at Cloud, particularly hybrid Cloud, as ways to provide their businesses with the high agility that was unheard of before. The ability to procure resources, and provision and configure them in a matter of minutes, instead of weeks to months, is going to prompt these organisations to adopt the Cloud.
Lastly, we’re going to see action among system integrators. They obviously play a very important role. We see these system integrators expanding their scope of services to include helping customers actually deploy and manage Cloud infrastructures at the lower levels, and then making those infrastructures available in management systems like RightScale. That’s because of the big need companies have to be Cloud-enabled as they transform and modernise their data centres.
What RightScale’s doing to address all that is a combination of very aggressive staffing and partner programmes. Worldwide, we’ve been more than doubling our headcount every year. We’ll be adding a lot more personnel resources, particularly in areas around business development, solutions architects, service engineers and developers. We’re also going to be partnering more systems integrators as well as expanding solutions with our current partners like Cloud.com and Eucalyptus to give these organisations bundled solutions that enable the deployment of hybrid Cloud technology in their own data centres.
How large is your organisation globally and how do you see that number growing in the next three years?
Three years is really a guessing game. Right now we’re 150 worldwide and we have been on a growth curve that has been more than doubling each year. We have no reason to believe that will do anything but continue. In fact, I expect it will accelerate further. Doubling is certainly reasonable.
Probably the more important growth figures to your point are what we see in actual consumption. We’ve just past 2.1 million servers that have been launched and managed using our platform and our VP of engineering a few weeks ago released a stat during a webinar that RightScale’s platform at the base levels–a minimum number of servers of any given hour that RightScale is managing–is now 70,000.
It burst dramatically above that for these peak demand workloads, but if you think about the level and the scale that the Cloud is operating at today, it already is at a significant scale—70,000 per hour as before is quite remarkable compared to where it was even just six months ago.
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