Interoute drives network and cloud convergence with CloudStore
Analyst: Agatha Poon, 451research.com, 28 Feb, 2013 -
Pan-European operator Interoute had been known as a wholesaler in the network service arena, but it had a major strategy shift several years ago to focus on enterprise customers with the unified ICT portfolio.
The company notes its enterprise business now accounts for more than half the company's total revenue, with growing enterprise interest in various cloud offerings such as Virtual Data Center (VDC), which the company first introduced in early 2012. Taking unified ICT to the next level, Interoute has recently introduced CloudStore, which is touted as a converged compute and network platform with a storefront where customers can purchase computing, storage, appliances and communications services from one centralized location.
CloudStore: network + cloud convergence
The idea didn't come about overnight; Interoute's CloudStore has been in beta since late 2011. Today, CloudStore is refined after more than a year of testing and fine tuning. Although Interoute's CloudStore comprises some fundamental elements of a business app marketplace; e.g., storefront for ordering and service catalog and tight integration across its MPLS network, the VDC cloud platform and applications set it apart from other app store-like competitive offerings.
Interoute says it relies primarily on in-house expertise to achieve the level of customization required as opposed to deploying third-party cloud marketplace enablement platforms such as the ones provided by AppDirect, Standing Cloud and Parallels, among others, out of the box. CloudStore currently hosts a variety of infrastructure services, open-source applications and platform tools running on top of Interoute's virtual datacenter (VDC) cloud platform, which spans five geographical locations and is integrated into its MPLS network.
Just like any business app stores available in the market, various services, applications and appliances are grouped by category. At present, CloudStore has a service catalog of some 70 applications and services (some of them appear in multiple categories) from a couple of dozen vendors in nine major categories. Judging by the type of applications and services, the company appears to go after a diverse group of customers, including IT administrators, application developers, and enterprise users. Applications like DokuWiki 2012-10-13 are geared toward developers looking to work collectively on a website; Alfresco is aimed at both IT administrators and their internal users for content management capability and SugerCRM is a user-friendly CRM application for line-of-business managers. Operating systems such as Ubuntu and CentOS and databases like MySQL Server are part of the service catalog. Ethernet and SDN transport services are also available – in addition to a range of communications services.
CloudStore customers can order most of the services and applications from within the storefront, with the exception of professional services, which are handled by its partners. Once customers select their applications or services, they will be directed to the VDC Control Center, which is the management console for VDC deployments, to configure associated computing resources required for individual applications. The company touts that it all can be done in minutes as opposed to hours or days, and the user experience is consistently delivered as the entire stack – from applications all the way down to the network foundation – is tightly integrated, with built-in automation to ease the management of VDCs.
Virtual datacenter (VDC) offering
Positioned as a true IaaS offering, VDC complements the company's existing cloud offerings such as OraCloud (database as a service via its acquired asset Quantix) and Exchange Cloud. VDC is designed to be hypervisor-agnostic, although KVM and Hyper-V are the dominant choices according to Interoute. In terms of storage, the company works with multiple storage vendors, NetApp and others, to support multi-tiered storage architecture, with Hewlett-Packard for servers. The orchestration stack is a combination of proprietary and third-party technologies and it will soon be upgraded to a new version. Using the VDC Control Center, Interoute says customers can deploy their virtual computing and storage infrastructure with just a few mouse clicks and be able select from any of the five VDC zones – Amsterdam, Berlin, Geneva, London and Paris. It is also planning to extend the VDC footprint in Hong Kong and New York, where it has a point of presence (POP) for its pan-European network.
Target segment and customers
With CloudStore, Interoute is hoping to cash in on multiple user segments, including enterprise IT managers, SaaS providers, Web 2.0 companies and existing network service customers. Interoute claims over 2,000 enterprise customers and this surely presents an upsell opportunity for CloudStore in addition to the organic growth.
While most of its existing network customers are aware of the new offering, the company says the bulk of its opportunities, nearly 70%, are generated from Internet searches. It could simply be a timing issue, but Interoute has its work cut out to articulate the value of the converged cloud and network platform to existing customers. As far as market uptake is concerned, the company claims to have 150 customers using CloudStore in just under a month, with an average of 10-15 new customers on a weekly basis. This is quite an impressive start and shows broader use of cloud computing as a technology and delivery mechanism for ICT services. One of the features that led to the selection of CloudStore was the ease with which customers can, for the first time, self-provision infrastructure services and network components to match their business and IT requirements.
The idea of a cloud marketplace is well received in the telecom and hosting markets. KPN is pushing the app store model in both the retail and wholesale markets, while Orange Business Services is delving into the private app marketplace model. Deutsche Telekom, on the other hand, has partnered with AppDirect to deploy a SMB-focused app marketplace, in which the company is looking to differentiate itself from competition using an end-to-end approach – from connectivity and storage to billing. Hosting providers Terremark and Savvis are increasingly taking an integrated cloud delivery approach, leveraging network assets from their respective parent companies – Verizon and CenturyLink . Nevertheless, not all services and network components are accessible from a self-service menu.
When it comes down to driving virtual datacenter adoption, Interoute is up against a diverse group of IaaS players. Telecom incumbent British Telecom (BT), via its enterprise business unit BT Global Services, is taking the hypervisor-agnostic approach with its Cloud Compute offering. Telefónica has teamed up with Joyent to enable a cloud platform that is highly automated with full self-service capability. Last but not least, NTT Communications pursues its global cloud strategy with an SDN-enabled enterprise cloud offering that spans six datacenter locations in the US, UK and Asia-Pacific. As Interoute eyes opportunities in the SaaS developer world, it is likely to bump up against Flexiant, ElasticHosts and CloudSigma , among others.
The 451 Take
For Interoute, CloudStore is not just another cloud offering; it has helped the network provider to transform its business model in a way that would have been unthinkable a few years back. If delivering IT as a service is about giving users flexibility and control, the level of self-service capability will determine usability. Using an integrated service approach, Interoute may also be able to cash in on the fact that as more organizations invest in VDCs, they are looking to get more bang for their buck by running applications on top of the cloud platform.
One big trend to watch in light of the proliferation of the app store model is the crop of software startups and appliance vendors trying to infiltrate the traditional IT world with new business models and technology implementation, mostly based on open-source software. This seems to resonate well with Interoute's partner lineup as the company continues to build out its partner ecosystem.
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