Contegix, St. Louis based managed hosting provider morphing into a cloud provider, this week unveiled their cloud strategy with the introduction of their Miracloud platform. Contegix is offering a public cloud service with a twist. Unlike Amazon Web Services who offer a self service cloud solution, they offer tiered cloud services where the lowest tier, targeting individual developers and smaller shops, offers an unmanaged self service solution and their enterprise tier offers a managed cloud solution with certain features like HA which are considered important for enterprises plotting their way to cloud. Like AWS, they offer their services on the hourly basis with discounts offered for monthly payments.
This announcement is particularly interesting for me because I had a chance to talk with them when they invited me to talk at their cloud event earlier this year (there you go, my disclosure statement). At that time, their cloud plans revolved only around VMware’s solution and I even remember asking their CEO if this VMware centric approach is cost effective in the AWS dominated cloud world. With Miracloud platform, they are taking a multi-pronged approach with VMware cloud solution supporting their enterprise class cloud offering high availability features like live migration, fault tolerant VMs, etc.. Then they have a convenience class and business class based on KVM and Xenserver respectively. There is a difference in the SLAs they offer between the low end plan and business plans.
I root for VMware’s CloudFoundry in this blog and I even highlight the High Availability features in their solutions during my conversations and tweets. However, I was never convinced about the effectiveness of VMware in getting the service providers to offer public clouds based on their technology. With a price based competition in the market lead by AWS, it is not possible to sustain a commodity public cloud offering using VMware technology. The only way VMware based cloud service providers can differentiate themselves from the low cost offerings is by highlighting the enterprise grade features for companies wanting to avoid the “design for failure” idea.
I think Contegix understood this reality and smartly tapped into open source solutions for offering lower cost clouds. As traditional hosting companies evolve their strategy into the cloud world, they will have to make some hard decisions on how they are going to differentiate, whether in terms of pricing or enterprise features. Contegix took a middle approach and are trying to cater to both kind of audience. As more and more service providers move into the federated cloud ecosystem, it will be interesting to follow their strategy. If you are a hosting company with cloud plans, get in touch with me. I would like to hear from you about your story.