Virtustream, a fast-growing enterprise cloud provider, is buying cloud-computing pioneer Enomaly for an undisclosed amount. Enomaly, which launched in 2003, sells one of the first private-cloud management products, Elastic Computing Platform, and last year launched an infrastructure resource exchange called SpotCloud.
It’s the latter effort that fueled Virtustream’s desire to buy Enomaly, Virtustream CEO Rodney Rogers told me. His company, which offers an infrastructure-as-a-service cloud tuned for enterprise applications such as SAP, recently productized its management platform in the form of private-cloud software. He thinks SpotCloud includes some valuable code that will help Virtustream build its own federated cloud ecosystem.
“I think everybody is going to be racing toward some sort of federation solution here in the next few years,” Rogers said. The idea makes sense because it gives buyers an option to buy discounted resources (a la Amazon’s Spot Pricing instances) and gives sellers the ability to recoup sunk costs they don’t need.
That effort, called the xStream Exchange, should be ready in late-2012 or early 2013, after Virtustream is able to integrate the SpotCloud code and make some needed security upgrades. Virtustream CTO Kevin Reid said the xStream Exchange will initially include only Virtustream customers with excess private or public cloud capacity, but it could expand to trusted third-party service providers and possibly individual organizations over time. He thinks his company’s concept of infrastructure units — which it defines as “an extensible container of compute, memory, bandwidth and IOPS, smaller than a virtual machine” — will provide a better cloud currency than the standard server-based allocation model.
Rogers added that Enomaly’s success in establishing a customer base and a general presence in China was also very appealing. A large portion of Virtustream’s customers are Fortune 500 companies, and they have labor forces in China that they would like to support locally rather than regionally, he said. Virtustream already has a data center presence in Southeast Asia.
Rogers spent time in China recently working on some partnership deals, and says it’s “absolutely amazing the scale of what’s being developed over there” in terms of infrastructure and government support.
However, there is a different way of doing business in China, something Enomaly Founder and CTO Reuven Cohen knows well, and which could prove valuable depending on what role he takes at Virtustream. He likens Chinese business to a 1950s Mad Men-style environment, where the guy sitting next to you in the boardroom is smoking a cigarette and drinking scotch, and where personal relationships are king. Enomaly is probably better known in China than it is in North America, Cohen said.
As for Enomaly’s products, Rogers said Virtustream will continue to support their current versions, but their primary value is in the form of intellectual property to bolster Virtustream’s offerings.
I asked Cohen if he’s sad to see his SpotCloud and Elastic Computing Platform products go, for all intents and purposes, but he said he’s happy with the result. “As an entrepreneur, you’re building a company for value and to have a good exit,” he said, adding that it was eight years’ worth of good code that made his company sellable.
Still, timing is everything in IT, and Cohen says he has a “chronic weakness toward being early.” Some later cloud startups such as Cloud.com (now part of Citrix ) and Eucalyptus received much more attention, despite Cohen’s role as one of the early cloud evangelists. Being based in Canada and not raising venture capital didn’t help, either, but Cohen said he learned some things to do different next time.
Feature image courtesy of Flickr user AndyFitz.
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