Web Hosting Interview - CloudSigma July 2010

Web Hosting Interview - CloudSigma July 2010

Patrick Baillie, Co-Founder and CEO of CloudSigma AG

HostSearch interviewed Patrick Baillie, Co-Founder and CEO of CloudSigma AG - an innovative Swiss based Infrastructure-as-a-Service (IaaS) provider. The company provides high availability, flexible cloud servers and cloud hosting.

  • HOSTSEARCH: Patrick, thank you for giving us an opportunity to sit down and talk with you like this. First question: how did you start CloudSigma?
    PATRICK BAILLIE: Both myself and my co-found Robert Jenkins both starting using infrastructure-as-a-service offerings about 18 months ago. What we quickly realized was that they weren't delivering on their promises. There was a big difference between what we knew was possible with the right approach and technology and what was being provided at that time. We decided to found CloudSigma to deliver the most open, flexible and transparent platform possible.
  • HOSTSEARCH: I really like your company logo. What's the meaning of it?
    PATRICK BAILLIE: We wanted a simple logo that pulled together what we stand for. The logo is two Cs forming an S which are the first letters of the main components of our name CloudSigma. The logo stands for compatibility and openness. Combining components to form a different whole. We also chose the colour green because we have a strong commitment to low impact computing. We have a comprehensive three step environmental policy of avoid, reduce and offset. As a result we are able to offer the world's first and only carbon neutral cloud computing.
  • HOSTSEARCH: What technology of hardware and software were used to develop Cloud environment at CloudSigma?
    PATRICK BAILLIE: The main aim of our company is to push infrastructure-as-a-service towards a true utility computing model so we employed technology that allowed us to do this. In terms of hardware we use custom built servers designed to meet our specific needs as a public cloud provider, these are very different from your typical enterprise environment. This extends to networking also where we have to employ quite different methods to cope with the myriad of uses our customers employ our cloud for. One key aspect is redundancy and failover. We offer a 100% service level agreement and we are able to do this because our cloud is built from the ground up to provide high availability. That means our servers, racks and cloud level infrastructure are all designed to not lose availability.

    On the software side we use the open source KVM hypervisor as our base virtualisation platform. Actually this technology is completed abstracted from the user and we have built on top of this a custom API and interface that makes managing computing resources very easy and intuitive. This was another issue we had with previous cloud computing offerings. They weren't very user friendly, often inventing a whole new vocabulary that just wasn't necessary. Our approach is to keep things simple and straightforward so users can get up and running as quickly and easily as possible. To achieve this we developed an innovative web console. It is effectively a very powerful resource management tool wrapped in a web browser. We've adopted a desktop structure and we find most users can just get started immediately on first login. We combine this with a full API that means more advanced users can likewise manage their account remotely and even automatically using scripting.

    All this comes together in our company motto, 'freedom through technology'. Its about opening up new possibilities, not using proprietary methods or trying to lock people in.
  • HOSTSEARCH: I noticed your cloud is housed in the data centre in Switzerland. What's special about it?
    PATRICK BAILLIE: We made a very deliberate choice to place our first cloud availability zone in Zurich, Switzerland. Firstly Switzerland itself boasts one of the most comprehensive legal structures for data protection and confidentiality in the world. All our customers benefit from this. People understand Switzerland as a stable and reliable partner for their data which is why we attract customers form all over the world. Secondly, Zurich has an amazing number of connections to the rest of Europe and beyond. We chose Interxion's carrier neutral data center so we can benefit from that. In our data centre we are able to connect and peer with over 35 different carriers. The benefit to our customers is lower latency faster networking, a performance IaaS platform that is responsive. Finally Switzerland's electricity grid is one of the most reliable and clean in the world. Many outages occur because of unreliable power supplies which isn't a problem we face. Likewise over 95% of electricity is generated from low or no impact sources in terms of climate impact. That goes a long way to achieving the low impact computing which is part of our company's philosophy. Our data centre builds on this by being one of the most efficient multi-tenant locations in Europe and still offers us reliable UPS backed dual power supply and high security.
  • HOSTSEARCH: Do you get many European customers? How about American and Asian customers? What is your customer portfolio look like?
    PATRICK BAILLIE: Many people would be surprised; we have customers from all over the world. I'd say about half of our clients are from Europe with the rest evenly spread across the rest of the world. We have users from Japan, Australia, Brazil, the US, India etc. The beauty of cloud computing is that location becomes less of a factor in terms of proximity to where you are. Unless you are doing some very specific tasks needing ultra low latency, you can look much further afield to find the product that is just right for your needs. The combination of our location in Switzerland and our technology is highly appealing to customers from all over the world.

    The nature of the cloud is flexibility and scalability. We have customers who are just starting out, forming a new company or running a small business. They like our platform because it saves them money, they don't need to make upfront investments as they could with traditional hardware and, if their business takes off they can easily scale up with it.

    At the other end of the scale are larger enterprise customers; they generally are attracted to the high degree of control our platform gives them over the alternatives. They usually have a high degree of technical expertise and so they appreciate the ability to really customise and control their cloud infrastructure. Likewise they make real savings in terms of removing hardware maintenance tasks and long procurement procedures. Some IT professionals still see cloud computing as a potential threat to their jobs but actually the opposite can be true. By outsourcing mundane low value tasks such as hardware and network maintenance to CloudSigma they find they release human resources to concentrate on high value strategic work which makes them more not less valuable to their organisations.
  • HOSTSEARCH: What threats did you find in marketing cloud hosting business in 2010? Do you think your brand has been well recognized well in the Cloud market?
    PATRICK BAILLIE: There are two key problems currently in terms of marketing a cloud computing product. The first problem is that there is a great deal of confusion in the market about what cloud computing is. This is largely due to many companies with traditional hosting solutions portraying them as cloud solutions which they aren't. This causes a lot of confusion as well as disillusionment for customers. The second problem is that a number of large incumbent players have a huge vested interest in the status quo. The situation is very much like the e-commerce boom of the late 90s. If you read the press you see the debate dominated by problems, security concerns etc. etc. yet the reality is huge growth in cloud computing. There is a reality disconnect. I also think that a lot of the criticisms of cloud computing are more to do with offerings to date rather than inherent issues with the concept.

    In terms of our brand, we are a new player but already see good recognition at events and speaking engagements that we are involved in after a relatively short time. I think our approach of putting the control with the customer is a major differentiating factor.
  • HOSTSEARCH: What kind of marketing tools do you use to promote your services? Do you use Twitter, Facebook and other social media tools?
    PATRICK BAILLIE: We use both Twitter and Facebook although thus far we have really seen the most engagement via Twitter. A lot of our customers are quite tech savvy and they generally seem more attracted to Twitter. Also Facebook is more of a consumer website. We do expect to build up our Facebook presence over the coming months. You can visit our Twitter account at http://www.twitter.com/CloudSigma , our Facebook page is at http://www.facebook.com/pages/Zurich-Switzerland/CloudSigma/205699267963?ref=ts&__a=19

    In addition we actively engage in discussions on cloud computing focused groups, on leading blogs as well as maintaining our own blog at http://www.cloudsigma.com/blog
  • HOSTSEARCH: Shared Hosting in early stage was like $20 a month and it's now around $5 a month or lower. Do you think the price of Cloud will drop due to the competition in the market?
    PATRICK BAILLIE: There are two factors here. Due to Moore's law you will see dramatic falls in the cost of computing resources on a unit by unit basis, that will happen naturally. Saying that there is a lot of scope for price reductions through increased competition. For example, Amazon charge a standard unit price of $0.15 for a GB of outgoing bandwidth. We charge $0.0585 for the same GB of outgoing transfer. Amazon are much much larger than us and bandwidth is a volume business which means they get their bandwidth at a significantly lower cost than we do. I can tell you we make a healthy margin at the price level we charge. What does that tell you about Amazon's profit margin charging more than twice as much? We also offer free unlimited incoming bandwidth.
  • HOSTSEARCH: What can we expect from CloudSigma in 2011?
    PATRICK BAILLIE: We are continuing to iterate our offering rapidly. We roll out updates on a weekly basis. In terms of general direction we'll be incorporating more collaboration tools, we'll be continuing to develop our ecosystem of partners that support our core product and we'll also be adding more cloud locations in markets currently under served.
  • HOSTSEARCH: Can you predict the future of Cloud hosting business for the next 5 years from now?
    PATRICK BAILLIE: Well I don't think there is a lot of value in making long term predictions in the technology sphere. The nature of technology is rapid change, sometimes in an unpredictable way. I would say that barring any dramatic developments we'll see the vast majority of computing move from traditional infrastructure onto cloud computing platforms. There will also be a general shift from private to public cloud computing as product offerings mature, as public clouds get bigger and cheaper and as the corporate world becomes more comfortable in general with the concept.
  • HOSTSEARCH: Patrick, thank you so much for the talk today. We look forward to see your success.

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