7 Cloud Computing Acquisition Targets

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It always hurts a tech company’s feelings to be called an “acquisition target.” Oh no, protests the small fish, we’re not in business to be gobbled up – we’re going to succeed in our own right.

While that hope may be sincere, big obstacles loom before a tech firm can call itself “entrenched.” Nowhere is this more true than in the crowded field of cloud computing vendors. These young companies face a cruel rule of the cloud business: the future of cloud computingwon’t be ruled by small players.

It’s the big boys who will be victorious in the emerging cloud computing market. Success in offering remote computing leans heavily toward bigger-is-better: more servers, bigger networks, more complex managed services.

In 2009, however, being a small fry is great. Now is the time when anyone with an idea and a few bucks can jump in. But the window is short. By, say, 2012 or so, it’ll be clear the winners are the likes of Amazon, Google, IBM, Microsoft, Salesforce. When a CTO tells the CEO which cloud provider she picked, it better not be Barney’s Server Hut.

The good news for small cloud vendors: Today’s hulking titans will grow into still bigger hulking titans by devouring talented upstarts. (In fact, the tech titans will likely devour everything. No word yet on when Google will buy the state of California.)

As the giants look around for tasty targets, the following seven cloud companies are desirable choices. Each is a bright up and comer with something to offer. Each is basking in the glow of positive buzz.

And, of course, one never knows…maybe one of these young cloud firms will itself start snapping up its colleagues. Any one of these outfits could someday be a household name. In the rapidly churning cloud market, the future is impossible to predict.

1) GoGrid
2) Enomaly
3) Vaultscape
4) Longjump
5) RightScale
6) AppZero
7) Elastra
RELATED NEWS AND ANALYSIS

1) GoGrid

Forget Amazon or Rackspace – GoGrid wants to host your enterprise data on its Xen-based servers. The company’s chutzpah is impressive: it actually places a comparison chart between itself and Amazon EC2on its homepage, which – based on brand awareness – is sort of like David comparing himself to Goliath.

By the looks of its pricing chart, GoGrid has very deliberately aimed at undercutting Amazon’s prices, down to the penny. According to GoGrid’s reckoning, its cloud infrastructure services offering saves you about $600 a month over Amazon’s.

GoGrid’s menu of services is extensive, ranging from standards like load balancing to a nice touch like managed compliance audits. It touts its straightforward user interface, which helps small business owners manage their remote infrastructure without in-house IT staff.

GoGrid is a division of San Francisco-based ServePath, founded in 2001. ServePath also owns Upstream Networks, a content delivery network, and ColoServe, which provides collocation services.

2) Enomaly

You have to give Enomaly credit: it launched way back in 2004, when “cloud” was hardly a popular buzzword. The core idea, too, shows real savvy: Enomalys’s Elastic Computing Platform(ECP) allows companies to create their own private cloud. On the other hand, ECP also provides companies with a bridge to external cloud hosting. A Web hosting company, for instance, could use ECP to tap into the growing demand for cloud services, offering its clients a virtualized public cloud.

Founder Reuven Cohen blogs at ElasticVapor, a good read to help follow the industry – more than a marketing tool. Cohen, something of a ‘cloud theorist’, has founded or help found a number of cloud-related organizations.

Here’s a trophy for the company: The open source edition of ECP was SourceForge’s Project of the Month in August 2008, a considerable honor given the volume of development at SourceForge. (The community versionof ECP is a free download.)

The problem, of course, is that ECP isn’t the only such solution. For instance, take a look at Elastra (see below) or Virtual Iron (which itself was recently bought by giant Oracle) as a small company offering a cost effective similar solution. Only time will tell how these many competitors will shake out.

Next Page: Hybrid cloud computing, data storage…

3) Vaultscape

You probably thought SaaS stood for “software as a service.” Yet in Vaultscape’s view it’s actually “Storage as a Service.”

A cloud-based archival service, it promotes itself as a highly reliable – “bank grade” – storage service that offers a connection via a straightforward REST-based API – which is private, not public, for obvious security reasons.

Vaultscape offers deep security. It provides VPN Tunnel connection for the user dashboard; a two-way SSL Site Certificate and AES/Twofish electronic security Key; and three levels of access protection. (Yes, its secure datacenter is designed with biometric, visual anddigital login security, with enough industry certifications to impress even the most paranoid CIO.) With that much of a moat, James Bond himself couldn’t break in.

The company claims its prices are “up to 50% lower than tape,” but price is the weakness of any competitor in the field. Why? Because storage, no matter how advanced, tends to be a commodity. If one vendor can offer it at X dollars per terabyte, the next vendor can undercut them by 5 percent less. And a giant vendor can leverage economies of scale.

So how, precisely, will Vaultscape distinguish itself against the deepest pocketed competitors? That’s hard to say, but a vendor who’s built a large enough client list is always an attractive purchase.

4) Longjump

Some companies get anxious when they consider cloud computing, especially bigger companies. No matter the cost advantages, the idea of letting sensitive data outside the firewall sends up red flags – with good reason.

Longjump’s Business Application Platform (BAP) addresses this by offering an on-premise, private, cloud-based application platform. That means mission-critical data can be pooled, cloud-style, behind your secure firewall, letting execs and managers create and share composite applications with mix-and-match data sets.

And – for those adventurous clients – the company also supports hosting its solution on external platforms like Amazon’s.

Among other uses, Longjump is leveraged by developers who want to bring to market an extensive multi-tenant application, without building their own platform. (Think, for instance, of the way that Salesforce’s Force.com offers a development platform.) So ISVs and other service providers can use Longjump to sell SaaS offerings.

In other words, Longjump is a Platform-as-a-Server (PaaS) provider. Or, more accurately – warning, here comes deep jargon – it’s an APaaS, an application-platform-as-a-service play. This is because the Longjump solution offers a virtualized application development platform.

If that’s not enough cloud acronyms for you, in January 2009 LongJump also unveileda DaaS (database-as-a-service) solution. This service competes with the likes of Amazon’s SimpleDB service.

5) RightScale

If you can’t beat ‘em, join them. Or at least hop on board the cresting wave. RightScale, which offers a cloud management platform, makes it clearly on its homepage: it enables firms to “create Web solutions running on cloud providers such as Amazon EC2.”

Translated: we may be a small company, but we help you interface with the big, established names in cloud computing. (It also supports GoGrid and Flexscale cloud hosting, and has an alliance with Rackspace.) That sounds like a workable strategy to stay afloat as the cloud market evolves toward major players.

Amazon itself, however, might suggest that no such third party solution is needed to manage your cloud on its servers. But RightScale scored a major coup: its Cloud Management Platform supports the “technology preview” of the Ubuntu Enterprise Cloud (in conjunction with Eucalyptus, an open source cloud project that recently received venture funding).

This Ubuntu-RightScale partnership will enable companies to manage private clouds within their own firewalls. Or companies can use hybrid clouds, combining externally and internally hosted resources.

Ubuntu isn’t the only outfit to believe in RightScale: earlier this year the company scored $13 million in series B venture funding. Given the gloomy headlines, that’s very nice piece of coin. Another point in its favor: former MySQL Marten Mickosjoined the board of directors, a development that might help funding. (Where Mickos goes, money tends to follow.)

Next Page: Cloud computing and freedom from the OS

6) AppZero

It’s an intriguing offer: for companies that want to move onto the cloud with minimal fuss, AppZero touts itself as the “on-ramp.” AppZero’s software virtualizes Unix or Windows server applications, allowing them to move onto the cloud – without being locked into a specific provider. Think of it as app mobility.

AppZero enables a firm (or developers) to move their applications between a number of servers, on to the cloud or back from the cloud.

AppZero offers a Virtual Application Appliance(VAA), a solution that packages server apps separate from their underlying OS, which allows them to move to new environment. It’s a pre-integrated, self-contained unit. AppZero creates, controls and maintains these VAAs.

This “freedom from OS” is a pretty nifty idea, but, looking to the future, won’t the big cloud providers offer this service too? Will a company need to contract with AppZero for this functionality? And if a company commits to, say, Amazon as its provider, will this type of mobility be so compelling?

Perhaps Boston-based AppZero’s greatest value will be to keep providers of proprietary environments on their toes, knowing how easy its customers can leave. And the company scores points for being leading edge. It released a Windows versionof its server application tools in May 2009 – before Microsoft itself did. (Microsoft says it is working on a similar tool but isn’t yet ready with it.)

7) Elastra

Even as cloud computing emerges as a leading solution for corporate computing, confusion reigns. Companies think of the cloud in two very different ways. There’s an internal cloud – pooled resources in the in-house datacenter – and an external cloud – software accessed over the Web.

Elastra, a vendor of enterprise cloud management software, provides a bridge between these two worlds. Its solution helps companies move applications between their in-house clouds and remote hosted clouds on services like Amazon EC2.

Clearly, offering companies this bridge between private and public clouds is the sweet spot for success in the current cloud market. Few if any companies will want to exist solely on a remote server or only on their internal infrastructure. The demand for this bridge will only grow in the years ahead.

The challenge for Elastra, of course, is that it’s not the only company that realizes the attractiveness of this hybrid approach. The giant VMware in February elaborated a Virtual Datacenter approach that will “help enable companies to achieve the benefits of cloud computing internally, and bridge to external clouds through a private cloud.” Sounds familiar, doesn’t it?

Of course VMware’s approach ties a company into using VMware, which may provide an opening for smaller, vendor-neutral cloud providers like Elastra. On its front page Elastra proudly touts “Cloud Computing: Don’t Get Locked In to Any Vendor.” Take that, VMware.

As a feather in its cap, Elastra was recently named an InformationWeek “Startup 50” company to watch.

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