Virtustream is one of the most successful - yet least well known - public, private and hybrid cloud computing vendors in the market. While it doesn't have the brand name recognition of the giants of this industry, such as the Amazon Web Services, Microsoft's and Google's of the world, it does have the accolades.
In Gartner's recent Magic Quadrant report it named the company, which began in 2008 and is headquartered in Washington D.C., one of the top 15 revenue-producing IaaS vendors. It received the highest marks out of the vendors analyzed for security and compliance. While it doesn't release revenue figures, it is growing by triple digits annually and was positioned overall mid-pack among its competitors by Gartner. For a 6-year old venture-backed company to be rubbing elbows with some of the big wigs of the industry isn't bad.
Virtustream is taking a unique approach to this market - one decidedly different from the AWS's and Microsoft's of the world. Instead of a massive scale, credit-card swipe, pay-as-you-go virtual machine and storage service, Virtustream wants to act as a consultant with its customers. It revels in complex workload migration into the cloud.
Co-CEO and CTO Kevin Reid describes it like this: You can't just walk into a bank and deposit $100,000; the financial institution would ask questions, making sure the money is not laundered or gained from some illicit activity. Similarly, Virtustream doesn't just allow customers to swipe a credit card and get access to hundreds of thousands of virtual machines holding sensitive data of its large enterprise customers. "We want to know our customers," says Reid, who used to manage a consulting firm that was bought by Capgemini before working at Virtustream. "We run more of what could be considered a community cloud, or a country club cloud. None of the workloads in our cloud are unknown to us - we know where they came from."
Such an approach comes with pros and cons. On the plus side, Virtustream in the past few years has grown up to be one of the leading IaaS providers for enterprise workloads, specializing in complex migrations of workloads, especially SAP and other database applications. On the downside, the company is not AWS, Microsoft, Google, Rackspace, Verizon or VMware - the companies known to be the major vendors in the IaaS market. It's a position Virtustream is trying to balance: Continue to serve its bread and butter customer with a hands-on, consultant-led approach to large enterprise users, while also attempting to grow its base.
The hybrid game
Virtustream's platform is based on custom software it has developed named xStream. It's a cloud management software that the company sells to both enterprises and service providers to build clouds, and it's the same software that the company uses as the basis for its public cloud. Similarly to how Microsoft and VMware offer customers a common software for public and on-premises private clouds, Virtustream does the same with its xStream platform. XStream sits above the hypervisor, but most customers use it with VMware's hypervisor.
The company has some unique features as well. Virtustream offers what it calls application-level service-level agreements (SLA). Whereas most providers offer infrastructure availability guarantees (a promise that the service will be up some percentage of the time during the month), Virtustream can guarantee that customer's applications that it hosts are available.
Virtustream also charges customers based on a consumption model of pricing. Most cloud vendors, specifically AWS, charge customers based on resource allocation, not how much is actually used by the customer. A user could spin up a VM for six hours, and not use it, but pay for all six hours of its use in Amazon's cloud. Virtustream's micro-virtual machines are metered in five-minute intervals; only if the VM is being used will there will be a charge.
In an effort to define itself as a major player in the increasingly competitive IaaS market, Virtustream is adding features to appeal to a broader audience. This week the company announced that it has enabled geofencing, which is dictated by the Intel chips that it runs its cloud off of. These chips can be programmed to not allow workloads to run in certain geographic regions. The move is basically an enhanced security feature that ensures customers where their workloads are hosted across the company's data centers in the U.S., U.K and Amsterdam. Intel is an investor in Virtustream.
The company's xStream platform also added support this week for OpenStack. Reid says down the line even bigger changes are coming. Specifically, the company hopes to unveil a credit-card swipe virtual machine onboarding service. It will be housed in a completely isolated area from its current customer caseload though, he adds.
In reviewing the company, Gartner summed it up:
"Although Virtustream supports a solid set of self-service features, it primarily targets complex, mission-critical applications where it is likely that the customer will purchase professional services assistance for implementation, and managed services on an ongoing basis. It does not have the resources to compete for all workloads against providers whose greater resources allow development of much broader product portfolios. Rather, it provides deep and differentiated capabilities in its focus areas."
For companies that want not just a service provider, but a consultant in deploying the cloud, Virtustream is a compelling option.
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