Midokura Raises $17.3M In Series A Funding For Network Virtualization For IaaS

Today, Midokura announced the finalization of $17.3 million in Series A funding in a round led by Innovation Network Corporation of Japan with additional participation from NTT Group’s Venture Fund, DOCOMO Innovations Inc. and NEC Group’s Venture Fund, Innovative Ventures Fund Investment L.P. The funding is intended to expand Midokura’s product development teams and contribute to the refinement of its go-to-market strategy. Coincident with the news of Midokura’s Series A funding is the announcement that Dan Mihai Dumitriu, formerly CTO, replaces Tatsuya Kato as CEO. Co-founder Tatsuya Kato will assume the responsibility of Chairman of the Board. CEO Dan Mihai Dumitriu remarked on the significance of the capital raise and the company’s software defined networking technology as follows:

As enterprises and carriers embrace and build out IaaS clouds, an overlay-based network virtualization platform will soon be a must-have technology. The financial support of Innovation Network Corporation of Japan, and other key backers, validates our strategy as well as the work we’ve done over the past three years developing our industry leading product MidoNet. This funding will enable us to accelerate our product engineering, the establishment of partnerships, and the growth of our customer base. We look forward to delivering the most performant, scalable and fault tolerant network virtualization solution to the IaaS infrastructure market.

Here, Dumitriu neatly summarizes the concept behind Midokura’s Midonet platform, a distributed, software-defined virtual network solution targeted toward IaaS cloud-service providers as well as enterprises. Midokura plays in the space made famous by VMware acquisition Nicira, but is designed differently because of its decentralized, fully distributed architecture as elaborated by Brad Hedlund. The company is already a veteran contributor to the OpenStack community and is in the process of gearing up to announce further partnerships with other cloud platforms in the upcoming months according to Chief Strategy Officer Ben Cherian. Now that the company is flush with a significant infusion of cash, the industry should expect to hear more news about Midokura’s penetration into the U.S. market as its unique software defined networking platform increases its footprint in IaaS infrastructures and delivers simplified network infrastructures and protocols for data transmission in addition to high performance and high availability virtual networking solutions.

Sauce Labs Brings Cloud To Automated Web Application Testing Including iOS

San Franciso-based Sauce Labs has been recommended by Adobe after the latter recently announced it was closing its BrowserLab testing platform for web applications. Adobe’s affirmation of Sauce Labs underscores its success with a use case for IaaS infrastructures different from the remote hosting of applications on outsourced infrastructure, namely, IaaS for testing and development purposes. Sauce Labs uses virtual machines to provide customers with over 100 combinations of browsers and platforms for the testing of web-based applications. The company’s SaaS software empowers enterprises to conduct detailed evaluations of the testing process by way of screenshots, video recordings and support for the Firebug plug-in for Mozilla Firefox.

Sauce Labs further enables customers to conduct testing for applications on browsers for mobile devices such as iPads, iPhones and Androids. The Sauce Labs virtualized testing infrastructure platform allows customers to perform A/B and multivariate testing across a wide range of browser-platform permutations while benefiting from the security and integrity of its virtualized environment. Because each virtual machine is newly spun up and created for each testing instance, customers can rest assured that their tests are free both of cookies and traces of their applications for other customers.

Sauce Labs recently announced the availability of a new service for testing iOS applications such as iPads and iPhones based on the open source project Appium. The Sauce Labs team rewrote the Python-based open source code for Appium into Node.js in order to render its iOS Appium testing platform accessible to a wider range of developers such as those who focus on JavaScript. Adam Christian, Vice President of Development at Sauce Labs, remarked on Appium on Sauce and the innovation of Sauce Labs’s cloud-based automated testing environment as follows:

As the world becomes more mobile and online interactions increasingly move to specialized applications, it’s increasingly important that these apps perform and meet consumer demands. Testing these apps has been a slow and difficult process, often done manually by teams using physical devices. Automated testing enabled by Appium represents the future, and Appium written in Node.js represents the best course toward ensuring the code continues to evolve as needs change.

The screenshot below illustrates a sample testing scenario for Everest, an iOS application tested using Appium on Sauce:

Appium reorients Sauce Labs squarely toward iOS mobile applications in a move that renders Sauce Labs the de facto cloud-based testing infrastructure for all platforms and programming languages. Its cloud-based platform for automated testing of machine and mobile apps is used by developers and enterprises alike, with Salesforce.com representing one of Sauce Labs’s prominent customers and investors. Given how customers in agile development environments iteratively tweak and add to branches of existing code, Sauce Labs’s cloud-based testing technology lies at the heart of the DevOps and continuous integration movement in application lifecycle management. Users should expect cross-platform cloud-based testing to emerge as the standard for testing and QA in software development, particularly in the wake of the heterogeneity of browsers and platforms in the industry at large.

KVH Selected by Tokyo Stock Exchange for “Market Impact View” Dashboard

The Tokyo Stock Exchange (TSE) today announced its selection of KVH IaaS as the cloud computing platform to deliver a Beta version of “TSE Market Impact View,” an information delivery service that provides visual analytics to investors and interested market participants. The TSE Market Impact View responds to an investor’s most recent order as stored in FLEXFull, the market information system used by the Tokyo Stock Exchange. TSE Market Impact View delivers a graphically rich representation of an investor’s order over time and, as such, leverages the ability to load and process large volumes of financial transactional data in real-time.

Tokyo-based KVH brands itself as an Information Delivery Platform that delivers IT solutions that empower clients to store, access and transmit information. KVH’s services leverage a combination of cloud IaaS services as well as traditional data center hosting options. The company’s infrastructure boasts four data centers in Tokyo and Osaka that collectively deliver the lowest latency connection to major Japanese stock exchanges such as the Tokyo Stock Exchange (TSE), the Osaka Securities Exchange (OSE), Tokyo Commodity Exchange (TOCOM) and the Tokyo Financial Exchange (TFX). Alongside the announcement of its selection by TSE for the “TSE Market Impact View,” KVH today disclosed an expansion of its low-latency network to include a connection in Sydney that will facilitate high frequency trading on the Australian Securities Exchange.

OpenStack’s First Birthday: A Year in Review

OpenStack, the open source cloud computing project initiated by NASA and Rackspace, celebrated its first birthday on July 19. OpenStack’s open source code enables customers to create public or private cloud environments that deliver functionality analogous to that provided by private Infrastructure as a Service (IaaS) vendors such as Amazon Web Services, Joyent or Verizon Terremark. The OpenStack project began with the support of 25 companies but has grown significantly over the last year to the point where it now claims the backing of 80 companies that collectively offer financial and technical support to a staff of 217 developers. Current contributors include AMD, Canonical, Cisco, Dell, Intel and Citrix and start-ups such as Piston Cloud Computing and Nephoscale.

OpenStack’s offering currently contains three components: (1) OpenStack Compute, which allows customers to create and manage a hypervisor agnostic cloud computing platform featuring a network of virtual machines; (2) OpenStack Object Storage, for storing petabytes of data; and (3) OpenStack Image Service, to take, store and provide copies of virtual running machines. The core of OpenStack’s offering, OpenStack Compute, allows customers to create an IaaS cloud environment using code that has been maintained under an Apache license.

Key OpenStack milestones during the last year include the following:

• March 30, 2011: Rackspace, Dell and Equinix announce plans to launch an OpenStack demo environment intended to entice customers to investigate OpenStack’s cloud computing products.
• May 10, 2011: Canonical’s decision that the 11.10 version of its Ubuntu Enterprise Cloud would be based on OpenStack instead of Eucalyptus.
• May 25, 2011: Citrix reveals plans to deploy Project Olympus, the first commercialized version of OpenStack.
• July 12, 2011: Citrix acquires Cloud.com, and promises to build APIs between Cloud.com’s CloudStack platform and OpenStack.

Dubbed the Android of the cloud computing market, OpenStack promises to radically transform the cloud computing landscape by shifting market share from private cloud vendors such as Amazon Web Services and Verizon Terremark to an open source cloud operating system. The first year witnessed explosive development of OpenStack’s code, including three code releases named Austin, Bexar and Cactus, respectively. The fourth release, Diablo, is scheduled for distribution on September 22, 2011. OpenStack’s first year also witnessed notable deployments by Internap, Korea Telecom and Piston Cloud Computing.

In its second year, OpenStack aims to build upon its development progress by inaugurating more deployments in addition to rolling out new functionality such as networking support and identity management. If OpenStack continues to grow at a rate that comes anything close to what it displayed in its first year, expect it to leave an even larger footprint in the cloud computing space by the time of its second birthday in July 2012.

Quantifying Cloud Computing Market Share

Recent years have witnessed a proliferation of analyses about the size and relative market share of vendors in the cloud computing space. According to a post in GigaOM, UBS Analysts estimate that “the total market for AWS-type services will be between $5-to-$6 billion in 2010 and will eventually grow to $15-to-$20 billion in 2014.” Gartner, meanwhile, estimates that the IaaS market will grow from $3.7 billion in 2010 to $10.5 billion in 2014. Forrester predicts that IaaS spending alone will increase from $2.9B, projected to grow to $5.85B by 2015 in their recent report, Sizing the Cloud, Understanding and Quantifying the Future of Cloud Computing.

The discrepancies between these estimates of the current and future state of the IaaS space illustrate some of the difficulties specific to quantifying cloud computing market share, many of which of derive from the following reasons:

• The plurality of cloud computing modalities renders calculations of market share complex. While it’s true that the terms IaaS, PaaS and SaaS remain powerful terms for understanding cloud computing deployments, vendors are increasingly offering more than one variation of the IaaS, PaaS and SaaS trinity. Amazon’s Elastic Beanstalk, for example, constitutes a PaaS offering from the largest IaaS vendor in the space. Meanwhile, Red Hat offers an IaaS product called CloudForms alongside a PaaS offering known as OpenShift. Moreover, analysts may choose to include or not include SaaS, PaaS or consulting services from cloud computing products in their estimation of cloud computing revenue.

• Vendors often refuse to disclose cloud computing revenues, especially if they are privately held or otherwise multi-tiered businesses wherein cloud revenue is miniscule in comparison to revenues from other services. Amazon Web Services constitutes the paradigmatic example, here, but the recent acquisitions of Terremark by Verizon and Savvis by CenturyLink may serve as further cases in point, though most reports suggest that both Terremark and Savvis will function as independent business units within their parent company with detailed revenue breakdowns.

• Within the first half of 2011, Dell, HP, IBM, Oracle, Red Hat, Apple, Go Daddy and Microsoft have made increased commitments to cloud computing deployments in ways that promise to significantly impact the existing market share balance.

• The global nature of cloud computing renders quantification of market share challenging because many U.S. cloud computing vendors operate transnationally in partnership with other channel partners that may or may not report revenue in a transparent fashion. Consider Joyent’s partnership with ClusterTech and Qihoo 360 Technologies in China, for example, in this regard.

Despite these methodological difficulties, we can make some definitive statements about vendor revenue. Consider the following revenue data points, for 2010:

1. IaaS
a. Amazon Web Services: $500–700 million
b. Rackspace: $100 million
c. Terremark: $37.5 million, prior to acquisition by Verizon
d. Savvis: $15.2 million, prior to acquisition by CenturyLink
e. Joyent: $10- 20 million

2. SaaS
a. Salesforce.com: $1.3 billion
b. NetSuite: $200 million
c. Rightnow: $200 million
d. SuccessFactors: $200 million
e. Taleo: $200 million

Revenue for PaaS in 2010 is difficult to locate and widely believed to be miniscule. But given the sheer number and heterogeneity of cloud computing vendors and deployments, these numbers represent little consolation for analysts and investors seeking to understand trends in the cloud computing universe. How will Apple’s iCloud fit into this equation, for example? What about Facebook and Google? In what way will Microsoft’s Office 365 change market share in the productivity software space? Part of the difficulty of estimating cloud market share, here, involves the lack of a common set of standards for measuring the size of cloud computing deployments, in addition to the challenges specific to locating data for annualized cloud based revenue per vendor. Until inter-operability standards emerge, analysts will need to develop new methods of imposing discipline and rigor on the conglomeration of cloud computing forms. Meanwhile, vendors and customers alike should push for inter-operability standards that facilitate apples to apples comparisons of cloud offerings from vendors across the globe.

Verizon’s Terremark Worldwide Pledges to Avoid Vendor Lock-In and Provide Enhanced Security

Just days after Go Daddy announced plans to enter the IaaS space, Verizon revealed its readiness to deploy IaaS and managed services as a result of the consummation of its technological integration with its recent acquisition Terremark. The newly formed entity, Terremark Worldwide, plans to roll-out hosting and cloud infrastructure services by leveraging a network of over 50 data centers located in North America, Europe, the Asia-Pacific and Latin America. Importantly, Terremark Worldwide intends to avoid vendor lock-in by empowering customers to migrate data from one cloud infrastructure to another. Currently, Terremark’s cloud infrastructure services support only the VMWare hypervisor whereas its managed services hosting offering integrates with multiple hypervisors. Kerry Bailey, President of Terremark Worldwide, noted that Terremark plans to integrate with other virtualization platforms as well as develop APIs to help customers avoid lock-in as part of its product roadmap over the next few years. In response to data breaches affecting companies across the U.S., Terremark also plans to provide security risk assessments and vulnerability analyses that leverage Verizon’s expertise in security, risk, and identity and access management services.