Verizon’s New Public Cloud Takes Aim at Amazon, Rackspace

By Jeffrey Burt  |  Posted 2013-10-04

Verizon’s New Public Cloud Takes Aim at Amazon, Rackspace

Verizon officials are looking to take on the likes of Amazon, Rackspace and Google with its new Verizon Cloud platform, which the company said will offer businesses big and small greater flexibility, agility and control than competing public infrastructure-as-a-service offerings.

Verizon Cloud, which will be housed in Verizon data centers around the world, will enable customers to quickly spin up virtual machines, and to more easily set and configure the virtual machine, networks and storage requirements and performance. Rather than just having to choose between pre-set size configurations—small, medium or large—customers will have more granular control over the performance of the VM and network, and the configuration of storage.

“We are putting control and choice back in the hands of the user, while still addressing their needs for availability, performance and security,” John Considine, chief technology officer of Verizon Terremark, said in a statement. “We started from scratch, building the core components we felt necessary to achieve that goal.”

Verizon officials announced the new cloud platform Oct. 3 during a keynote address at the Interop 2013 show in New York City. They reportedly said the company will run the Verizon Cloud along with the company’s existing first-generation infrastructure-as-a-service (IaaS) offering, the Verizon Terremark Enterprise Cloud.  

The public beta of the cloud service will launch in the fourth quarter, with customers initially being served by the infrastructure in Verizon’s Culpeper, Va., data center. Eventually, other data centers—in such places as Miami; Santa Clara, Calif.; Amsterdam, London; and Sao Paolo, Brazil—will be added to the Verizon Cloud offering through the first half of 2014. Beta access to the Verizon Cloud at first will be limited to a few hundred new users a month, with more being added as capacity allows.

The system is designed to support millions of virtual machines at each location, the company said.

“This is the revolution in cloud services that enterprises have been calling for,” John Stratton, president of Verizon Enterprise Solutions, said in a statement. “We took feedback from our enterprise clients across the globe and built a new cloud platform from the bottom up to deliver the attributes they require.”

Verizon is looking to challenge Amazon Web Services, Rackspace and others in what promises to be an increasingly competitive market as more businesses move more of their workloads into the cloud. IDC analysts said in a report last month that between this year and 2017, the public IT cloud services market will grow 23.5 percent a year, with worldwide spending growing from 447.4 billion in 2013 to more than $107 billion within four years.

By 2017, public IT cloud services will account for 17 percent of IT product spending and will drive nearly half of all growth across five tech categories—applications, system infrastructure software, platform-as-a-service and basic storage.

"The first wave of cloud services adoption was focused on improving the efficiency of the IT department," Frank Gens, senior vice president and chief analyst at IDC, said in a statement. "Over the next several years, the primary driver for cloud adoption will shift from economics to innovation as leading-edge companies invest in cloud services as the foundation for new competitive offerings. The emergence of cloud as the core for new 'business-as-a-service' offerings will accelerate cloud adoption and dramatically raise the cloud model's strategic value beyond CIOs to CXOs of all types."


Verizon’s New Public Cloud Takes Aim at Amazon, Rackspace

Verizon officials hope to use a combination of greater flexibility, better performance and better price models to differentiate their platform from other cloud offerings.

Greg Miller, an analyst with Canaccord Genuity, believes Verizon is positioning itself to become a “formidable competitor” in the public IaaS space and “that a successful launch of Verizon Cloud will help drive the recovery of enterprise revenue growth in 2014 and possibly pressure competitors in the space.”

“Through in-sourcing a key software component and utilizing less expensive hardware, the company expects to lower costs and become more price-competitive in the public cloud market, a key issue in our view, especially with small and midsize customers,” Miller wrote in an Oct. 4 research note. “With more competitive pricing, we believe Verizon will likely garner more wallet share.”

Verizon’s current cloud reportedly includes hardware from Cisco Systems through its Unified Computing Systems, server blades from Hewlett-Packard and virtualization technology from VMware. However, details about the hardware infrastructure for the Verizon Cloud offering were scarce.

Verizon Cloud comprises two components: Verizon Cloud Compute—the IaaS platform—and Verizon Cloud Storage, an object-based storage service. Verizon Cloud Compute is all about speed and performance, with the ability to create virtual machines in a matter of seconds, and users building what they need and paying for what they use. Customers can set performance levels for virtual machines and networks, configure storage performance and attach storage to multiple virtual machines, a level of control that other cloud services don’t offer, officials said.

The IaaS platform can handle not only enterprise demands, but also those from midsize and smaller companies, or even individual IT departments and software developers.

Verizon Cloud Storage is a multitenant platform that enables storage accessibility from anywhere on the Web, and reduces latency issues that Verizon officials said hampered traditional storage solutions.

Canaccord Genuity analyst Miller said the flexibility inherent in the Verizon Cloud will be an advantage for the company.

“As the new Verizon Cloud service would allow convenient online provisioning and deployment of virtual machines, network and storage configurations … the new, more flexible offerings will attract more small and midsized enterprises, further expanding its potential addressable market in the rapidly growing public cloud sector,” he wrote.


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