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The goal of every startup technology firm is to open its doors and push out the next killer app, in the process changing the world -- or at least a little corner of it. InteliCloud CEO Ken Hubbard expects to do just that in mid-June, when he launches InteliCloud 360.
Hubbard's approach to research and development -- lots of outsourcing -- gave him a boost that allowed him to move from starting a new company in January 2008 to preparing to launch a new product barely 18 months later.
The product, InteliCloud 360, is a reimagined network infrastructure designed from the ground up to tightly integrate off-the-shelf components with hardware and software into a single chassis. This new platform, according to the company, dramatically simplifies the operation, scalability and overall agility of the network.
"We were in the right place at the right time mentally, and were able to pull the right people together to actually build the product," Hubbard told the E-Commerce Times.
Next-Gen Idea
The concept of marrying video delivery to an integrated platform was nothing new. However, after several years of work at a company trying to build such a hardware and software platform, Hubbard watched the firm fold without ever having released the product. Afterwards, he did consulting work for a few months.
His business luck took an unexpected turn when a customer 
came to him
looking for a better solution to stream high-definition (HD) video on a
Web site. Several available solutions failed to provide a product that
would scale correctly.
Meanwhile, Hubbard had been watching developments in the video field and was beginning to form an idea about what a next-gen system would entail.
"Everything was pointing to a single platform that was going to change the world. Despite all the discussions over the last 16 years, nobody had figured out how to do it. That was fortunate for us," Hubbard said. The result of his work for this one customer led to the formation of InteliCloud, which he now helms as president and CEO.
Getting Started
Hubbard's customer needed to scale the streaming of HD television content on his Web site in such a way that it would not cost him millions. Instead of building out a huge system before enough subscribers were signed up to pay for it, Hubbard's customer needed a way to start small and grow the scale of the service on-demand.
So Hubbard, working with a former associate, cobbled together a hybrid unit made from a cabinet, assorted components and software. They created a stable, scalable platform in less than four days. The customer was satisfied.
"We sat in a conference room with a 90-foot screen and an HD projector and surround sound system. We viewed a movie trailer that was exceptional stream onto that screen. It came off of our hybrid platform. They did it in less than four days -- up, running and stable," Hubbard explained.
That initial success led to Hubbard's decision to put some marketing behind his hybrid platform and sell it to more customers. He designed the
product, called it "InteliCloud 360," and spoke with heavies in the
industry. They liked what Hubbard had.
A Startup Happens
Forming his company with his associate and a team of outsourced engineers, Hubbard designed the InteliCloud 360 into an ATCA (advanced telecommunications architecture) chassis. He built it around the Network Equipment Business Systems (NEBS) Level 3 telecommunications standard.
In mid-April of this year, InteliCloud closed a deal for a Series A round of financing with Media One Direct, a company that is developing and building a next-generation content delivery network. Finding investors quickly helped Hubbard get his product to market in a hurry.
"As we put this together, we used about 60 or 70 of the best-of-breed thinkers in the market. The product started to take a life. We began to realize that the product was going to be able to save a lot of money and space. We were able to get three times the number of customers per square foot using 60 percent less power and space," said Hubbard.
New Design
The HD video streaming platform that Hubbard pushed together for that first customer was the start, but not the finish, of what became InteliCloud 360. The original concept is still present, but the platform itself is completely different.
With Hubbard's technology, service providers can start off by offering a service in a regional area, then grow over time. They can scale their networks on the basis of either existing or potential customers.
InteliCloud is targeting what Hubbard calls the "new service provider market." This new marketplace changed over the last five years through a cross-pollination of the cable and telecom markets.
"Google (Nasdaq: GOOG), AT&T (NYSE: T) and other enterprises literally crossed over to offer video services. Anyone who does this is in our global market," explained Hubbard.
InteliCloud hopes to service that marketplace with a relatively small staff. The company's core team, as Hubbard puts it, is made up of fewer than 10 people. With partners, technical and sales folks, though, InteliCloud's roster totals about 60 people.
"We outsource a lot of things. That gives us a lot of flexibility," he said.
Addressing the Competition
InteliCloud will be ready to go live with its 360 platform in mid-June. The technology's pricing will be offered as a complete solution. As Hubbard described it, his customers' costs will come in well below 50 percent of what it costs to bring up a network using more traditional methods.
In some ways, InteliCloud's technology uses the same concept as Cisco's (Nasdaq: CSCO) recently launched Unified Computing System, or UCS. Cisco's platform pulls together enterprise networking, storage, virtualization and computing functions into a single system. UCS aims to simplify scalability and improve efficiency.
However, Hubbard has made it a point to differentiate InteliCloud from what Cisco is doing. Hubbard's investors have been given a positioning letter on the topic in which he notes that the problem with Cisco's approach may lie in one key word: "proprietary." In most cases, that translates to "expensive," he declared.
Further, the cost of the technology coupled with the actual cost of the additional memory would mean that in order to be cost-effective, the Cisco blades would have to offer a more than tenfold improvement in performance over standard blades with 32 GB of memory. Cisco, he said, needs all this memory to offer hypervisor-based virtualization technology. The performance of the virtualized environment would have to far outweigh the performance of a standalone server to make it worthwhile, according to Hubbard.
Size Matters
Cisco's technology is indeed very similar to InteliCloud's, "except [InteliCloud] is more compact, more flexible and is designed for the service provider at lower cost," according to virtualization and storage expert Marc Staimer, president of Dragon Slayer Consulting.
"It is based on standards rather than proprietary," Staimer told the E-Commerce Times.
Hubbard's platform is available in OS-based versions, which gives it the advantage of calling drivers from those specific operating systems. Thus, it is easy to port over to another OS rather than using a virtualized environment, Staimer explained.
Undercutting Game
While InteliCloud is competing against the blade server guys like Cisco with its UCS, the 360 box is far more compact and integrated, according to Staimer. InteliCloud cleverly tied together multiple chassis, he said.
"InteliCloud's product plays underneath the UCS umbrella at a lower
price and a higher density. They don't have the 'Cisco' name, so they can
undercut Cisco's prices. It lets [Hubbard] undercut with the
capabilities the other guys don't have. Lower priced and more
functional -- isn't that the name of the game when you play under the
bigger guy's umbrella?" Staimer quipped.
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