STARTUP TO WATCH

InteliCloud Rethinks the Server

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 ofoutsourcing — 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 infrastructuredesigned from the ground up to tightly integrate off-the-shelfcomponents with hardware and software into a singlechassis. 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 ableto 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 wasnothing 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 himlooking for a better solution to stream high-definition (HD) video on aWeb site. Several available solutions failed to provide a product thatwould scale correctly.

Meanwhile, Hubbard had been watching developments in the video fieldand was beginning to form an idea about what a next-gen system wouldentail.

“Everything was pointing to a single platform that was going to changethe world. Despite all the discussions over the last 16 years, nobodyhad figured out how to do it. That was fortunate for us,” Hubbard said. The result of his work for this one customer led to theformation 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 buildingout 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, assortedcomponents and software. They created a stable, scalable platform in less thanfour days. The customer was satisfied.

“We sat in a conference room with a 90-foot screen and an HD projectorand surround sound system. We viewed a movie trailer that wasexceptional stream onto that screen. It came off of our hybridplatform. They did it in less than four days — up, running and stable,” Hubbardexplained.

That initial success led to Hubbard’s decision to put some marketing behind his hybrid platform and sell it to more customers. He designed theproduct, called it “InteliCloud 360,” and spoke with heavies in theindustry. They liked what Hubbard had.

A Startup Happens

Forming his company with his associate and a team of outsourcedengineers, Hubbard designed the InteliCloud 360 into an ATCA (advancedtelecommunications architecture) chassis. He built it around theNetwork Equipment Business Systems (NEBS) Level 3telecommunications standard.

In mid-April of this year, InteliCloud closed a deal for a Series A roundof financing with Media One Direct, a company that is developing andbuilding a next-generation content delivery network. Finding investorsquickly 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-breedthinkers in the market. The product started to take a life. We beganto realize that the product was going to be able to save a lot ofmoney and space. We were able to get three times the number ofcustomers per square foot using 60 percent less power and space,” saidHubbard.

New Design

The HD video streaming platform that Hubbard pushed together for thatfirst customer was the start, but not the finish, of what becameInteliCloud 360. The original concept is still present, but theplatform 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 providermarket.” This new marketplace changed over the last five years througha cross-pollination of the cable and telecom markets.

“Google, AT&T and other enterprises literally crossed over to offervideo 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 totalsabout 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 below50 percent of what it costs to bring up a network using more traditional methods.

In some ways, InteliCloud’s technology uses the same concept asCisco’s recently launched Unified Computing System, orUCS. 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 Ciscois doing. Hubbard’s investors have been given a positioning letter on the topic in which he notes that the problem with Cisco’sapproach may lie in one key word: “proprietary.” In most cases, thattranslates to “expensive,” he declared.

Further, the cost of the technology coupled with the actual cost ofthe 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 thevirtualized environment would have to far outweigh the performance ofa 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 isdesigned for the service provider at lower cost,” according to virtualization and storage expert Marc Staimer, presidentof Dragon Slayer Consulting.

“It is based on standards rather than proprietary,” Staimer toldthe E-Commerce Times.

Hubbard’s platform is available in OS-based versions, which gives it the advantage of calling drivers fromthose 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 likeCisco with its UCS, the 360 box is far more compact and integrated, according to Staimer. InteliCloud cleverly tied together multiplechassis, he said.

“InteliCloud’s product plays underneath the UCS umbrella at a lowerprice and a higher density. They don’t have the ‘Cisco’ name, so they canundercut Cisco’s prices. It lets [Hubbard] undercut with thecapabilities the other guys don’t have. Lower priced and morefunctional — isn’t that the name of the game when you play under thebigger guy’s umbrella?” Staimer quipped.

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