Cloud computing is driving major changes in the business models and services provided by internet service providers, opening new areas of potential business for those willing to invest.
Most internet service providers have also provided hosting for customers, as it was a natural extension of their businesses. At first it was website hosting but, over time, more and more different types of servers found a home in their creaking, ad hoc datacentres.
The arrival of virtualisation technologies allowed such providers to consolidate, to work smarter rather than harder, and to improve their narrow margins -- and it also encouraged the shift to outsourcing among user organisations.
Internationally, the likes of Amazon and Rackspace are targeting user organisations globally and attracting business from New Zealand users. Locally, IBM has announced a major datacentre build, while Unisys has similarly invested over the past few years. Telecom and Gen-i have announced their push into cloud provision.
But now, encouraged by technology providers such as VMware and Microsoft, smaller players, many of them ISPs, are taking a plunge to build cloud platforms.
VMware's global cloud architect, Mike DiPetrillo, who was in New Zealand recently, says VMware's vCloud Express initiative, unveiled last September in the US, offers an interim solution for service and hosting providers developing clouds, and an alternative to Amazon's web services.
"It is an onramp to the cloud and designed to help our service providers and telcos go after that Amazon market. We said to partners that we wanted to help create something similar to it, so the customers can come in and run on this VMware powered cloud," he says.
To do that, they needed to deploy new, powerful blade servers and virtualisation software as well as management tools, but they also need to ensure their datacentres are of industrial strength.
Iconz is best known as an ISP, but like many mid-sized service providers it has a substantial hosting business, especially after its acquisition of Freeparking and WebFarm. CEO Sean McDonald says 25 percent of New Zealand registered domains and hosting customers.
That demand prompted Iconz to invest in 250 racks of capacity at its Airedale St, Auckland premises, where it has invested $2 million in developing its platform.
"Talking to customers it became obvious they were looking for something more flexible, virtual private servers and so forth," McDonald says.
The Iconz platform uses HP hardware and is modelled on Mosso.com, now Rackspace, he says.
"They were at the forefront of virtual server offerings, now known as 'cloud'. I'm not sure where that silly name came from."
Local VMware partner Maxnet was a founding partner for vCloud Express and is also in the process of building a VMware-powered cloud.
Maxnet chief technical officer Derek Gaeth says the public rollout will take place later this year, at a yet to be confirmed date.
"We're working on the billing side at the moment before we launch a self-service public offering to clients. All the infrastructure is there, but we want to take a complete end-to-end view to servicing our customers' cloud needs," he says.
But technology is only part of the equation.
"We also employed good people, with skills in virtualisation and blade hardware," Iconz's McDonald says.
His experience in server-side computing goes a fair way back. He was at Unisys when it invested heavily in infrastructure for Application Service Provision, the buzz phrase around in the year 2000. It was a case of build it and they will come, he says.
They didn't.
McDonald says he finds the acronyms being thrown around about cloud computing "tiresome". He thinks of Iconz's model as platform as a service, which he defines as the same as infrastructure as a service.
Part of the service includes what he calls a "stress testing" environment for applications to determine their suitability for a cloud environment. Of those that enter, one in three do not proceed, he says.
Most applications sit in this quarantine for a few days, but if they are "raw" they can be there for a number of months, he says.
Maxnet's marketing manager, Wayne Voss, says the company is looking at much more than the server element of virtualisation.
"The endgame is the delivery of applications and services reliably and cost effectively," he says. But there is no point in virtualising only one slice of the system.
Maxnet is virtualising across multiple datacentres and across components of its services, including firewalls, load balancing and the network itself, he says.
He says F5 load balancing, for instance, is used to balance loads on pools of servers and across datacentres in Auckland and Christchurch. In the case of auto failover, everything goes with the servers, including the firewall and network.