Today, Cloud.com has announced that it is being acquired by Citrix (http://bit.ly/nL7696).  It is a bittersweet moment for us at Index as we have loved working with Sheng and the team at Cloud.com, but Citrix made an offer that the team couldn’t refuse.

We are incredibly excited for Sheng and his colleagues at Cloud.com.  They have been working hard at this for close to 3 years, and can claim a major victory.  When we invested in Cloud.com 1.5 years ago, VMOps (as it was known back then) had seized on the notion that if Amazon was having so much success with EC2, many other companies with data centers – both private and public – would be interested in building a cloud of their own.  Public hosting companies would want to roll out a datacenter-as-a-service that would compete with Amazon.  Private data centers could be deployed and managed more effectively as a cloud as well.  This vision turned out to be prescient as many customers flocked to Cloud.com to try and ultimately deploy these clouds.

Cloud.com was not the only company to have this vision. In fact, they weren’t the first.  But, by developing a flexible platform called CloudStack which could rapidly add new features and by responding to customer needs, Cloud.com won customers – one-by-one…..Tata Communication, KT, Zynga, IDC Frontier.  Gradually, over a period of 2 years, Cloud.com became the leader in this market.

Our hats go off to Citrix who have brought on board the leading product in cloud computing created by a fantastic team that has executed flawlessly over the last 2 years.

While we are incredibly happy for Cloud.com and Citrix, we also believe that the market around cloud is just getting rolling.  Many forward-looking businesses have adopted EC2 and other cloud environments, but mainstream adoption is well ahead of us.  We believe that the large majority of applications will be developed for and hosted by clouds.  The benefits of moving to the cloud are massive for small and large businesses alike.

That said, we still believe there are many interesting challenges and opportunities in the cloud – some of these will hopefully create the next Cloud.com:

  • Enabling enterprises to easily migrate/rewrite their applications for a cloud environment – many of the applications on clouds today are developed for emerging web-related applications.  But, there is a massive market out there of legacy applications developed for traditional environments that are poised to migrate to the cloud.
  • Allowing applications to exist in hybrid or multi-cloud environments – whether for resilience or for cost reasons, users of cloud will want to mix and match between cloud providers or perhaps their own clouds.  Making this simple and easy will increase the attractiveness of cloud usage.
  • Managing the security of data and applications in clouds – for many enterprises – especially the larger ones – the idea of placing critical data access in a cloud somewhere outside of the corporate boundary is still a gut-wrenching thought.  Security solutions that alleviate these concerns – either via data encryption, VPNs, or access control will be very important to address this issue.
  • Ranges of new SaaS application that enterprises will develop for themselves – thousands of custom applications are developed for many different kinds of businesses today.  A new breed of applications will be built by IT departments in the cloud and will run on private/hybrid clouds.  While consumer applications lead the way in cloud usage today, many of these internal IT applications will be reconstituted as SaaS and launched on clouds.
  • Broad-based usage of big data applications like business intelligence, transcoding/streaming, data mining & analysis – undoubtedly, these types of applications – headlined by Hadoop – will be big beneficiaries of cloud infrastructures.  Making it simple to take advantage of these relatively complex technologies will be a big opportunity.

The list is by no means comprehensive and many great new start-ups are already working to address some of these opportunities.  But, we certainly feel like cloud computing is a game changer.  In the late 80s and mid 90s, the computing universe brought us the client/server revolution.  The late 90s and early 2000s gave us the transformational wave of open source.  Today, we are seeing the rise of cloud, virtualization, and SaaS.  And, it’s a really big opportunity.

Over the years, we’ve had the chance to partake in these mega-trends at Index through companies like MySQL, Trolltech QT (Nokia), Pentaho, OpenX, Gluster, Rightscale, StorSimple and many others.  As we close the chapter with Cloud.com, we send hearty congratulations to Sheng and his team and thank them for the opportunity to have been their partners.  We hope to work with many great entrepreneurs like them as we continue the great journey in the clouds.