Deal Radar 2008: Elastra

This story was written by Sramana Mitra.
Back in January, I wrote a Trend Radar piece called SaaS Impact on IT Infrastructure and predicted that the adoption of SaaS in the enterprise will give rise to a series of innovations to help manage the operational complexities surrounding the phenomenon. In this column, we look at Elastra, one such infrastructure provider.

Elastra provides cloud computing infrastructure that simplifies how customers design and deploy applications by using their components in the cloud. The company calls its offering "Elastic Computing". The company distinguishes itself from the "Platform-as-a-Service" offered by Salesforce.com in terms of its application design value proposition, versus Saleforce.com's hardware and bandwidth oriented offerings.

CEO Kirill Sheynkman founded Elastra in 2007. A seasoned enterprise software entrepreneur, Sheynkman founded two other startups: Stanford Technology Group, which was acquired by Informix/IBM in 1995 and Plumtree Software, acquired in 2005 by BEA. Elastra is based in San Francisco and has around 20 employees. The company raised a $2.6 million Series A from Hummer Winblad Venture Partners in August 2007 and a $12 million Series B led by Bay Partners, with participation from Amazon.com, Inc. and previous investors Hummer Winblad, in August 2008. There is a long discussion at GigaOm on why Amazon is investing in the company.

Elastra has developed two markup languages. The first, Elastic Compute Markup Language, explains the parts of an application and the hardware and software to go with it. The second, Elastic Compute Deployment Language, is made up of design tools, storage, accounting, managing, and deployment capabilities and details how to use the application in an IT infrastructure. Thus, an application developer can specify the architecture and design of an application using these markup languages, and Elastra's server will configure and provision applications on the fly.

Pricing is on a metered pay-per-use software model. Elastra provides unlimited database clusters for $0.50 per server per hour, which translates to approximately $360 per server per month. For storage, Elastra charges unlimited disk space for $200 per TB per month, with 1TB free. In comparison, a dedicated P4 at Layered Tech is approximately $125, possibly without the on-demand facility.

Other companies offering similar services are Amazon with their EC2 and S3, RightScale, and PI Corporation, but those are all hardware and bandwidth oriented services, not application oriented. In fact, Elastra is expected to be a seamless "connector" to Amazon's EC3 and thus, bring enterprise customers onto the public cloud that Amazon is offering.

According to an article on ZDNet, the number of paying customers for Elastra had had gone up from 4 in March 2008, when it launched, to 40 in August. Their customers are mostly large enterprises who are developing and deploying applications in their private cloud, as opposed to on public cloud infrastructure like Amazon's EC3, which is why, I am not entirely convinced that this is a hugely strategic investment from Amazon.

Related Readings:
*Forbes Column: Deconstructing the Cloud
*eBay vs Amazon: Which Is a Better Company?
*Deal Radar 2008: Appiri


By Sramana Mitra
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