Back in February, John Treadway, director of cloud computing portfolio at Boston-based Unisys, wrote that, "I think we might be at the very beginning of an interesting new phase in the evolution of cloud computing -- regional and local clouds."

Treadway rightly points out that local and regional hosting is hardly new, as smaller players have been "operating in the shadows of the big hosting companies" for many years. Such firms often simply resell the data center capacity of large players, he notes, but some of them have their own facilities. North Carolina's Hosted Solutions and Massachusetts' InetServices are two examples. Another is Minnesota-based VISI.com's recently launched Reliacloud.

Guest author Graeme Thickins is a technology writer, analyst, blogger and startup advisor. He began writing about cloud long before it was even called that. He blogs at www.tech-surf-blog.com, is a contributor at www.minnov8.com, and has guest posted several times at ReadWriteWeb. Disclosure: He has had a consulting relationship with VISI/Reliacloud.

According to Treadway, it's only natural for some local hosters to start new cloud initiatives to keep their customers from ending up at Amazon, Rackspace or the like. "Some will be successful, while others will fail," he maintains. But he predicts that a market segment will develop for regional cloud providers.

Building a Regional Cloud

The challenge of putting together such a service is not as daunting as some might assume given the tools available today, says Jason Baker, CTO VISI.com and ReliaCloud. "Our service was built using technology from VMOps, a venture-backed cloud stack provider based in Cupertino, California," he says.

He said other tools his company evaluated included VMware, Xen Cloud from Citrix, Eucalyptus, and others. He noted that Reliacloud is based on Xen this release, but that the firm is planning for other hypervisors in version 2.

"We built our own front end for self-service on top of VMOps' APIs, though we later realized what VMOps had out of the box would have saved us considerable time," said Baker. "We use the Tucows Platypus billing system, monitor our cloud with Nagios, and our storage is based on OpenSolaris ZFS managing Dell storage shelves." He noted that VMOps will be adding more enterprise storage options.

Part of ReliaCloud's early success was due to an existing customer base. "[It] was in beta for about three months," said Johnny Hatch, product manager. "During the beta period, the service was free, and nearly 100 customers signed up," he said, noting about half of them were existing VISI customers.

Why Go Regional?

Here are some of the things Baker said his firm learned during the process of planning and launching the Reliacloud service:

"We found customers want to keep tabs on where their applications are running. They also want to be able to audit their cloud service provider, they need custom configurations, and they like the extra comfort of knowing the people who are running the cloud. These companies find a regional/local cloud to be attractive." Examples of those customers include tech startups and interactive marketing agencies.

"In some cases, regulatory issues favor the regional/local cloud as well," Baker said. "In healthcare and financial services, the fact that a company can know for sure where its data is located at all times - meaning, in which legal jurisdictions - is more than comforting."

The Future

Baker admits ReliaCloud is still early in its cloud journey, but so far he is pleased. "Our success to date has been heartening." VISI had a busy first quarter. After launching the Reliacloud service in February, the firm announced in late March it had been acquired by TDS Telecommunications Corp. TDS, headquartered in Madison, Wisconsin, markets communications services to business and residential customers in 30 states, including Minnesota.

Treadway positions the regional cloud trend this way: "An analogy comes to mind. Think of the big hosting companies as giant boulders. They take up a lot of space, but they leave a lot of space between them for rocks, stones, pebbles, and sand. Local and regional clouds are there to fill the empty spaces." And, he says, there are a whole lot of those empty spaces.