September 15, 2010

“Intelligent” Cloud Automation Gets Substantial Push From Investors

Nicole Hemsoth

Adaptive Computing, known for its Moab automation technology, announced today that it was one of four companies selected by Intel Capital for a round of Series A funding. The company is set to receive $14 million with Intel’s line combined with further resources from two other investment firms who saw promise in the company and its nine-year track record of growth and profitability.

Steve Eichenlaub, managing director of Intel Capital stated that “Adaptive Computing’s solutions are well-positioned to play an important role upgrading enterprise data centers to intelligent self-optimizing cloud environments” and that this is in line with Intel Capital’s view that “intelligent policy management will play a critical role in the next phase of cloud automation.”

Adaptive COO and President told HPC in the Cloud on Monday that some were wondering why they made the external funding decision. In his view, “it came down to the fact that we were seeing an inflection in demand for our cloud products and the amount of incoming demand was greater than our organic revenues would allow us to service. We really had the choice of rejecting business, deferring business or accessing capital to build up to service that demand properly.”

Jackson noted that first and foremost, however, this “will enable the company to increase headcount and expand operations to meet the growing global demand” for customers with complex management and policy-driven needs that he feels is missing with other virtualization-centric or provisioning-related technologies that simple give users basic “yes and no” answers to their provisioning and virtualization needs. Adaptive is seeing that a growing number of customers are looking for more “intelligent” automation to enable more efficient resource management and ultimately, greater cost savings–and it seems investors have been watching this demand play out as well.

Placing Value on Intelligent Cloud Management

While there are a number of solutions that promise simple, intuitive, policy-based automation, Jackson argues that the level of complexity is often not enough to manage the needs of some of the largest enterprise data centers, particularly in the realm of financial services, mega e-commerce and web application providers, telcos, and increasingly, government—all of whom comprise the foundation for a significant majority of Adaptive’s business.

According to Adaptive’s COO, one of the reasons they have been singled out for this round of funding (outside of a clearly stated need to expand) is because there are no comprehensive “intelligent” cloud management solutions that do what Moab—the core of Adaptive’s business—can do.

As Jackson put it, “there many others focus just on the mechanism (provisioning and virtualization management type technologies) ours comes in on the decision-making layer. We focus as a service governor to manage the space, to manage the decisions that are made in the cloud and then we connect to a customer’s pre-existing investment in provisioning, virtualization, network, and storage technologies so we help their existing IT become cloud as opposed to a ‘rip and replace’ that requires them to shift their investments over to different technologies.”

Looking at what might set Adaptive apart is a challenging task given the number of vendors competing for share in the cloud management free for all that has led to some confusion about just how provisioning, policy-driven, and virtualization management issues are handled between solutions. Jackson admitted that there are many competing in the cloud space but they have a distinct focus that does not offer “intelligent” automation—instead opting for simple answers to complex questions for any given workload. 

“You have those that are coming in from the mechanism standpoint, those trying to provide provisioning and virtualization management but the challenge they have is that they are a mechanism without a “brain”—without a toolset to optimally apply resources to meet SLAs or objectives” said Jackson. “They’re typically something you can go to and say can I have it and it will either give it to you or not, but that’s the extent of its intelligence; this more like a workflow connected with provisioning management.”

He points to provisioning management technologies from CA, BMC and Eucalyptus to highlight his point, suggesting that these are “packaging of workflows and provisioning or virtualization management technologies” and that even what VMware just rolled out is a virtualization management-specific technology that focuses only on the question of “how do I move, lift and place resources together to create a new environment?”

Adaptive’s response to this is that they are on opposite side of the spectrum because they realize that customers have already made investments in many of these provisioning, storage and network technologies so it becomes their task “to take what’s there, add on this decision-making layer called Moab, which then makes optimal decisions.”

To highlight this point, he presented a nameless case study of one of their “large enterprise customers” 

“They had KVM, they had VMware, they had physical provisioning technologies and stateless provisioning technologies because 75% of workloads are not virtualized—so to have everything under KVM or Xen is not a reality today; most everything is in a physical provisioning space. So then we layer above that and we’re able to drive their server provisioning and virtualization management (even though it’s two different classes of virtualization).

So they wanted to optimize; if they could get something in KVM at a lower cost and still be virtual rather than VMware, they can cost-optimize that within Moab and apply those that need to be in VMware there; those that don’t go to KVM and those workloads that were not virtualized could then go through stateless provisioning because that’s faster, and then if we can pack things into fewer servers, we can use our green compute capabilities to power down servers. We were able to intermix all of those together. You just won’t find this in a virtualization-centric technology or a provisioning management-centric technology; it really takes a organizational level decision maker to look across all you have and optimize it.”

It’s not difficult to see the value of more intelligent cloud automation and the same companies he called out earlier are working furiously to produce similar capabilities. It seems it will be up to Adaptive to continue enhancing and expanding Moab in order to stay ahead of the curve since some of the other vendors entering into their “intelligent cloud” territory have the advantage of name recognition.

Life After Investment

The words of Intel Capital’s general manager Eichenlaub are worth remembering—that there is an increasing awareness about the business value of cloud automation products and their value for enterprises who are virtualizing some or most of their applications and will likely continue to do so if Gartner and IDC (and any other number of analyst firms) are correct.

Intelligent clouds are a requirement for large-scale enterprises who have taken steps down the road to virtualization as more companies realize they want to have what Jackson says is a “cloud infrastructure that is highly agile or over-buy and have a lot of excess capacity in several areas in order to service customers.” In his view, they want to see “the benefits of having that agile cloud infrastructure and our technology allows them to take advantage of that rapid delivery of resources. But they also want something that is intelligent and watches things like, what are the implications for my applications, what are the implications for my SLA’s—how do I optimize an SLA in that context?”

The funding will be concentrated mostly on the sales and delivery side; or, as Jackson put it, “on those who will take the technology and deliver cloud services to customers” but will also be distributed to other areas the company will emphasize, including end-to-end solutions for its partners. Currently, the company relies heavily on its partnerships, which already include the likes of IBM, SGI and HP, among others, but Adaptive also handles direct customers, which may happen more frequently given the added dash of resources to continue expanding their reach.


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