iweb rolling out first managed products on OpenStack-powered cloud

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iWeb rolling out first managed

products on OpenStack-powered cloud

Analyst: Liam Eagle

15 May, 2013

Canadian managed and dedicated hosting provider iWeb Technologies is rolling out the first set of products on its OpenStack-powered cloud platform this week, focusing on a limited set of managed cloud server products, with plans to issue a full set of public cloud offerings in the coming months.

Built on the OpenStack Grizzly release, the new cloud platform will effectively replace iWeb's more feature-limited first-generation cloud, which was engineered in-house and launched in early 2012. The new product will emphasize quality of service, storage performance and managed services, as iWeb seeks to position the offering as distinct, both among its own services and the larger hosting and cloud marketplace.


Based in Montreal, iWeb is a datacenter and infrastructure services provider with a core business in managed and dedicated hosting and colocation, along with a growing business in cloud

infrastructure. IT primarily serves mid- to mass-market customers, with an emphasis on

infrastructure to the exclusion of hosted business services such as hosted Exchange. The company characterizes its customers as using its infrastructure to power and deliver hosted services of their own.

Founded in 1996, iWeb went public in 2004, and was reprivatized in 2011 by founders Eric

Chouinard and Martin LeClair, with the help of private investment from Novacap, Caisse de dépôt et placement du Québec and Bank Street Capital. The privatization deal valued the company at

roughly $47m on the strength of about $30m in revenue. Since the privatization, the company has restructured parts of its hosting business, including spinning off its shared hosting business as a


separate brand, Funio. Management indicates 2012 revenues of about $50m, and that revenue growth was about 22% during the year.

Managed hosting, including its dedicated server, smart server and cloud server products, accounts for 75% of revenue; colocation contributes 10-12% and the shared hosting division accounts for about 10%.

The company operates four datacenters in Quebec, with total capacity of more than 70,000 square feet, as well as network points of presence (POPs) with peering in Toronto and New York City. It serves more than 10,000 customers with its managed, dedicated and cloud business, and another 15,000 via its Funio shared hosting brand. IWeb employs about 230 people, most of them in Montreal.

The bulk (about a third) of the company's business comes from Canada, with about 25% from the US, 20% from Latin America, and the rest from Europe and Asia. IWeb has a local-language presence in Latin America; however, its European and Asian business tends to come from

customers looking to expand into the US, but that prefer to physically locate their systems outside the country for legislative or other reasons.

Technology and product

Having engineered its early cloud platform in-house, iWeb's rationale behind the adoption of OpenStack was the pace of the platform's advancement, and the difficulty of keeping pace with emerging standards for functionality (around API, software defined networking and storage, automation and other innovations) with a comparatively small development staff of 25. Roughly a year ago, the company began experimenting with OpenStack's Folsom release and downloading and deploying trunks of Grizzly, which was fully released in April, and which powers iWeb's new cloud.

The company is relying on open source tools throughout the platform, in addition to OpenStack, including CentOS and Puppet. The cloud infrastructure includes commodity server hardware from SuperMicro, Juniper Networks networking hardware and storage hardware from SolidFire, which will power the all-SSD storage component that distinguishes the quality-of-service and

performance-focused cloud platform. IWeb indicates that a key distinction for its OpenStack cloud will be an overall performance promise that includes a guarantee of 400 IOPS. It is also using Ubersmith to handle management and billing functions.


At launch, iWeb is making its new cloud platform available only as a managed cloud server product, four monthly-priced configurations of compute and storage resources, delivered as a fully managed service. The bundles range in price from $169 to $339 per month, and include monitoring and support for OS, security, system administration, software installation and patch management. The company intends to roll out additional products over the summer, including resources with

increased performance guarantees, and a self-service, unmanaged and hourly billed

infrastructure-as-a-service product based on the same platform. IWeb suggests the limited launch is a way for it to ramp up the platform in a controlled way, and brings it to market in a higher-value configuration than a self-serve offering of raw resources. It believes the initial products, basically a bundle of services the company intends to make available in a more à la carte fashion later, are the best representation of the price/performance advantages of the platform.

While iWeb will immediately begin selling the OpenStack-based cloud platform in place of its first-generation cloud, the company says certain current customers have asked to remain on that platform, and will continue to be able to use it, and provision new resources.


IWeb was an early innovator in the smart servers space, applying a virtualization layer to dedicated server hardware, in order to apply some of the provisioning, scaling, migration and availability advantages of cloud to bare metal in a one-hypervisor-per-machine configuration.

Both its original and new cloud products are in line with that strategy, complementing rather than replacing dedicated resources, and contributing to the overall consumption of infrastructure and managed services by the company's customers.

Rather than going directly after new business from pure public cloud customers, iWeb is targeting its existing install base with the new cloud product, providing resources that can run alongside dedicated servers, or that can handle migration to and from a smart server environment. As operator of a production OpenStack cloud, iWeb intends to produce code of its own and contribute it back to the OpenStack community.


IWeb's OpenStack-powered public cloud, once its unmanaged and self-serve components are available, will offer a product comparable (potentially preferable, by performance measures) to the


compete in that space. The company's primary competition remains the major players in the dedicated and managed server hosting space, particularly those providing additional cloud products, or cloud-like advantages via the smart-servers-style use of virtualization, including SoftLayer, SingleHop, OVH, LiquidWeb, Codero and others. In the colocation market, iWeb

competes more based on geography, with Canadian colocation providers including PEER 1 Hosting (acquired by Cogeco), Q9 Networks (acquired by Bell Canada), TELUS and BLACKIRON Data

(recently acquired by Rogers Communications).

The 451 Take

IWeb has been growing quickly for nearly a decade, and has been one of the leaders in advancing the value of dedicated server resources through the application of virtualization and automation technology. It isn't the first dedicated server business to enable customers to provision across dedicated and cloud resources, but it is keeping pace with the growing expectations of the dedicated and managed hosting business.

The move to OpenStack gets the company's developer resources off the endless task of producing a feature complete cloud platform in-house, and it makes iWeb one of the still fairly small group of service providers operating a production public cloud on OpenStack, and the only one of its immediate competitors operating on the platform. While OpenStack itself is not a differentiator, iWeb's emphasis and engineering around storage performance should speak directly to the needs of its customers and non-customers in the company's wheelhouse.


Reproduced by permission of The 451 Group; © 2013. This report was originally published within 451 Research’s Daily T1R. For additional information on 451 Research or to apply for trial access, go to: www.451research.com




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