Restoring Faith in The Cloud

Given the unfortunate and sudden demise of Nirvanix, Cloud Storage and Cloud Application providers are coming under greater scrutiny, as they should be. After all, their customers rely on these public cloud providers for some essential business services, similar to the way a consumer relies on their public utility.

One of these companies, Barracuda Networks, is a provider of various cloud enabled solutions including security, backup and file sharing. In business since 2002 they filed last week to become a publicly traded company, with the Initial Public Offering (IPO) expected to raise over $100 million. With this capital infusion Barracuda is positioned to expand their presence in the cloud-based services market with investments in infrastructure and new product offerings.

CEO BJ Jenkins came from EMC, where he spent 25 years running the services business, which for EMC is their bread and butter, and then later took over Backup and Recovery Systems, which has become EMC’s fastest growing division. He certainly knows enterprise IT, ‘big storage’ and how to sell professional services, but that’s not where he’s taking this company.

Barracuda’s customers are mid-sized companies with smaller IT departments that have to get it done with fewer staff and short budgets. For these companies and an increasing percentage of overall IT organizations, the cloud is part of their IT current infrastructures and is likely to be a bigger part of their future IT strategy. It’s a delivery mechanism that becomes more viable every year as the cost of bandwidth, processing power and storage go down – and the cost of IT expertise, power and data center floorspace goes up. But using cloud-based IT services is also out-sourcing, a step that brings its own risks and merits careful consideration by potential users.

Cloud-based business services like backup, file sharing and security are best delivered with a hybrid infrastructure, meaning data is stored on a local appliance, typically a turnkey system or software that runs on existing hardware. This appliance also handles the connection and transmission of data to the provider’s cloud.

For their part, the provider should have multiple tier-1 cloud data centers and an established, capable help desk infrastructure that can support the types of end users they’re selling to. Also, a cloud provider company should have a strong financial foundation (a history of business success) and a reputation that users can trust, since many will be relying on that cloud provider as they do a public utility. This last point is especially pertinent given the recent demise of Nirvanix.

Storage Swiss Take

Barracuda Networks for the past ten years has been quietly building a company that meets all these requirements. They have strong name recognition, a very large customer base, data centers around the world and a technology platform that can support a host of cloud-based services. With a focus on the hybrid appliance model, the right model in our opinion for bringing cloud-based business services to the market, they’re in position to easily expand their offerings.

This should be welcomed by their client base since buying new services from an existing supplier is always preferable to conducting a new vendor search, especially for mid-market IT managers who are already stretched too thin. With this IPO Barracuda will have the financial resources to further develop their technology, more fully service their customer base and help provide some stability in the cloud service provider market.

Barracuda is a client of Storage Switzerland

Eric is an Analyst with Storage Switzerland and has over 25 years experience in high-technology industries. He’s held technical, management and marketing positions in the computer storage, instrumentation, digital imaging and test equipment fields. He has spent the past 15 years in the data storage field, with storage hardware manufacturers and as a national storage integrator, designing and implementing open systems storage solutions for companies in the Western United States.  Eric earned degrees in electrical/computer engineering from the University of Colorado and marketing from California State University, Humboldt.  He and his wife live in Colorado and have twins in college.

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