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Cloud 49 aims to be tech experts on ground in Alaska

Posted: Thursday, December 30, 2010

Even a business operating in the clouds needs someone on the ground.

In Alaska, Nate Gates is aiming to be what he called that "local throat to choke."

Gates founded Cloud 49 in July after four years as chief information officer for Chenga Corp., an Alaska Native village corporation, and his preliminary expectations have been exceeded as state companies explore and embrace cloud computing technology.

"We thought it would be a slow road the first 12 to 18 months," Gates said. "The Lower 48 is running full bore toward the cloud right now. We've been very surprised from the response we're getting (in Alaska). Everyone is feeling budget crunches, nobody has capital right now, but their IT infrastructure still aging."

Cloud computing -- the remote hosting of both software and physical infrastructure such as servers and data storage -- has three major components: infrastructure as a service, software as a service and software development platforms that use the cloud infrastructure to deliver programs such as web-based applications.

Cloud computing changes the paradigm of information technology from one that is heavy on up-front capital expenses and ongoing maintenance to one that is a pay-as-you go model like an electric utility.

"It's going to change everything," Gates said. "In the industry, no one disputes it will change everything. The only debate is about how long it will take."

Cloud 49 offers what Gates called "tailored cloud solutions" that can include matching a client up with the right cloud hosting provider, suggesting the best existing applications for a particular business or designing an application specific to that business.

With a background in Native corporations -- he was also an IT manager for Arctic Slope Regional Corp. and its subsidiary PetroStar -- Gates knows about the unique needs of Alaska businesses.

"They (ANCs) have a disproportionate benefit because their employee base is so distributed because of the federal contracting they do," Gates said. "They have employees spread all over the world. Hosting those services in Alaska doesn't make sense. The Native corporations' business model lends itself to cloud computing."

Gates is working on software development specific to Native corporations, such as shareholder management programs and scholarship tracking.

Major players in the tech world are already heavily involved in cloud computing, including Google, Yahoo, Amazon, IBM and Microsoft. What Cloud 49 can offer is the knowledge that Rackspace might be a better cloud provider to a small business while a larger company may be more suited for OpSource.

"We keep our thumb on the heartbeat of the cloud," said Gates, whose business partner is Kevin Dobson, formerly Dell's major account manager in Alaska. "We are dedicated to being cloud experts for corporations."

Defining the advantages of cloud computing over traditional IT is can be as simple as comparing the performance of Google mail (or Gmail) to a normal corporate, in-house email running off Microsoft Outlook and a server tucked in a closet.

Not only is Gmail more reliable than typical internal corporate email, it doesn't come with licensing or maintenance or replacement costs. Gates compares it to the turn of the 20th century before a national electric grid when large factories had independent power supplies.

"At the beginning, that was a competitive differential," Gates said of the stand-alone power he compared to a company's independent server platform. "Then it became a cost inhibitor."

Gates said his partner Dobson saw the "writing on the wall" while at Dell serving accounts worth $10 million or more in Alaska.

"Why would I continue to spend thousands on servers when I can rent as much server space as I need from the Internet?" Gates said.

Security of data storage is a frequent question about cloud computing, which Gates answers with another simple analogy -- your safety deposit box at the bank.

"Take a step back and there's a wall of stuff with everyone else's most valuable things around yours," he said. "The reason you do that is you count on the consolidated risk that the bank undertakes forces them to spend disproportionately on risk mitigation.

"They have to make a vault, alarm systems and secure that because the risk is consolidated. You feel more confident putting it there rather than under your mattress or in a gun safe in your garage. Multi-tenancy is not a lack of security. It is more security."

In terms of reliability, Gates said service level agreements guarantee performance or the customer doesn't pay.

"Ask your company IT guy if he can guarantee you the reliability 99.9 percent of the time," Gates said. "You can't."

Gates is also trying to piggyback on the national marketing programs now on the air from Microsoft. Cloud 49 timed its market push to coincide with Microsoft's and now has an opportunity to educate potential customers who may be hearing about cloud computing for the first time.

"You're not going to see any less about the cloud than you are right now," Gates said. "Microsoft and IBM have mobilized a little faster. It is all about the cloud going forward. It is dominating every technical expo right now. It is changing the technical ecosphere.

"It gives us a push as far as the buzz goes; it also gives us a chance to define it -- you've heard about the cloud, here's how it can help your business and how it can help you in Alaska."

The possibilities are virtually endless, and the savings to a start-up business can be tremendous, he said.

"We're selling something that has an immediate effect on business," Gates said. "It's not some gray area like, 'You'll be more efficient.' I'm talking about reducing your (total cost of ownership) by 50 percent in the first year. For start-ups in general, if you can start a business and don't have to hire an IT guy, buy servers, pay for licensing, but start virtually in the cloud -- how much better off are you than your competitor who has $100,000 in overhead on Day One?"

Andrew Jensen can be reached at Andrew.jensen@alaskajournal.com.



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