Skytap's strategy: Get into the enterprise through test and dev

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It's a noisy market out there for cloud services, with more service providers starting up than the market can handle. This week, Skytap rolled out a couple of new features that makes clear its strategy for getting a foothold in the competitive market. So far that strategy seems to be working, with Skytap attracting customers including Google, Boeing, IBM and HP.

Skytap is an infrastructure-as-a-service provider that from the start identified three main use cases it caters to: test and dev, virtual training and software demos. That has long struck me as odd since those applications are all temporary. Why not go for longer term, ongoing business? I got an answer to that question when I spoke with Brett Goodwin, vp of marketing, about the company's news this week.

Those targeted applications tend to require a hybrid environment and the company has seen hybrid clouds increase in adoption among existing customers and in interest from prospects, Goodwin said.

Skytap's new multi-VPN feature introduced this week caters to that continued demand for hybrid clouds, he said. Customers can now create any number of VPNs between Skytap and their own environments.

There are two primary scenarios that Skytap envisions its customers using the feature. One is users that want to create two-way secure connections between one Skytap virtual environment and multiple on-premise servers. For instance, a user might want to connect the app they're running on Skytap with Active Directory, databases with sensitive data and a source code server, all running internally.

Without the multiple VPN capability, customers would have to route traffic over internal networks back to the office that has the single VPN connection or relocate resources, Goodwin said. That can get complicated and time consuming. "Our customers that started to have larger and larger test and dev environments were pushing this need," he said.

The second scenario is for customers who want to connect multiple Skytap environments with various on-premise end points. That could be useful for a Skytap user that has built individual applications for various customers and wants to create a secure connection to each of those customers to do a demonstration of the app.

Skytap this week also rolled out a scheduler feature that lets users set a date and time to run applications. This is useful particularly for test and dev so customers can do load testing in off-peak hours. It can also be useful to people who use Skytap for running training classes – they can schedule in advance the number of student desks they know they'll need for a session.

After hearing about the new features that seemed primarily aimed at test and dev, I asked Goodwin why the company would target project work instead of ongoing application.

Goodwin told me that going after test and dev isn't necessarily short-term work but that doing so is part of a larger strategy at the company. Since developers tend to iterate their apps, they'll use Skytap each time they are trying out new features.

But test and dev isn't Skytap's long term goal. "Today a lot of enterprises, when they want to move to production, they're still moving production on premise," he said. "Over time as confidence in the reliability of the cloud and the economics of the cloud continue to improve, we'll see more of them move production workloads to the cloud. Our strategy is to be ready for that."

Goodwin criticized some new entrants for not realizing that. "They start with the idea that cloud is the production target. But that's not where the existing enterprise or mid-market companies are today," he said.

While other startup cloud services providers say they're targeting the larger production applications, I suspect that they've learned that many businesses aren't confident enough in the cloud to put mission critical apps on it. The question is have they similarly developed strategies for reeling in customers that might turn to them when they're ready to move their big projects to the cloud. Time will tell because consolidation is surely coming in this market.

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