Yahoo Founder Jerry Yang Backs OpenStack 'Metacloud'

There are many software platforms designed to transform a "normal" data center into a private Amazon-style cloud, but the one getting the most buzz lately is OpenStack. On Monday, Metacloud announced that it has raised an undisclosed amount of money from Storm Partners and Yahoo co-founder and former CEO Jerry Yang for its own OpenStack venture.
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Yahoo co-founder and former CEO Jerry YangImage: Yahoo

There are many software platforms designed to transform your data center into an Amazon-style cloud, but the one getting the most buzz lately is OpenStack.

OpenStack was originally built by NASA with help from an outfit called Anso Labs, but there's now a large ecosystem of companies contributing to the project -- and trying to make money from it. There's Nebula, founded by former NASA CTO Chris Kemp. And then there's Rackspace, which co-founded the OpenStack project with NASA and later acquired Anso Labs. And that's not to mention all the other big name IT companies who've jumped on the bandwagon, including everyone from Red Hat to HP.

But that hasn't stopped Metacloud from joining the fray. On Monday, the startup announced that it has raised an undisclosed amount of money from venture capital firm Storm Partners and Yahoo co-founder and former CEO Jerry Yang's AME Cloud Ventures for its own OpenStack effort.

But Metacloud isn't just banking on a big name investor. Its founders think they've got a twist the OpenStack idea that will give them an edge over the competition.

Metacloud helps you build a "private cloud," meaning it's only used within your organization. But it wants to make this as much like the sort of "public cloud" operated buy Amazon. "What people like about the public cloud is not that it's public. It's that it is fully managed," says co-founder and CTO Sean Lynch. When companies use Amazon Web Services, they don't have to manage their servers or infrastructure. So Metacloud is not just building private clouds for customers, but fully managing them as well.

"We take our client's bare metal and design and operate their cloud on their behalf," Lynch says.

Metacloud is basically an IT outsourcing company, but it's not entirely dependent on services. The company builds its clouds with a custom distribution of OpenStack that includes some exclusive features for automating deployment, scaling, and fail over. These are the features Lynch believes will enable them to offer that public cloud experience without ever having to take servers off the customers' premises.

Lynch claims Metacloud's subscription rate is much cheaper than running in the public cloud, even if you end up buying all new hardware. He also says the company has already landed some Fortune 100 customers, but he can't disclose which ones.

Metacloud was founded about a year ago by Lynch and CEO Steve Curry. Curry managed global storage for Yahoo, and Lynch handled IT operations at Ticketmaster, where his team built a private cloud infrastructure. While at Ticketmaster, Lynch worked on Spine, an open source framework for managing large numbers of Red Hat Linux systems that Metacloud is incorporating into its service.

Lynch says that when they started out the team tried to use Apache CloudStack, the open source private cloud system backed by Citrix and formerly known as Cloud.com. But Lynch says they gave up on it because it wasn't modular enough.

"It's a huge monolithic Java application," he says. "We knew going into it that we would have to add extensions to it, but it's difficult to add to CloudStack." He also believes that OpenStack's networking model is more scalable. Plus, OpenStack is written in the Python programming language, which Lynch says the team is more familiar with than Java.

Even with all the competition, Curry and Lynch remain confident their company won't be lost in the shuffle. "You can't just setup a cloud for someone and disappear," Lynch says. "To make this work you have to be in there every day running the cloud."