potentially locking them in,” she says. “We are coming from the other perspective. The enterprise customer doesn’t want to be locked in.”
Rubin says the 20-employee startup is just finishing private beta tests with companies in the healthcare, pharmaceuticals, telecommunications, software, and cleantech areas. “That was a tremendous learning opportunity in every possible dimension,” she says. “We had a chance to see some of the things that needed streamlining in terms of ease of use and simplicity of the product, which is really critical for us, particularly because we want this to be a downloadable, self-service thing. We’ve made a lot of changes based on what would be the most comfortable.”
Discussions with beta customers also helped CloudSwitch settle on a pricing model, according to McEleney. “We tested a few flavors, but the way it netted out, people wanted a level of predictability in terms of their spend,” he says. “So they will buy our product as an annual subscription that comes with [a license for] a certain number of servers.” For $25,000 per year, CloudSwitch customers will be able to project up to 20 server instances into the cloud.
In the short run, spending an extra $25,000 per year for CloudSwitch’s software might not save companies any money, since they’ll still be paying for their on-premises infrastructure, not to mention the per-minute charges from Amazon or other cloud providers. But in the longer term, the software will allow companies to cut back on new hardware purchase, McEleney says. “Customers are saying they have this ongoing, never-ending expansion because of all the stuff that gets used once in a blue moon but still takes up very expensive infrastructure,” he says. “If they knew they could offload that, they wouldn’t have to keep growing their footprint.”
McEleney says CloudSwitch is expanding its beta testing program this quarter, and plans to make the full enterprise version of its product generally available by the end of the next. It will provide limited-time free trial version of the enterprise product—and, interestingly, a downsized edition called CloudSwitch Explorer that will be permanently free.
“The only difference between the enterprise version and Explorer is that Explorer is for one user, up to five servers, and one cloud,” says Rubin. “It’s meant for people who are want to try the cloud and understand how it might work for them. We’re going to make it incredibly easy, secure, comfortable, and familiar for them to take their first application and move it into the cloud. Hopefully that will let us have a conversation about taking the enterprise app to a true IT deployment.”
CloudSwitch raised $8 million last summer from Commonwealth Capital Ventures, Matrix Partners, and Atlas Venture, bringing its total funding to just over $15 million. The company won’t have to raise new funds anytime soon, McEleney says: “We are fine well into 2011, depending on what happens business-wise.” The technological and economic winds seem to be in the company’s favor; now the question is how adventurous its potential customers are feeling about taking to the clouds.
CloudSwitch Video Demo
