One of the emergent tends I’m seeing with technology vendors is a move towards offering more long-tail solutions. As pure infrastructure becomes more and more commoditized, vendors are looking for ways to differentiate themselves, one of the most effective ways is to offer specific solutions tailored to a particular customer type or use case. While the addressable market for such specific solutions may be slim, generally this approach drives higher margins for vendors.
One particular targeted market is customers who are looking for a green technology provider – the drivers for this may be purely altruistic, some companies have a preference for environmentally sustainable offerings wherever possible. Other times however there is a commercial gain to be made by claiming green credibility for your infrastructure.
One company specifically targeting this opportunity is GreenQloud, a Iceland-based company that is selling carbon-neutral cloud services – hosting and storage. The electricity GreenQloud uses in it’s Icelandic data centers was generated through hydroelectric and geothermal sources – renewable and carbon-friendly. GreenQloud is Amazon AWS-compatable and promises 20%-40% cost savings to their customers, driven because of their lower environmental costs.
I’ve always liked the GreenQloud story but have been concerned about how they’ll scale it beyond their hoe market – while organizations might be keen to use environmentally friendly infrastructure services, they aren’t so keen when they are only available in one location. Since launch however GreenQloud has been working hard on extending its reach and when I spoke with founder Eirikur Hrafnsson in Texas recently, he told me that they’re actively looking for more carbon-neutral data centers to leverage for their service. They have one location on the West Coast of the US that is soon to go live and they’re looking at other options internationally.
Beyond the granularity of location however, GreenQloud is also looking to move up the value stack and recently announced the launch of QloudSync, a Dropbox-like Cloud storage and syncing client. Essentially QloudSync allows GreenQloud to drive up the usage of its own infrastructure service, and therefore increase the economies of scale that they’re able to offer to their own infrastructure clients. At the same time QloudSync allows them to move up the value stack and offer higher-level services to customers who want more than base infrastructure.
So, what is QloudSync? Quite simply, it’s a produce that allows users to store data (documents, images, videos, audio) on carbon-neutral storage. Like Dropbox and other providers it allows users to access, synchronise and share their data across the web. QloudSync also includes native audio and image applications so images and audio files can be streamed directly within the GreenQloud storage. QloudSync has another strong in its bow however, QloudSync is storaed on GreenQloud’s Icelandic infrastructure and hence is offering customers a safety net from issues around SOPA, PIPA, ACTA and the Patriot Act – all laws that potentially give US agencies the right to peer within data – while the jury is out about how much of a risk these US legislations are, and while it is true that the MegaUpload situation showed that US influence extends far beyond where its legislation goes – it’s a selling point that many non US organizations and individuals are keen to hear.
Geographic granularity, and offering higher value services on top of infrastructure is an absolute no-brainer. That said, I have a couple of concerns about what GreenQloud is trying to do here. Firstly, their strong “not located in the US” stance, means that once their US based infrastructure comes online, they’ll have to actively segregate their different infrastructure locations. Arguable this is both difficult technically, but also having US based infrastructure someone dilutes the strength of the “non US” messaging. Add to this the fact that MegaUpload showed just how long the arm of US regulators is and you have a point of differentiation that is, perhaps, a little tenuous.
The other question I have is something I discussed with a friend during the QloudSync product launch and that is how dilutive the QloudSync story is to GreenQloud’s core proposition. Moving directly from raw compute and storage, all the way up to client side offerings in one hit is, arguable, a big jump for the company. I’m reasonably comfortable about this as QloudSync seems primarily pitched as a consumer offering – as such there is little overlap between Greenloud’s core customers (those using its infrastructure products) and those who are likely to use QloudSync.
I’m a bit of a greenie at heart (beyond my horrendous travel-related carbon footprint). All things being equal I’d prefer to use a vendor that can guarantee that my cloud services have a neutral carbon impact. GreenQloud ticks this box and hence it should be seen as an indication of where at least a proportion of the industry will go.
The video below is from Structure Europe last year. My friend Paul Miller interviews GreenQloud founder Hrafnsson – well worth a watch.