Friday, May 15, 2009

Citrix Jumps on Cloud Hosting Bandwagon

The cloud hosting & service provider market seem to be becoming the key battle ground for cloud enablers formerly known as virtualization vendors. Following upon recent announcements from VMware and Cisco, Citrix has announced a Service Provider Program aimed squarely at service/hosting providers who deliver software services and hosted applications to end-user customers on a rental, subscription or services basis, A.K.A. Cloud Service Providers (CSP).

The most interesting aspect of the new program has to do with Citrix's approach to billing. The program is designed with cloud business goals in mind with no up-front license fee commitments. Cloud hosters need only submit monthly usage reports and are invoiced accordingly. The program is being offered as part of Citrix Cloud Center (C3) which they describe as designed to give cloud providers a complete set of service delivery infrastructure building blocks for hosting, managing and delivering cloud-based computing services.

I find this per-use approach to software billing particularly interesting. For Enomaly's forth coming ECP Service Provider Edition we also decided to use a similar approach to billing our hosting customers who were asking to be billed on a monthly usage basis. Similar to Citrix, our approach is based on a per core based rate which calculates the maximum core count in the run of a particular month. In trying to determine the optimal billing approach we found that this allows both the service provider and the cloud vendor to grow in unison, a kind of symbiotic relationship. Simply, the better they do the better we do.

Of course the bigger question in this type of utility usage based billing is finding the right middle ground between self reporting (trust) and automated system reporting. In Citrix's case this is still unclear. What is clear is that service providers are quickly embracing this new per-use enterprise software sales model. It will be interesting to see if the other players in the space start to use a similar approach when offering cloud enablement software & platforms.

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