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8/25/2011
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Verizon Buys CloudSwitch, Targets Lock-In Fears

CloudSwitch buy gives telecom giant's Terremark unit software designed to ease the pain of cloud transitions and moves.

Verizon said Thursday that it has acquired CloudSwitch, a software startup whose technology helps IT teams move applications and services from local data centers to cloud-based options and between third-party clouds.

Verizon said it plans to integrate CloudSwitch's operations into its Terremark IT services and hosting unit. Financial terms of the deal were not released.

CloudSwitch offers software that effectively provides a bridge to the cloud for local apps. It has produced in software an "isolation layer" for an enterprise workload. By using it, a cloud customer may leave an existing application in its VMware virtual machine format, but move work into the cloud. The isolation layer can translate that workload to the cloud's virtual machine hypervisor. Amazon, for example, uses a version of the Xen open source hypervisor, not VMware's ESX Server.

CloudSwitch founder and VP of products Ellen Rubin said the translation takes place using encrypted code. She said the isolation layer allows on-premises monitoring systems to continue to track the application and maintain its existing security policies. "From the user's perspective, it's point and click and the application is running in the cloud," said Rubin, in an interview.

Boston-based CloudSwitch launched last year with funding from Matrix Partners, Atlas Ventures, and Commonwealth Capital Ventures. It currently has about 15 enterprise customers, including pharmaceutical company Biogen Idec, and 30 employees.

CloudSwitch's software uses an API to effectively create an encrypted tunnel to the cloud provider's servers, where a virtual instance is stood up on behalf of the customer. The customer's apps, as well as security policies and related services, are then mapped over to the cloud. "All the management and monitoring continues to work; users don't even need to know that their application is running in the cloud," said Rubin.

CloudSwitch's software can be used in a similar fashion to move a customer's apps from one cloud to another to reduce the prospect of "lock-in," one of CIOs' most frequently cited concerns about moving their applications to the cloud. Many CIOs are adopting a piecemeal approach to the cloud, starting with small, departmental migrations until their technology concerns are satisfied.

Verizon officials said CloudSwitch's technology should spur the adoption of cloud services by removing fear of lock-in and other significant migration pain points. "We couldn't find anything else like this," said Kerry Bailey, president of Verizon's Terremark unit, in an interview.

"We've always maintained that the cloud should be open, that APIs should be open, and that we must overcome this issue of cloud lock-in."

Bailey said Verizon's cloud services business, including Terremark, is growing at about 30% annually. The company plans to use CloudSwitch's Boston base as a hub for further software development efforts under its cloud strategy. Rubin said she plans to stay on with the company and will report to Bailey.

Verizon acquired Terremark earlier this year for $1.4 billion.

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