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Cloud power

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Articles - May 2014
Monday, April 28, 2014

Puppet Labs, which Kersten left Google to join in 2011, has emerged as a leader among Oregon businesses making those resources more effective. Last year the firm more than doubled its Portland-based staff, along with its sales, as companies like Kaiser Permanente, Bank of America and REI put Puppet Labs’ software to use. Puppet Labs’ products automate tasks such as configuring new servers, implementing software updates and many other repetitive IT duties that can eat up a system administrator’s time and limit how fast a digital product can deploy. For many clients, Kersten says, it has created efficiencies that cut the timeline for launching new applications from a year or more to mere days or weeks.

 Cloud IMG 1741
Cloudability's downtown Portland office 

That kind of automation will become increasingly critical to manage the crush of information created online every day. Cisco has forecast that global data-center traffic will triple between 2012 and 2017, when cloud applications are expected to represent two-thirds of that activity.

The ongoing migration of IT tasks to the cloud will raise its own set of challenges for managers, says Mat Ellis, founder of Portland startup Cloudability. He offers up an analogy: a vertically integrated pencil manufacturer that transitioned from ownership of graphite mines and sawmills to a company that purchases its raw materials on the open market and works with dozens of suppliers to handle everything outside the final-product assembly. As with outsourcing physical tasks, companies that turn to online businesses for IT services will have to develop new ways to integrate vendors, monitor costs and ensure quality.

“A new set of tools and processes have to bubble up, and it’s very similar to the challenges businesses had when they stopped owning every part of their supply chain,” he says. Ellis, a U.K. native, recounts how he moved to the Portland area during the recession to be closer to his wife’s family after the arrival of their second child. He started consulting to pay the bills and discovered that his large clients had only a loose grasp of where their spending for Amazon AWS and other cloud providers went. That prompted him to write a cost-tracking program that would become Cloudability, which Ellis says reveals efficiencies that frequently cut users’ cloud spending by one-fifth or more.

In the three years since Cloudability formed, the startup has grown to 27 employees, raised about $10 million in capital and now monitors nearly $1 billion in spending on behalf of its customers. That rapid expansion happened, in part, thanks to Ellis’ own use of the cloud to grow.

“It’s easier than ever to start up a company. This is my fifth one, and on the previous four we had to go spend $1 million to $2 million to get into a data center,” he says. “Now you can just plug in a credit card and pay $0.80 an hour.”

Other cloud-centered companies in Oregon include Elemental Technologies, which lets media outlets such as the BBC and ESPN process video streams in the cloud before they’re delivered to viewers. Portland also hosts most of the research and development team for San Francisco-based New Relic, which enables real-time performance monitoring and business analytics for app developers. It quadrupled the size of its office space downtown in 2012.


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