EngineYard & future of Web 2.0 infrastructure

EngineYard, a Sacramento, California-based start-up that has developed expertise in providing managed Ruby-on-Rails (RoR) application deployment environments, and a smart two-pronged go to market strategy, is fast becoming a major trend.

Lance Walley, co-founder of EngineYard argues that if you are a business that depends on RoR applications or you’re a RoR application developer, you should not have to muck around with the innards of the systems. Instead, use their service, pay monthly (for what you use) and focus instead on what you know best: developing and deploying applications. (See how it works: PDF.)

This is not the first time a company has provided hosted environments. 3Tera, a company that provides a set of web services in a similar hosted environment, comes to mind.

What is different about EngineYard, however is their hyper specialization, and their business model. Typically companies offering hosted environments offer an extremely large and complicated menu of services, without much expertise in any one specific environment. There are other examples of hyper specialization, such as companies providing hosted PHP or Perl.

EngineYard offers two different types of services: a RoR development and deployment environment using virtual server slices and an installation, service and support of dedicated on-site RoR appliances for larger customers. Lance explains that many companies like to start on EngineYard’s virtual slice service, but they often quickly upgrade to dedicated appliances.

By using the EngineYard service for a few months, developers can judge for themselves how good (and scalable) EngineYard services really are without banking on marketing spiel. The biggest downside of the upgrades is that EngineYard will have to constantly add more support staff, which means that the cost advantages of running a large cluster could simply vanish.

Despite that, I think that we’re about to see a trend of web2.0 infrastructure services use a similar dual-pronged go-to-market strategy as Engine Yard.

Allan Leinwand is a venture partner with Panorama Capital and founder of Vyatta. He was also the CTO of Digital Island.