Verizon launches new built-from-scratch enterprise cloud

Verizon(s vz) isn’t the first name that comes to mind when you think of enterprise cloud, but it’s fielded respectable, mostly VMware-based cloud services for some time. Now it’s shaking things up a bit with a new enterprise cloud based on optimized Xen hypervisors and which borrows heavily from CloudStack. (Verizon cautioned against saying it is based on CloudStack. Hmmm.)

John Considine, Verizon’s CTO wants you to know that the company spent 5 years researching cloud and built this new Verizon Cloud offering from the ground up. “We used Xen hypervisor as baseline and enhanced that to allow higher performance and have more control over performance and enhanced it to run different VM formats natively,” he said in an interview.

“If you now use VMware(s vmw) in the enterprise and want to move workloads or use the same golden image and tools and drivers … you can’t quite do that in Amazon(s amzn) which dictates the kernels and drivers you use. We enhanced the hypervisor to support VMware drivers and toolsets,” he said.’

Can Verizon Cloud compete with Amazon and the biggest boys?

That would be a big deal if it works as advertised. Most enterprises now rely heavily on VMware in-house and want a way to move some of at workloads to the cloud. Such “seamlessness” of migration is one of the key sales pitches for VMware’s new vCloud Hybrid Services public cloud, for example, Verizon will be competing for those same customers.

The Verizon Cloud will let enterprises dial up (or down) and pay for performance requirements depending on VMs, storage, network as needed, CTO John Considine said in an interview.

“We offer reserved performance — for every VM, you can set the performance level. Or you can say I want this NIC to run at this speed or i want disk to run at 100 or 1,000 IOPS, you can do that,” he said.  “The whole notion of the noisy neighbor is off the table.”

That  “noisy neighbor” syndrome occurs in shared multi-tenant infrastructure when someone else on the same virtual machine hogs resources hurting the performance of your workload.

Considine announced  Verizon Cloud on Thursday at Interop and public beta will be available later this quarter.. A private beta has been running since December 2012. Much of the heavy lifting for this cloud comes out of Cloudswitch, a Burlington, Mass. company Verizon bought two years ago.

A long road ahead

The jury is out whether Verizon will soon be counted in the top tier of cloud providers. While it does have some of the enterprise customers AWS craves, it does not have the same huge brand recognition. If the CIO of a major company thinks “cloud” he or she will think AWS way before Verizon.

GigaOM Research Analyst David Linthicum said the current Verizon/Terremark cloud hasn’t set the world on fire, but it does offer sound options. And, Terremark itself has a good reputation in  government accounts — and that arena is becoming hotly contested as AWS and Google create government-specific clouds.

This is clearly an ambitious undertaking and some analysts gave Verizon props for doing its homework.”Please God, nobody start calling it ‘cloud 2.0’ but that’s kind of what it is,” said 451 Research Analyst Carl Brooks via email. “It has technical stuff baked in that earlier IaaS services have had to glue on after the fact; it is starting from where other services ended up after 5 years of evolution and development with commercial gear designed with IaaS in mind. That is huge when it comes to speeding up innovation.”

I have a few nagging questions about today’s news.

First, why is the Terremark name conspicuously missing here? Verizon bought Terremark, a provider of cloud services in 2011 for $1.4 billion. And up till now the Terremark name was  closely associated with Verizon’s cloud effort. Update: ITWorld reports that Terremark will continue to be the brand of the legacy cloud services.

Second, Why the insistence on saying Verizon Cloud “borrows heavily” from but is not based on CloudStack?

And, critically for the enterprise accounts Verizon wants to capture, how easily will VWware workloads really carry over to this new infrastructure?

But  perhaps most importantly, will Verizon be able to woo big enterprise customers that want to take advantage of the flexibility and scale of cloud infrastructure but may be nervous about deploying on Amazon.  And can Verizon offer pricing that’s even in the ballpark with AWS?

In other words: Stay tuned.

Note: This story was updated at 9:06 a.m. with additional information on the Terremark branding.