OnApp buys SolusVM to boost the demand side of its federated marketplace

Cloud automation company OnApp has bought SolusVM, the virtual private server management system, in order to boost demand for the capacity on offer in OnApp’s federation.

London-based OnApp has had an interesting history. It started off providing software for ISPs and old-school hosting outfits to start offering cloud services. Once it had over a thousand of these companies on board, it started federating their spare content delivery network (CDN), storage and compute capacity – first so that they could supply each other through an internal marketplace, and then so they could supply cloud customers through OnApp portals like CDN.net and Cloud.net and through other new virtual service providers.

Problem is, there’s more spare capacity on offer than the other providers in the federation want, and no pure-play virtual service providers have popped up yet. “We’ve got oodles of supply in the marketplace and we’ve got some demand,” OnApp CEO Ditlev Bredahl told me. “We do around 1,000 buys and sells a week in the marketplace, but to be honest I was hoping to do about 10,000 by now.”

The supposed buyers in OnApp’s marketplace would largely be service providers that have limited scale and geographical reach, and that want to serve customers anywhere in the world, providing a credible alternative to the likes of [company]Amazon[/company] Web Services. However, according to OnApp, most of these providers focus their efforts on squeezing what they can out of their own capacity before trying to buy in more through the marketplace.

Hence the SolusVM buy, the price for which was not disclosed. SolusVM is used by thousands of small service providers to manage their virtual private servers (VPS), and OnApp wants those outfits to boost the demand side on its marketplace. As Bredahl explained, the idea is for SolusVM users to see, alongside the option of adding another hypervisor, the option of “simply buying resources you need from the OnApp suppliers, then supplying to your customers a mix of your own infrastructure and excess infrastructure.”

“We think SolusVM clients are likely to think this is an awesome idea,” Bredahl said. “We think the reason these guys aren’t growing as they should be is because of capex limitations that are required to grow.”

This isn’t purely a matter of buying a customer base, though that seems to be the biggest driver – it also gives OnApp something for more bare-bones cloud deployments.

“What we don’t do is VPS and this is where Solus helps out,” Bredahl said. “If Digital Ocean for example had come to look at OnApp, they would have looked at it as over-featured. It’s an enterprise hosting platform, and [many service providers] thought it too complicated. The Solus guys have an extremely intuitive, easy-to-install setup … we’ve closed the gap here.”

SolusVM has relocated from Lincoln in the east of England to London, and the offices have already merged. The platforms will continue on an individual basis with SolusVM retaining its brand. The fact that it was needed is rather worrying, but this move is well underway – now let’s just see if it makes OnApp’s marketplace more worthwhile for all concerned.