Loudcloud slashes outsourcing starting point

In a move to attract customers unwilling to bite on its fully outsourced Web site management offering, Loudcloud this week unveiled Managed Services 3.0, an expanded range of services equipped with a radically reduced pricing scheme and customized hosted solution.

Beginning at US$10,000 per month, Loudcloud Inc.'s Managed Services 3.0 subscription model has been tweaked to appease customers eager to begin its relationship with the MSP (managed services provider) through a low-risk pilot or static Web site deployment that could expand in complexity over time, said Frank Chen, director of product services for Sunnyvale, California-based Loudcloud.

The new service offerings will fall into three categories. In order of adjoining services and technical level of support, they include Loudcloud Deployment and Launch Services, Loudcoud eBusiness Hosting Services, and Loudcloud Client Services.

Chen admits that Loudcloud's heavy-handed approach may have been too much to swallow for come customers with little need of a comprehensive pre-bundled arrangement of services for their Web site management purposes.

"We brought a very dedicated level of support, and for people who are starting small that's just overkill," said Chen. "[With Managed Services 3.0] we're bringing all of our optimization [in] OpsWare automation technology to even smaller sites. When [customers] need to get bigger they scale with quality."

Ted Chamberlin, network analyst for Stamford, Connecticut-based Gartner, said Loudcloud's initial and rigid high-end Web site infrastructure and services play may in some cases have caused more harm than good, shutting out a growing portion of mid-to-smaller-end enterprises.

"When Loudcloud came to market, they thought big all the way. They didn't understand all clients have different needs," said Chamberlin. "[Loudcloud] would include stuff like unlimited code pushes and rollbacks within a tight timeframe. With a typical communications [Web hoster] company, that would be extra."

Although it should open doors to new business, Chamberlin was quick to note that as a direct consequence, a new challenge lay ahead for the MSP. Namely, the company must articulate to large Loudcloud clients that it is not the same level of service that has become cheaper but rather a subset of access to high-end services. Also, he said if Loudcloud starts to manage too many unbundled elements for customized relationships, the company is "bound to drop the ball somewhere."

"By supporting different flavors, your small manageable pond starts to grow into a big lake, and how much hand-holding can you do when you have that many clients? I would hate to see that diluted," remarked Chamberlin.

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