Loudcloud offers "pick and choose" managed services

Internet infrastructure management provider Loudcloud Inc. on Monday said it is offering enterprises a menu of options to choose from when deciding which Internet operations they want to outsource.

"Where there used to be a one-size-fits all service, we are making these services modular, where the customer can pick and choose," said Angela Rizzo, Sunnyvale, California-based Loudcloud's director of product management.

Enterprise customers can now select from several application management service offerings, including monitoring and reporting, risk management, application and database support, she said.

The cost to enterprises of using Loudcloud's entire system -- about US$100,000 a month -- will be reduced if fewer network management needs are outsourced, Loudcloud officials said.

One analyst said that the approach of offering services as components makes sense by allowing enterprise customers to see how well outsourcing works and how much costs can be achieved.

"Loudcloud is offering them (enterprises) exactly what they want," said Jeanne Schaaf, senior analyst with Forrester Research in Cambridge, Massachusetts. "Not every customer wants to outsource their whole Web site.

Ed Godycki, chief technical officer of online movie ticket vendor Fandango, in Santa Monica, California, said his company is content to have Loudcloud manage the company's network. Still, the full Loudcloud service, "shoehorns you into their model of how managed services should work," Goycki said.

But Godycki said he plans to continue to use the full service. "They are managing my networks 100 percent and I sleep well knowing that," he said.

Loudcloud, started in October 1999 by Netscape co-founder Marc Andreessen, is jockeying for position in an extremely competitive managed services provider market, said Bill Martorelli, analyst with the Newton, Massachusetts-based Hurwitz Group. The competition includes Totality, Digex, Intira, as well as the service arms of IBM and Intel.

"What Loudcloud is doing is eliminating some sources of potential customer objections, because the perception of being high-priced has dogged them," Martorelli said. "They are taking good steps to make themselves viable and attractive.

Loudcloud raised $140 million in a public stock offering in February, and reported a lost $63 million net loss in June.

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