Verizon boosts cloud services with CloudSwitch buy

CloudSwitch software will be added to Verizon's Terremark IT services subsidiary to help users move apps to the cloud

Verizon on Thursday said it has acquired CloudSwitch and plans to use its cloud software to help enterprise customers more easily move applications to Verizon's Terremark environment.

Terms of the deal weren't disclosed.

CloudSwitch, based in Burlington, Mass., has sold its software to about 15 large companies, mostly in the banking, media and pharmaceutical industries, said Ellen Rubin, co-founder and vice president of products at CloudSwitch. She named Novartis and Biogen Idec as customers.

The CloudSwitch software has been available for about a year, she added.

Verizon said it will combine CloudSwitch and its Terremark IT services subsidiary, which sells cloud and security services to large companies and organizations.

Verizon officials said it has yet to be determined whether the CloudSwitch software will be priced separately or as a part of Terremark's overall services fee.

CloudSwitch has sold its software starting at $25,000 for an annual subscription, plus further charges based on the number of virtual machines being used, Rubin said.

Many large companies have been reluctant to put legacy applications on cloud computing servers run by third parties, partly due to both the complexity of the task and security concerns, analysts said.

"IT shops don't want to have to reengineer applications or rearchitecture [to join the cloud] -- and they don't want to lose control over who has the applications," Rubin said. "There are a set of barriers that enterprises are facing and we make it easier for starting up."

Chris Gesell, chief innovation and strategy officer at Verizon Terremark, said there is a "level of effort ... to move content to the cloud and this software removes that level of effort and cost and extends a customer's LAN security to the cloud."

Rubin said the CloudSwitch can be installed in a customer's data center in about 20 minutes. Once installed, it lets users create new applications or move legacy applications into the cloud.

"It will act just as in their own data center," she explained, as IT managers would use the same directories and network monitoring tools as always.

IT shops can also use the software to locate applications in multiple clouds, Rubin said.

CloudSwitch works by launching an encryption tunnel into the cloud, bridging the customer and the cloud so that the network configuration, IP address, hypervisor and other settings are maintained.

Rubin said CloudSwitch uses technology that creates an abstraction layer between the cloud and the application. The abstraction layer encrypts all the data and makes it impossible for the cloud provider to get the encryption key, she added.

Melanie Posey, an analyst at IDC, said the CloudSwitch technology will enhance Verizon's value as a cloud services provider, especially when compared to the "bare-metal cloud compute approach of an Amazon."

The acquisition should help Verizon-Terremark differentiate their cloud offering from big cloud providers such as Amazon and Rackspace, she added.

Legacy apps are especially hard to locate in the cloud, but CloudSwitch can help companies migrate legacy apps to the cloud "and manage these apps using the existing IT stack currently in the data centers," Posey said.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen, or subscribe to Matt's RSS feed . His e-mail address is

Copyright © 2011 IDG Communications, Inc.

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