U.K.’s ElasticHosts opens cloud data centre in Toronto

A hosting company based out of the U.K. is hoping that a data centre located in Toronto will convince Canadian businesses fearful of the U.S. Patriot Act to take a cloud computing approach to managing their IT infrastructure.

ElasticHosts this week announced an expansion of its footprint in the North American market that also included a facility in Los Angeles. The company already offered hosting services out of San Antonio, Tex. in addition to its main office in London.

Like many others, ElasticHosts offers servers which companies can use to increase or decrease the computing capacity they need on demand. The company has traditionally found traction in the U.K.’s small and medium-sized enterprise market, and will be offering a five-day free trial. Compute capacity is billed by the hour, starting at six cents per hour, or $44 per month.

Richard Davies, the company’s president and founder, said the company hopes to set itself apart in the market by offering services that are more flexible and easy to use than what is normally targeted at customers.

“Amazon is something that’s targeted to a hard-core developer. We wanted to build something easier to use that behaves more like a traditional computer, rather than a world of APIs and acronyms that are completely specific,” he said. “This is something that has a really clean, simple Web interface on the front of it.”

The company will also ensure customers freedom to scale CPUs, disk space or RAM rather than choose from a set of 20 servers or other fixed options. “You’ll be able to say, ‘I want this many cores, this many Megahertz, this amount of disk,’” said Davies.

ElasticHosts realized that it couldn’t serve the entire North American market from a single location back in 2010, and setting up a site in Canada made strategic sense.

“We saw how cloud computing is quite a developed market in the U.S,” he said. “Think of Google, Rackspace, Amazon. The number of these people who have significant presence north of the border is a lot lower. We realized that we had European customers who wanted to be in North America, and who didn’t mind where they were. Some preferred to be out of the U.S. for tax reasons or other reasons. Then there is the Canadian market of customers who are actually growing out of the U.S.”

Some Canadian companies have been gun-shy about putting IT into a public cloud for fear data will fall under the U.S. Patriot Act or Digital Millennium Copyright Act (DCMA). According to Mark Schrutt, director of services and enterprise applications at Toronto-based market research firm IDC Canada, ElasticHosts is the third firm to offer cross-border cloud hosting after Centrilogix an Peer 1. He said there was still room for new entrants.

“There is growing demand but lack of supply, as there are only a few Canadian cloud vendors providing infrastructure as a service (IaaS) today,” he said via e-mail. “This will change and this firm is an example of one of many that will release offerings in 2012. The field will begin to get crowded.”

Davies said North American clients tend to be a lot bigger than those in the U.K. in terms of the number of servers they need and the traffic they get. Most move to the cloud either as part of a new build or as they deal with a system that’s reached its end-of-life.

“I would say that the majority of the time the move to a cloud computing platform part of some wider IT-refresh as opposed to taking the same stuff and moving it,” he said. “You don’t see many large enterprises with a data centre today who are going to migrate the same applications.”

Although ElasticHosts will be doing some hiring Davies said the firm saw little need for a many additional staff in Toronto.

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