GridWay builds business on economies of scale

“It’s the power model or the telephone model. It’s fast, it’s cheap, it’s easy,” says Tapper, the director of outsourcing, utility and offshore services in Framingham, Mass. However, he says just providing the raw computing horsepower is not enough. For a utility vendor to succeed, it must provide more. Utility companies must offer applications on top of the power to be successful. “eBay, Google, Yahoo — these are the companies that have the model,” he says.
Those companies that offer just the raw computing power have a tough haul, he says.
“It’s a pretty brutal market.”
However, Ottawa-based GridWay Computing Corp. is one utility vendor that offers raw computing power as well as storage on demand services.
Chris Kramer, chief technology officer at GridWay, says the grid computing services makes up about 50 per cent of the company’s revenues. “The grid computing comes in in spikes,” he says. “The difference is, and the thing that makes or breaks our business in the utility model ,is the client base.”
Whereas it would be costly and wasteful for its clients, such as chip maker Tundra Semiconductor Corp., to maintain a server farm large enough to meet its high computing demand periods, GridWay can wring more use out of its grid, which is based partly on Sun Microsystem’s grid offering.
GridWay’s customers, were they to set up their own systems, would likely only use them to their full capacity 15 to 20 per cent of the time, Kramer says. GridWay, on the other hand, is using its investment for 60 to 70 per cent of the grid’s life cycle.
“We’re generating revenue off that investment, whereas the end user will only use it for 15 to 20 per cent of its life cycle and then replace them.”
GridWay always maintains the fastest processors in its grid, Kramer says. As the computers are replaced, the obsolete models are moved into the company’s network storage array. Currently, GridWay has some 40 Linux compute nodes and 20-odd Sun SPARC processors
“We essentially use every bit of processing we can to the end of its life.”
One of the keys to GridWay’s success, says Kramer, is access to high bandwidth pipes from Telecom Ottawa.
“It has the biggest, baddest, fastest pipes in town.”
Customers then access the extra computing power through a virtual local area network. When customers first sign up, GridWay goes through a discovery phase with them, essentially getting a picture of their environment and securing an image of it on their networks.
“Then we can build machines very easily using that technology.” The exact flavour of an operating system that a customer is using is loaded onto machines as they request them. The same machines are then reconfigured to meet the needs of other customers. No data has to be transferred to GridWay.