RealTime IT News

LoudCloud Sets Up Shop

Internet guru Marc Andreessen created a buzz last September when he abruptly quit his post as America Online Inc.'s (AOL) chief technology officer, calling his former playground a "walled city" in terms of its technological growth potential.

He ignited an even bigger spark when he announced the following month that he was forming a company called Loudcloud Inc., leaving the particulars about the new firm shrouded in secrecy. This month, Andreessen and an all-star team burst on to the scene with a bang, announcing a number of deals with players such as Hewlett-Packard Co. and Oracle Corp.

Loudcloud was formed to unburden e-commerce firms of running Net infrastructures so they can go handle their core strengths in the business-to-business and business-to-consumer sectors. And people are listening: the start-up tapped $68 million in financing this February from Benchmark Capital and Morgan Stanley Dean Witter.

The new company markets "pay-as-you-go" Web-based business services, with varying price structures based on the needs of each client. Dubbed Smart Cloud, the service suite offers hardware, software and hosting capabilities. Essentially, a company needs only to develop a Web site and stand back. When contracted, Loudcloud rolls sites out rapidly.

Andreessen believes as the industry grows, building and running sites is becoming increasingly difficult.

"Loudcloud is applying world-class software and operations expertise to solve this problem," he said in a statement.

Loudcloud receives payment in the form of a monthly recurring charge, which is based on a client's site traffic. The firm has already signed on a batch of clients this month, with more to follow. Loudcloud's beta customers are HomeGain.com, Wish.com, Acteva, DreamLot, SkillsVillage, CFOWeb and Catapulse.

Andreessen co-founded Loudcloud with former AOL colleagues Tim Howes and In Sik Rhee, who helmed e-commerce projects at the ISP. Former Netscape Vice President Ben Horowitz is chief executive officer while Andreessen has taken the role of chairman.

The $68 million investment from the investment firms will help Loudcloud finance its product deals with H-P (HP) and Oracle (ORCL). H-P will provide Intel-based and Linux servers. Oracle will lend its database technology.