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
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.

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