Atlantic.Net launches cloud in Canada

“There is very little understanding that Toronto is the fifth largest North American metro area and the second or third largest international banking transaction center in North America; that Canada ranks fifth in the world for low risk data center siting, following only the US, UK, Sweden and Germany, and that the largest concentration of data centers in Canada is, by far and away, in the GTA,” noted Bruce Taylor, long term executive with the Uptime Institute and now principal at Taylor Strategics on a recent stop in Toronto. Awareness of GTA suitability for data centre services is changing, however, in response to these local conditions and demand, and as part of the evolution of data centre services more generally. As Taylor explained, growth in the “wholo” (wholesale and retail co-location) market in North America is tearing along at 15%+ CAGR”. On the Canadian front, market estimates are roughly equivalent: 451 Research has calculated a CAGR of 16 percent for 2010-2014 for the Canadian multi-tenant data centre market, with the GTA providing 50 percent of colocation capacity, and ongoing high utilization rates (in the range of 91-94 percent) as new supply is brought onboard over this period.[1] But perhaps the best evidence of vitality is the influx of new data centres, of both retail and wholesale varieties, into the GTA over the last few years, aimed at capturing new opportunity that increasingly is being driven by cloud delivery of IT services.

Marty Puranik, founder and CEO,
Marty Puranik, founder and CEO,

The latest entrant to the GTA market is Atlantic.Net, a Gainesville, Florida-based SSD cloud and VPS hosting provider that launched a global expansion program this summer with the establishment of two new data centres in Dallas and Toronto to complement an existing facility in Orlando. Testament to the growing importance of cloud can be found in Atlantic.Net’s Toronto focus: a supplier of colocation, hosting and cloud services back in Orlando, the company will primarily deliver virtual servers and cloud services out of the Toronto centre. “In some cases,” explained founder and CEO, Marty Puranik, “we will have customers that need a hybrid solution, or have a legacy workload that they cannot migrate 100 percent for licensing or technology reasons, and we will offer them the ability to locate their equipment near the cloud servers so that they can use them in tandem. But our primary focus is cloud and virtual servers.” Atlantic.Net’s move to Toronto, Puranik described as “based on cloud services demand,” though this location also offered a proximate international market, which is “part of the commonwealth,” a fact that plays to European clients that currently account for approximately 30 percent of the company’s customer base, and, Puranik claimed, have rules and regulations that are similar to Canada’s. According to Puranik, “the [GTA] market is growing and it’s underserved. And there’s nothing there like what we are bringing to the market, in terms of all the parts you need to get a virtual server at a great price.”

The Atlantic.Net value proposition rests on this feature — the fact that pricing is all inclusive: “we differentiate by not nickel and diming the customer. Our pricing includes the bandwidth, the GIF, the I/O, and licensing fees (in the case of Windows). Our servers are up in thirty seconds, and billed on a per second basis to provide a lot of granularity in terms of control, Puranik added. In his view, “this is where everything is going — having elastic capacity that can scale up and down,” based on resource scale that is not practical for many established ‘cloud’ providers and he contrasted this approach with that of existing players that are more focused on managed hosting offerings aimed at helping enterprises consolidate workloads. Unlike many of the pure play providers — in colo or managed services, for example, — which Puranik argued have moved into cloud in an effort to protect the revenue base of existing customers who are shifting to cloud, Atlantic.Net does not have any legacy hardware and systems to leverage. “We don’t have any of that baggage,” he claimed. “We’re like the 2.0 version of web services where we can optimize for what customers really need, rather than try to preserve the revenues we already have.” rack
Atlantic.Net servers

A key foundational element in Atlantic.Net’s differentiated offering is infrastructure, including SSD technology, which contains no moving parts, is more resistant to physical shock, has lower access time, less latency and typically features low power flash memory. The company has also used Mellanox’s InfiniBand switching and 40 Gigabit fabric for four years now, products aimed at the high performance computing sector, which deliver much faster networking speed. According to Puranik, the company’s ‘secret sauce’ is “using all the new technology and integrating it in a way that makes sense”: Atlantic.Net has developed its own proprietary cloud platform that is “highly, highly optimized for what we are doing and for the environment that we are running it in. It’s a lot more efficient, it’s a lot faster and the code base is actually simpler [than OpenStack, for example], so we are able to iterate and put features in faster.” For compute, the company relies on mixture of Dell and Supermicro servers and Intel CPUs, and the data centre has been designed modularly to enable rapid scale. The Toronto centre resides within a carrier-neutral, green facility that was purpose built for businesses like Altantic.Net, operated by Cogeco, which has also been contracted for logistics and equipment deployment services.

Atlantic.Net’s positioning smacks of the maverick. Commenting on the data centre market in Canada, 451 Research noted, “The vast majority of providers in Canada offer both colocation and managed services with few pure-play providers of either offering in the market. We see in the top four Canadian MTDC markets that companies tend to bundle manage services with colocation in order to attract business and/or raise pricing…. We expect the Toronto market to continue to mature as many providers reveal incremental capacity additions. There is a rising interest in hybrid offerings and we expect providers to focus on bundling colocation with managed services.”[2]

Will the Atlantic.Net focus on new technology and pricing help the company to swim against the grain? In Canada, Atlantic.Net’s target market is the ISV developer community, marketing agencies and other hosting companies, and Puranik added that a lot of the company’s business is driven by business analytics and other new software that is moving to web delivery — in other words, constituencies and solutions that are also served by the Amazon juggernaut. But Puranik does not acknowledge competition from this other end of the established cloud provider spectrum, as Amazon pricing contains a number of moving parts — for outbound bandwidth, for example — with the result that “customers don’t really know what they are paying for.” The Atlantic.Net proposition, on the other hand, is a “fixed rate that includes many of the features that customers will need, predictable billing and aggressive pricing.”

The company is also served by its existing customer base. While Atlantic.Net currently has customers across Europe and North America, as well as ongoing expansion plans to locate facilities in Europe and Asia, Toronto client data will remain in the Toronto centre, a requirement that Canadian customers are articulating with increasing stridency. The decision to locate in Toronto was driven, in part at least, by Canadian data residency anxiety. According to Puranik, Canada has been an important market for the company (part of the 30 percent ROW base) and the company expects a significant number of existing Canadian customers who had provisioned in Atlantic.Net facilities will migrate to the new Toronto cloud node.

Let the games begin.


[1] 451 Research. Canadian MTDC Market Assessment: Supply and Providers. December, 2012.

[2] Ibid.


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