The Next Breakthrough Cloud Service

The last decade of enterprise-scale computing has been incredibly transformative as “the cloud” has grown and changed in what it can do.

For companies to get software and services critical to their business, it used to require large investments of time, money, and labor to build and deploy the necessary data infrastructure.

Today, much of the software, platforms, and infrastructure can be done with cloud service providers and a significantly lower material cost.

The cloud has also become a breeding ground for incredibly successful new companies.

Software as a service (SaaS) lets companies “subscribe” to a piece of software instead of buying licenses for individual installations. This includes customer relationship management (CRM) software — the specialty of Salesforce (NYSE: CRM) — and enterprise resource planning software from the likes of Oracle (NYSE: ORCL), SAP (NYSE: SAP), and Microsoft (NASDAQ: MSFT), as well as email services, accounting software, data storage, and other applications.

Infrastructure as a service (IaaS) gives businesses flexible access to virtual computing infrastructure like memory and processing power, servers, and network hardware. Amazon (NASDAQ: AMZN) changed the game for IaaS with the Amazon Elastic Compute Cloud (EC2).

Finally, there’s platform as a service (PaaS), which is what we’re looking at today. The most famous examples of a platform as a service are Windows Azure and Google App Engine, which allow companies to streamline the development, operation, and maintenance of web-based applications.

This week, a company called Rescale announced it had received a $6.4 million investment from a star-studded list of investors including Amazon founder Jeff Bezos, Virgin Group founder Richard Branson, Y Combinator founder Sam Altman, “super angel” Ron Conway, and dozens more.

The list of investors is so impressive that it is an instant testament to what Rescale does.

What does it do? It turns supercomputing over to the cloud. It handles the incredibly demanding simulations and high-powered computing action required for science-heavy industries such as aerospace and biological engineering.

Its tiered offering is not unlike many other cloud services, and this means it opens up the world of supercomputing to small- and medium-sized businesses.

Typically, supercomputers are priced far, far outside the range of smaller businesses. Even a low-end Cray supercomputer costs half a million dollars. Research-scale supercomputer arrays have been known to cost as much as a billion dollars. Yes, that’s billion with a “B.”

By empowering businesses with a new level of computing power, Rescale is opening up a whole new market. It has been in operation for approximately four years, but the latest round of funding shows that many of the biggest investors in the tech space see a clear value here.

In the coming weeks, I will be publishing some new research that tracks all the investments of the top 25 Silicon Valley investors and identifies the areas of the most investment and greatest return.

While “supercomputer as a service” is not named specifically in the research, this should definitely be added to the list.

Good Investing,

Tim Conneally

 @TimConneally on Twitter

For the last seven years, Tim Conneally has covered the world of mobile and wireless technology, enterprise software, network hardware, and next generation consumer technology. Tim has previously written for long-running software news outlet Betanews and for financial media powerhouse Forbes.