The Stratus hybrid cloud option allows customers to cross-connect their existing back-end resources such as databases and other supporting applications to the Stratus Trusted Cloud, where they can host front-end computing power and other resources like network, firewall, load balancing and web servers. Customers can also cross connect Stratus cloud computing resources directly into their environment to handle overflow situations such as seasonal spikes that require excess compute capacity.

Multiple companies have already begun taking advantage of the hybrid cloud, including BrandPort, Belk, Rollover Systems, VMware, Knowledge Point 360, Cleveland Cavaliers, Baylor School and NRCCUA. Companies can use the hybrid version of the Stratus Trusted Cloud to take advantage of rapid and elastic deployment and usage, with the ability to add or subtract resources depending on changing requirements.

“We’ve seen tremendous interest in the hybrid approach,”” said Christopher “Kip” Turco, Hosted Solutions’ Chief Operating Officer. “Many customers want to take advantage of the benefits of cloud, but they are not ready to move their entire environment to the cloud. The Stratus hybrid option enables them to do just that – leveraging the benefits of cloud without reconfiguring their entire environment.”

Hosted Solutions, which provides data center and managed hosting services, is expanding its 10,000 square foot facility by an additional 5,000 square feet to make room for future growth, and is also upgrading the facility’s power capacity.

“After working with Lee Technologies on the strategic build out of our Raleigh facility, we were fully confident their team was ideally suited to manage, execute and deliver the expansion and re-design of Hosted Solutions’ Charlotte Metro facility on time and on budget,” said Rich Lee, Founder and CEO, Hosted Solutions. “Our customers demand data centers engineered for maximum security and 100% uptime, and Lee Technologies enables us to deliver uninterrupted services and availability.”

“Lee Technologies is once again pleased to partner with Hosted Solutions, and looks forward to working together on additional projects in the future,” said John C. Lee, IV, Chairman and CEO, Lee Technologies.

Founded in 1983, Lee Technologies has commissioned critical power equipment for more than 5 million square feet of mission-critical space and currently maintains critical equipment that supports over 3 million square feet throughout the U.S. The company is headquartered in the Washington, DC metroplex and has offices in Atlanta, Houston, Los Angeles, San Francisco, Seattle and Dublin, Ireland.

“By moving deeper into the stack and providing a greater range of services, such as applications hosting and support, we deliver greater value to our clients,” said Christopher “Kip” Turco, Hosted Solutions’ Chief Operating Officer. “They, in turn, are far more likely to regard us as their trusted partner, ready to help them solve a full scale of business challenges. We’ve seen a significant level of interest in this offering from our customers.”

One of the early adopters of Hosted Solutions’ new offerings is Motricity, which provides data solutions to mobile operators and content providers. Those services include functions in key areas needed to ensure consistent uptime, featuring more than 100 terabytes (TB) of backup and storage, Oracle RAC administration, dedicated account management and security to meet PCI compliance standards.

“There has been a notable trend in hosting providers looking up the stack and trying to determine how to evolve their hosted solutions in concert with the increasing demands of the new breed of SaaS and complex customers,” said Antonio Piraino, Research Director -Hosting & Cloud Computing, Tier1 Research. 

“Those service providers that are able to provide service levels around these core applications are quickly gaining a greater level of trust by their customers,” he added. “This represents a huge opportunity as the comfort level grows as users understand the reliability and range of services that can be deployed with greater speed, efficiency and at a lower price point than doing it themselves; allowing these firms to devote more of their attention to their core competencies.”

Hosted Solutions, based in Raleigh, North Carolina, was acquired last year by private equity firm, ABRY Partners for $140 million dollars.

Hosted Solutions started life as a local provider focused on the Research Triangle area of North Carolina, with headquarters in Cary and a data center in Raleigh. The company expanded into Boston in 2006, and was acquired by ABRY Partners last year. The new ownership has helped Hosted Solutions expand or upgrade its five data centers, setting the stage for today’s announcement of a cloud computing service.

“We believe this is a product that helps us expand beyond the typical data center managed hosting offering,” said Kip Turco, the Chief Operating Officer for Hosted Solutions, who said he expected the Stratus Trusted Cloud to expand the company’s customer footprint. “This makes it much easier for us to sell at a national level.”

The Stratus Trusted Cloud features a “massively scalable, multi-tenant infrastructure … with built-in high availability and automated resource balancing,” the company says. The platform will be supported by Cisco’s new Nexus switches as well as hardware and software from VMware, Sun, EMC, F5 and Juniper.

99.99 Percent Uptime SLA
“This environment is very robust,” said Turco. “For our cloud, the differentiator is a four nines (99.99 percent) SLA. This is not a developer cloud. We are an infrastructure as a service provider and are used to dealing with production systems. That’s what we do well.”

The Stratus Trusted Cloud will allow customers to scale their resources up and down and bill customers based on resource usage. The platform will run in Hosted Solutions’ Raleigh data center, with additional sites to be added later. But it won’t be fully “self-serve,” with instant management through a web portal, as seen in many new cloud services.

“We actually go through a process where we require customers to interact with our staff,” said Turco, who said the company chose this approach to address enterprise customers’ concerns about staffers making mistakes with online management tools.

The first customer using the Stratus Cloud is Digitalsmiths, which helps content companies monetize video. “Working with major Hollywood studios, media companies and advertisers requires us to work with large amounts of video data,” said Matt Berry, Chief Technology Officer and co-founder of DigitalSmiths. “As part of our work, we need to be able to rapidly scale up our access to more storage space and processing capability. Trying to do all this in house can take time, money and detract us from focusing on our core capability. By introducing the Stratus Trusted Cloud, Hosted Solutions will enable us to simply and automatically get the resources we need in less time and at a fraction of the cost.”

Specialized Clouds for Vertical Markets
Turco said he expects cloud computing will soon focus on developing specialized clouds for vertical markets. “A production-level cloud will need to be based around compliance requirements, such as a PCI-compliant cloud, or a pharma or biotech cloud that would be HIPAA compliant,” he said. “I don’t think a lot of enterprises are going to jump into the cloud until there’s been a switch from the developer cloud to a production cloud.”

Turco compares the development of cloud computing to the evolution of virtualiztion, which got its foothold in the enterprise in test environments and was later adopted in production. Hosted Solutions is leveraging its experience hosting production environments for customers such as the Atlanta Falcons, Channel Advisor, Lowe’s Motor Speedway, Sony Ericsson, Motricity and and more.

More Growth Ahead
“For nearly a decade, we have built our business around delivering best-in-class service at every level for our customers,” said Rich Lee, Hosted Solutions’ founder and Chief Executive Officer. “The Stratus Trusted Cloud continues that tradition. It is a cloud platform that provides the benefits of strategic IT infrastructure support – enabling our SME customers to run their production environments, even as they realize the cost, time and efficiency advantages that are increasingly associated with cloud computing.”

While the Stratus Trusted Cloud may allow Hosted Solutions to expand its virtual geography, it’s thinking about physical expansion as well. “The company is really positioned well to expand and grow,” said Turco. “We’ve been very methodical when it comes to expanding. We’ve been actively looking at companies and markets to look to expand the company beyond its current three markets.”

“We have seen tremendous momentum with our customer growth throughout New England,” said Mike Lee, Regional Manager for Hosted Solutions. “Given current market conditions, companies today require a trusted partner who can provide them with services across all areas of IT, rather than simply providing data center space or point solutions. Increasingly, companies recognize both the immediate and ongoing value of having a trusted partner provide them with the full range of outsourced technology services.

Lee said Hosted Solutions’ expansion in New England is part of the strategic direction the company has embarked upon, as part of its acquisition last year by ABRY Partners. The company also has four other high-capacity data centers in North Carolina, serving markets up and down the East Coast. ABRY Partner also owns Houston-based colocation provider CyrusOne, and has invested in significant data center expansions and upgrades at both providers.

This is the second series of upgrades to the company’s Boston operations. Hosted Solutions invested $1 million in upgrades after its acquisition of Boston Datacenters in 2006. Upgrades include a redesign of the interior layout to promote better cooling, an improved data backup system, and additional UPS power support.

“TTS has truly developed an industry changing solution that enables large enterprises with multi state operations to easily digitize and store tax related certificates that have been fully vetted by qualified tax professionals without investing in software, hardware or IT support,” said Brian Baker, Vice President of Sales with Hosted Solutions.

“It is critical for CertCapture to be available, scalable, and perform at a high level and with the latest security protections built in.” said Silvia Aguirre, TTS President and co-founder. “With Hosted Solutions, we’ve found a partner who maximizes our IT infrastructure so we can focus on our core competency of helping organizations comply with State Tax Regulations.”

Hosted Solutions, based in Raleigh, North Carolina, was acquired last month by private equity firm, ABRY Partners for $140 million dollars.

For additional background and details, see our story about ABRY’s acquisition of Hosted Solutions, as well as the recent expansion of ABRY portfolio company CyrusOne, which has added a Dallas data center.

“This is an incredible milestone for our business,” said Rich Lee, founder and CEO of Hosted Solutions. “Partnering with ABRY Partners provides us with the capital to fulfill our vision and accelerates our strategic growth plans.”

ABRY has completed more than $21 billion in transactions, and has invested in expansion at CyrusOne, which has added space to its Houston facility and just announced a new Dallas data center.

“Hosted Solutions operates an incredibly strong business,” says C.J. Brucato, Partner of ABRY Partners. “They’ve built a leading company in a market with great growth prospects. What impressed us most about Hosted Solutions is the quality of operations, the focus on customers and the controlled manner in which they’ve grown. They’re a profitable business generating strong revenue today and we see tremendous potential for the business to continue to grow and expand.”

ABRY is clearly focused on opportunities for data centers in second-tier regional markets. Many regional players have proven expertise in building a data center business in local markets, but lack the financial muscle needed to expand in the capital-intensive data center market.

“Over the last seven years, we’ve built a business that we’re incredibly proud of, growing in a controlled, strategic way to become a profitable company with five state-of-the-art data centers and a reputation for providing world class service,” said Lee. “Our employees and customers will see great benefit from this transaction as ABRY is a long-term partner that shares in our commitment to continue to grow the business and set the standard in the industry for service and innovation.”

Hosted Solutions was founded as Springboard Managed Hosting, and initially focused on the Research Triangle market with two facilities apiece in Charlotte and Raleigh. In 2006 the company acquired Boston Datacenters to enter the New England market. Hosted Solutions was represented by DH Capital, LLC, an investment bank specializing in the data center and managed hosting industries.

“The opening of Charlotte’s second data center is a testament of Hosted Solutions commitment to grow strategically in our current markets while giving our customers the personal relationship of a small company and the resources of an enterprise organization,” said Rich Lee, founder and CEO of Hosted Solutions.

The additional space in Charlotte was acquired to meet the growing demand for premium hosting facilities, and provide Hosted Solutions’ existing customers with future scalability to grow their business. The new Charlotte data center will be a carrier-neutral facility, with connectivity from multiple providers.

Hosted Solutions, originally known as Springboard Managed Hosting, operates five data centers, including two in Charlotte and one each in Boston Mass. and Raleigh and Cary in North Carolina.

GNi Inc., formerly Global Netoptex, was ranked 349th overall on the prestigious annual list, with a three-year revenue growth rate of more than 792 percent. GNi reported 2003 revenue of $903,715 and 2006 revenue of $8.1 million. The company has 56 employees. Founded in 2002, GNi has 14 service locations across the United States, Europe and Asia.

“GNi continues to record outstanding customer growth and soaring revenues,” said Derek Wise, GNi president and CEO. “Today, with more than 400 customers, 100 percent annual revenue growth and operations in key markets worldwide, we are keeping our promise to execute on our global expansion plans designed to allow our clients access to high-quality solutions.”

Hosted Solutions, ranked number 1,274 on the list, which now tracks the 5,000 fastest-growing companies on multi-year growth rates, compared to 500 in past years. Raleigh, N.C.-based Hosted Solutions reported revenue of $3.8 million in 2003 and $14.7 million in 2006 for a growth rate of 281 percent. The company has 71 employees.

“Hosted Solutions employees have made a collaborative effort over the past year to fuel the company’s tremendous growth with dedication and focus,” said Rich Lee, Founder and CEO of Hosted Solutions. “I firmly believe that great accomplishments stem from great effort, and making the Inc. 5000 is testimony to the collective contribution of all our employees who have worked vigorously to deliver superior customer service and technical expertise for the solutions we provide our clients.”

“The Inc. 5,000 provides the most comprehensive look ever at the most important part of the economy