May 28, 2012 | last updated June 5, 2012 9:51 am
Q&A

Cloud computing center comes to Wallingford

Jonathan Reeves

Q&A talks cloud computing with CEO Jonathan Reeves, CEO of NextCloud. The California-based company is using an investment from Connecticut Innovations to open operations in Wallingford.

Q: First of all, welcome to Connecticut. Please explain what NextCloud is. How long have you been in business?

A: NextCloud was founded in 2010, and is an innovative provider of enterprise-class cloud computing services. The company's solutions are designed to augment, or replace, the need for organizations to have their own computer server rooms and datacenters. The rate of technology change continues to accelerate, which can be very challenging for companies to keep pace and continue to innovate. For example, the widespread use of mobile devices has introduced a new set of issues and challenges to the IT staff at businesses of all sizes. Similarly, the amount of data to be stored is doubling every year and computing capacity and network requirements continue to expand at an unprecedented rate. NextCloud's approach is to provide an enterprise-class datacenter and IT infrastructure on a pay-as-you-go basis. Rather than having to own and operate a dedicated set of computer servers and information systems, it is possible to pay for these services on a monthly basis.

Q: You're here, in part, because of a $1 million investment by Connecticut Innovations, the state's quasi-public authority responsible for technology-based innovation and economic development. Aside from the funding, what attracted you here?

A: Many members of the NextCloud team have lived in Connecticut for many years and have a history of building successful businesses in the state. The Northeast is well known as one of the technology innovation centers of the country and indeed the world, so our reason for establishing our headquarters in CT is a combination of factors. There is also a robust network of fiber optic based service providers in this area. Our cloud services rely on high performance, low latency connections between our datacenters and the customer's business locations so availability of bandwidth is another aspect of our decision. Last but not least, we see a rich pool of talented individuals in the state which will be important as we scale and evolve our business.

Q: With this $1 million investment, you have raised $1.18 million out of a total offering of $1.6 million, according to an SEC filing. What does the funding shortfall mean in terms of your company's future growth?

A: We increased the size of the funding round to $1.6 million to allow for additional investment. We have had a great deal of interest from additional investors, and expect to secure additional equity financing as well as capital equipment financing in the coming months. The Connecticut Innovations investment has provided an excellent platform to attract new investors who are excited by the potential of the cloud computing opportunity and NextCloud's approach to delivering Enterprise-class cloud services.

Q: What does your expansion here mean in terms of job creation and economic investment? What economic impact will NextCloud have on Wallingford and Connecticut?

A: We see our expansion into Connecticut as being beneficial to local businesses, research establishments and municipalities. Rather than investing in building their own datacenters, organizations can share in the economies of scale associated with the cloud computing approach. We have already found a great deal of interest in our solution and expect this to accelerate as we expand the size of our footprint in the state. We expect to hire a number of people here as our business expands and also help create an ecosystem of specialist resellers who can build their own IT service offerings on top of our computing platforms. Wallingford has economical power distribution and rich fiber optic connectivity which make it a very suitable location for a cloud computing center.

Q: One of the things your company does is offer regional managed hosting services to enterprise, smart building, healthcare, government and education customers. Why does a cloud-based business require regionally managed hosting?

A: We refer to our solution as "a cloud you can drive to," where IT professionals from our customers can visit our locations and meet with our team of experts. We find that companies are unwilling to consider traditional cloud-based solutions for their production workloads, instead only using cloud computing for a small subset of their overall computing needs. Our approach has been designed to resolve this problem. We believe the regional approach to cloud computing is the best approach. Companies need to know where their data is located and meet with a trusted team of professionals who can advise and assist with their specific cloud hosting requirements.

Q: Connecticut has been described by some as a difficult place to do business because of high energy costs, taxes and fees, and an insufficiently trained workforce. How is NextCloud going to overcome that?

A. We believe there is a growing technology centric workforce in the state, and an increasing focus on technology and engineering in the region's universities. We intend to help provide a catalyst for developing activity in the area through the development of an IT-centric community. While we would all prefer lower taxes and lower energy costs, we do not see these as impediments to growing our business in the state.

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