Competing Against Amazon's Cloud

As more telecommunications carriers launch rivals to Amazon.com’s popular computing-services business, a Silicon Valley start-up is aiming to help them beat the Web giant’s prices by tackling one layer of the computing “stack”—data-storage software.

The software sold by Nexenta Systems of Mountain View, Calif., builds on a trend the industry calls “virtualization,” a broad term for pooling computing resources across physical hardware to make the gear more efficient. Virtualization is a key technology for companies that sell computing services over the Internet to business customers, a growing market known as “cloud computing.”

Nexenta’s software virtualizes data-storage systems but with a twist: the software can run on basic server systems from any hardware vendor. That makes the start-up a competitor to both storage behemoths such as EMC, which sells hardware-software systems, and providers of on-demand computing resources such as Amazon, Nexenta executives said. Amazon, the 800-pound gorilla in cloud computing, uses storage software it built in house to maximize the capacity of its gear, they said.

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