Amid Belt-Tightening, Engine Yard Expands The Cloud

In the past few weeks, Engine Yard has brought in a new CEO, laid off 15% of its workforce, and merged two of its key development efforts. With that out of the way, the Ruby on Rails hosting company appears ready to announce a cloud platform and a new hosting option.The story has played out on Engine Yard's blog. On Jan. 5, CEO Lance Walley revealed that Engine Yard laid off 15% of its workforce (12 people let go) at the start of the new year. Three days later, amid customer confusion, Walley provided a more detailed account of the company's organizational changes, including that he was stepping down and that John Dillon, the former CEO of Salesforce.com and Hyperion Solutions, had been hired to take his place. Dillon's appointment hasn't been formally announced, but it's out there.

In late December, Engine Yard informed users in a series of blog posts that it was merging its Merb development team with its Rails team. Merb is, or was, a fast, flexible Web framework, written in Ruby. Ironically, Merb 1.0 was released on Nov. 7, a mere six weeks earlier. The Merb code will be merged into Rails 3, the next version of Rails. An early version of Rails 3 is due in the spring.

On Jan. 14, Engine Yard will make two announcements. The company is offering details under embargo, which I declined, but Walley give a few tips about may be coming in the above blog post. He writes that Engine Yard plans to bring out new services based on Amazon Web Services and to release its Vertebra software as open source. Vertebra is a framework for "orchestrating complex processes" on a company's own IT infrastructure or in "the cloud" on Amazon's EC2 or VMware's Vcloud.

It's worth noting that Amazon, along with New Enterprise Associates, invested $15 million in Engine Yard in mid '08. With that in mind, it's not surprising that Engine Yard would be looking to host Rails apps on AWS, if that's what it's doing. However, I would also point out that, unlike some other application hosting companies, Engine Yard actually operates its own data centers, two in the United States and a third planned in London. As Engine Yard looks for ways to manage costs, it will be interesting to see if cutting back on data center expense is one of them.

In this video interview from a few months ago with my colleague Roger Smith, Walley gave a hint of what was to come when he talked of letting customers deploy Rails applications across clouds.