Online Gaming Companies Bet on Cloud Partners

A list of vertical markets associated with managed hosting and the cloud typically includes government, healthcare, and financial services. But here’s another sector worth adding: Online gaming. Rapidly growing user populations, unpredictable traffic spikes, and little tolerance for latency compel some game companies to seek outside help. A couple of recent announcements — from Rackspace Hosting and GigaSpaces Technologies — confirm the need for cloud expertise in the gaming world.

Let’s take a closer look at each development:

Jim Liddle, director of sales and operations for GigaSpaces in Northern Europe, said his company has traditionally focused on the financial services market, noting that companies in that space are “always pushing the limits.” He said online gaming companies show similar characteristics.

“Some of the challenges are very similar to what is faced in the financial services industry,” Liddle explained. “As soon as you make a product available on Facebook… you may end up dealing with huge spikes you didn’t anticipate when you designed the product.”

Liddle said some of the people who tapped GigaSpaces in financial services have moved on to online gaming and have pulled the company into that sector. GigaSpaces began broadening out from its financial services base about 18 months ago. The company’s vertical markets now include telecom, e-commerce, manufacturing and e-gaming.

Naturally, GigaSpaces isn’t the only firm to pursue gaming as a vertical. Terremark Worldwide, also a Talkin’ Cloud Stock Index member, lists interactive entertainment as one of its industry solutions areas — alongside enterprise, federal government, Web 2.0 and carriers. The company says it provides managed infrastructure solutions that target “casual gaming, massively multiplayer online games (MMOGs), virtual worlds and social networking sites.”

Those applications, according to Terremark, posses “unique requirements with  regard to computing density, quantity and diversity of network connectivity.”

Yet the gaming vertical isn’t strictly about throwing computing resources at  scalability problems. Don Goodwin, executive vice president, sales and marketing, at Latisys, said gaming companies present business challenges as well as technical ones. The hosting and managed services company cites gaming as an important market for its Orange County, Calif. data center facilities.

Goodwin said Latisys’ gaming customers are asking for advice, for example, on how to preserve their capital. Not everyone has had access to capital, he noted, so efficient use of those dollars is critical.

Boosting operational efficiency is key. Brent Eubanks, senior sales executive at Latisys, said one of the company’s customers was able to shrink physical footprint by 30 percent while nearly doubling capacity. He said Latisys works with gaming customers to get more concurrent users per box and nail down such measures as contribution margin per watt.

For service providers so inclined, the gaming market looks to be a sector where they can wield a range of offerings. Dedicated hosting, cloud computing and business consulting could prove a useful combination.

Follow Talkin’ Cloud via RSS, Facebook and Twitter. Sign up for Talkin’ Cloud’s Weekly Newsletter, Webcasts and Resource Center. Read our editorial disclosures here.