On June 12th, 2012 PEER 1 Hosting launched their HPC Cloud offering. It’s an impressive system, here are some of its features:

- Signup and start using it in 15 minues
- Hourly Billing
- nVidia GPU’s (full speed)
- Robust physical servers
- Hybrid model supported
- 665 T-Flops

Now what strikes me most about this announcement isn’t so much the hardware configuration they’ve built it on, but the fact that a data center provider like PEER 1 is getting into the HPC market. What’s to keep them from going into low-cost web hosting or other cloud leveraged services? ZuniCore appears to be very nimble and capable of providing new services for niche markets.

ZuniCore was launched as PEER 1′s IaaS cloud brand. Now that ZuniCore is offering HPC, it is starting to emerge as a cloud contender in a way that only a data center provider could offer.

Unless you’re a data center provider, or own your own data center, your cloud offering will be rolled over by the likes of ZuniCore.

Here’s why: A good cloud provider can buy bandwidth cheap, but they’re buying it from the data center provider. A good cloud provider can get low-cost colocation space and affordable power pricing, but they’re buying it from a data center provider. Head to head the data center provider backed cloud product can beat a regular cloud offering on price.

The only hope for a non-data center backed cloud provider is to have a loyal user base willing to pay extra for the brand, quality of service, and the support they receive. Otherwise they’ll have to play with the over-subscription game in order to compete on price and hope they don’t get burned on spikes.

It will be interesting to see how things play out in the years ahead. But if I were a cloud web hosting business playing the low-cost game or even a niche cloud service provider, I’d be watching companies like PEER 1 very closely to see if they decide to spin up an ultra-cheap cloud hosting brand under ZuniCore or even as their own brand.