Marc Andreessen: A Pioneer Once More

He jumps into the Web outsourcing market

When Marc Andreessen burst on the scene six years ago, his arrival in Silicon Valley from Illinois heralded the the Internet Age. He was barely 22, a hamburger-chomping, moon-faced boy--but the Web browser he and colleagues built at Netscape Communications Corp. shook the world. Soon Netscape came and went, though, chewed up by archenemy Microsoft Corp. and acquired by America Online Inc. And Andreessen dropped out of sight.

Now the former wunderkind is back. He has grown up, too. The baby fat has burned off his cheeks. But Andreessen is still up to the same old tricks. With his new company, Loudcloud Inc., in Sunnyvale, Calif., he's helping to pioneer what many see as the next big thing in tech: delivering computing to companies as reliably and simply as they get electricity off the power grid.

Loudcloud assembles the plumbing that's needed to run a busy Web site--everything from server computers to database software. Then it sells the package as a service delivered over the Web to companies for a monthly fee. "Nobody in their right mind would call this sexy, but it's critically important," says Forrester Research Inc. analyst Ted Schadler. "They're like the people who built the the roads and the power grid and the banking system."

Andreessen learned from Netscape's mistakes. Instead of selling companies expensive packages and then racing off to the next deal, as Netscape did, Loudcloud gets rewarded when satisfied customers buy new services. And, since it guarantees its service will work 100% of the time, Loudcloud pays refunds if Web sites go dark. "If a customer does well, we succeed. If we have outages, we have immediate pain," says Andreessen.

For now, Loudcloud is targeting new dot-coms. It can assemble a startup's computing system from scratch and add computing capacity on the spot. That cuts down on expensive technicians. Monthly fees start at tens of thousands of dollars, which analysts say is cheaper than when customers handle things themselves. Loudcloud's first seven customers include DreamLot Inc., an auto auctioneer whose CEO, Michael Yang, credits the company with hastening his April launch by several months. "They're operating at light speed," he says.

Andreessen and his buddies had best be quick. They've got plenty of competition in their corner of an emerging Web-hosting market. Researcher Dataquest Inc. expects that market to be worth $22 billion by 2003, up from $2.7 billion today. Startups such as Pandesic LLC and USinternetworking Inc. provide similar services--though they don't promise the same 100% service guarantees. And major players like AT&T overlap with what Loudcloud does.

There's one gorilla that Loudcloud won't face, at least for now: Microsoft. It supplies the upstart with software. "We're a proud partner of Microsoft this time. Isn't that great?" quips Andreessen. It's certainly better than being the software giant's lunch.