Federated Cloud: A New Frontier

With the rapid growth of cloud computing, service offerings have become quite diverse. Cloud consumers are then faced with negotiating differing services and service levels from every cloud provider.

For those service providers that can provide comprehensive, global and easily managed offerings to their customers, huge revenue potential exists. According to IDC, by 2016, more than 50 percent of enterprises will have more than half of their IT assets located in third party datacenters. With these numbers rising, it is evident that this trend will conly continue to gain steam.

Get ‘The Cloud’ From a Single Provider but with Global Availability

Many companies are determining how they will utilize cloud computing and, from a provider standpoint, what offerings they will provide. The expansion of XaaS (Anything-as-a-Service) will develop into a global cloud network that will provide users true anywhere, anytime access to their apps, resources and desktops with low latency and high-availability.

The problem is that no single provider can offer this type of cloud access, even market giants like Amazon or Rackspace. They still have limited geographic presence with infrastructure only where it’s profitable for them to invest. It’s easy to see that outside of major cities and even countries, coverage from cloud providers is very weak or even non-existent. 

In addition to the big market players, there are telcos, ISPs, and data centers almost everywhere with their own infrastructure. What’s even more appealing is that these companies have a working business model in place specifically for their local market, and in many cases they have capacity to spare.

If we could only pull all of these spare capacities together into a massive resource pool and provide them to anyone who needs it. Welcome to the new frontier of federated cloud. 

Who Does Federated Cloud Benefit?

The short answer to this is that federated cloud can benefit both providers and end users.

Federated cloud is a cloud service model that connects all of these local infrastructure providers to each other, creating a global marketplace that enables each provider to buy and sell capacity on demand. As a provider, you now have instant access to global infrastructure that was previously unattainable. If you have a customer that suddenly needs resources that you do not have available in your infrastructure, just buy the capacity needed from the marketplace. If another customer lives in New York but needs to accelerate their website or application in Hong Kong, you can simply purchase available resources from a federated cloud provider and use the infrastructure that is already there.

Even smaller service providers can offer a global network with federated cloud without spending anything to build new infrastructure. Federated cloud can provide data centers that have spare capacity a simple and immediate way to monetize that capacity by submitting it to the marketplace for other providers to purchase and utilize.

Federated cloud ultimately benefits end users the most. Currently, end users have only a handful of “global” cloud providers to choose from and they must adhere to the pricing and support those companies impose. However, federated cloud can now offer those same end users the ability to pick from a whole new range of providers. They can choose to work with a local provider who is part of a federated cloud network and with whom they already have an established relationship and in which the pricing, support and expertise fit their budget. Although they are going with a local provider, they still have instant access to as much global resources as they need in addition to the local resources they utilize. One other benefit to end users it that there is no longer a need to manage multiple providers and. They can now have a true single provider.

Federated Cloud is Coming

An article from CloudSwitch said that 2010 was the year of the federated cloud, but we have yet to see wide adoption of this solution. In the coming year, I believe service providers will finally be able to monetize their underutilized resources and add new revenue streams to their business. End users will be able to utilize local providers that they are comfortable with and reduce the number of relationships they are trying to mange while still being able to access a global network of resources.

Federated cloud will allow data centers and local service providers to finally be able to compete with today’s “global” cloud providers. The promise of cloud will finally be available to everyone.

Image source: Jesse Peters