A big shift in cloud computing business is rather predictable. So it’s important to be ready to the upcoming changes of getting and consuming cloud resources by customers. If you are an active hosting provider, cloud service provider, telco, systems integrator or a consumer of IaaS or PaaS cloud services, then this article might help you to benefit from the transformation that is coming.
We talk about the future of cloud computing, however it’s important to also understand its origins. When mega clouds like Amazon, Azure, and Google entered cloud business the hosting providers were taking notice and somewhat intimidated. From one side, the situation became worse for hosters, but from the other side the end customers won, because mega clouds invested heavily in technology and made the cloud very useful for many businesses.
Hosters started to look for a way to protect their business, to keep their customers and to stay within the market. Companies like Jelastic, OnApp and others gave hosters the demanded solution by providing cloud platforms PaaS and IaaS as a turnkey software package with professional services. As result many hosts were able to compete with mega clouds in their countries by providing similar cloud services locally.
But what will happen in 3-5 years? Will the mega clouds kill off all smaller players? The answer is most likely NO. We will see a big shift to a new model of how end customers buy cloud resources. The upgraded cloud ecosystem of data centers and hosters around the world is the key factor for this transformation.
Which problems drive the transformation?
There are three main business problems:
- Current business model of mega clouds does not meet the requirements of many customers – cloud business is not only about software and automation. It’s also about the residence of a cloud service provider and the location of a data center, different regulation laws related to personal data, tax issues, latency and network issues, performance of hardware, quality of support, mentality and language, different kinds of certifications, security concerns and other factors including the expensive cost of cloud resources.
- There is one more problem from the end customers’ side - too many cloud service providers around the world. Which one should they choose? Which one of them meets current and further requirements? There is no easy choice. End customers need to do a deep analysis before they deploy a complex project with a specific cloud service provider. They need some historical metrics of uptime and performance, to filter service providers by location and the security assurances they provide, and of course to find the needed quality of services and support.
- Underselling issue. The utilization rate of existing resources by hosters is low, about 40% on average. At the same time, to compete with mega clouds and attract big customers, a hoster should have the ability to sell cloud resources to its customers in many different locations, as mega clouds do. It’s a must. From other side it’s pretty expensive to invest in hardware in advance to expand your cloud business to a different location.
Plus mega clouds spend an insane amount of money on marketing to buy media bandwidth, which a hoster cannot compete with for the same customer alone. Moreover it requires some specific knowledge that many hosters do not have, because the best that they can do is to maintain hardware.
Cloud Union <CU>
A Cloud Union of mega clouds, hosting cloud providers and private clouds can help to solve the problems described above. There are several solutions on the market that try to solve the problems such as Dell Cloud Marketplace , Cisco Powered Services, The Deutsche Börse Cloud Exchange (DBCE), Cloud.net and others. The ecosystem of cloud providers around the world is huge.
Let’s analyze Cloud.net from OnApp. It’s a good example of such kind of Cloud Union. If you have not heard about this cloud platform – in short it’s like OpenStack for hosters – it’s a turnkey production ready cloud platform (IaaS + CDN + SDS) designed for hosting business.
OnApp software is now deployed inside ~3,000 service providers worldwide. It means that the OnApp automation cloud platform is deployed in more locations and data centers than all mega clouds put together. So, it gives the biggest choice of data center locations for end customers on the cloud market.
Isn’t that cool? It’s like another cloud giant distributed across all continents. This is very powerful. But is it enough to create the next transformation?
Where is the money?
Big customers are moving more and more workloads to the cloud. Hybrid cloud solves many security concerns and is very attractive from the financial side. Containers technology brings workload mobility to the next level and now it’s much easier for enterprises to migrate applications across different clouds.
What does it mean for the cloud industry? It means a huge amount of money will be moved from private cloud to hybrid cloud and to public cloud in the near future.
Who can get this money?
There is a good chance that this money will be distributed across the hosting Cloud Union. Because cloud services are provided by hosters in a specific region are more cost effective compared to mega clouds. A wide choice of hosters and data center locations meet the choosy requirements of customers, and existing technologies enable hosters to provide sufficient cloud services.
Cloud Rate <CR>
The location of a datacenter and the quality of services (SLA, uptime, certificates, etc) are very often critically important for enterprises and for many smaller customers. A Cloud Union should provide the ability to filter the wide range of clouds by various parameters. Moreover, it should provide a rating system of clouds based on automated tests and end customers’ feedback. I believe it will increase the quality of services across the whole Cloud Union. It’s a very rare situation when I book a hotel with rating less than 8.0 at booking.com... and as a customer, I would not buy a cloud service with a cloud rating less than 8.0 as well for my production environment.
This is the last piece of the puzzle to enable cloud transformation. It should be easy to migrate applications from private cloud to public cloud, from one cloud service provider to another. Thanks to containers technology, it is much easier now compared to the past!
Ease of migration process enables customers to move to public/hybrid cloud much faster. It helps them to find the best cloud service provider for a specific workload in a specific region. And if a customer does not like the service quality of the current hoster, or if a customer needs to move workloads to another location, it’s easy and painless to do so. I know hosters do not like it, but it’s fair. Do you like inferior restaurants with poor service and disgusting food? Unsatisfactory hosters will lose customers inside the Cloud Union, and excellent hosters will get more customers automatically, without marketing expenses.
Benefits for Hosting Service Providers
Integration with a Cloud Union will increase utilization of data centers significantly. A hoster can resell the resources of another hoster or a mega cloud. End customers can easily buy resources in a new location from the same hoster. It improves the whole business model – it helps to solve the underselling problem and to increase ROI. Now hosters can provide cloud resources from many data centers around the world without expensive upfront investment into the hardware. And the second - end customers satisfaction will increase Cloud Rate that will bring even more customers.
Benefits for End Customers
It’s obvious that the power of choice together with the ease of migration is like a cloud heaven – more benefits from the cloud for less money – no lock-in to any cloud provider, an easy way to move from one cloud to another one, optimal workload distribution across multi-cloud providers and a balanced rate of performance/price/SLA.
It’s a fact that some mega clouds like Azure, IBM, Google and AWS have already started to build business relations with the hosting ecosystem. In other words, they are joining the Cloud Union. Today mega cloud vendors can sell their resources via many local hosting service providers. Now they have a chance to reach enterprise customers that are looking for hybrid cloud/multi-cloud, but will never go directly to big cloud players because of security concerns, tax issues, local regulation laws, etc.
About Jelastic Cloud Union
We have predicted this cloud transformation and started to work on the real seamless hybrid cloud solution for our partners over a year ago. Our primary illustration describes Jelastic hybrid cloud concept very well.
Private cloud customers are connected to many different cloud vendors. And it’s very easy to migrate workloads across the clouds – literally just with a click.
Hybrid cloud enables running workloads across a mix of environments including private data centers and many public clouds, which can be offered by different vendors running in multiple regions. This allows to split critical and non-critical IT services between private and public environments, offering the security of a private cloud and the low cost of a public one.
- Reduced costs and improved agility
- Highest levels of performance and security
- Flexibility to move dynamic or highly changeable workloads between clouds
- Faster network connections improve response time of services
- Security or governance compliance
Companies can also:
- Improve disaster recovery and high availability across multiple data centers
- Establish a regional presence in new markets without upfront investment
- Protect sensitive data on a private cloud, and move less critical data and apps to a lower-cost public cloud
- Temporary acquire additional IT capacity for spikes or variable loads
Cloud Union <CU> opens new business opportunities for hosters, systems integrators and enterprises. Systems integrators and enterprises get access to the huge ecosystem of data centers around the world via Cloud Union and have the ability to choose cloud providers based on the requirements and Cloud Rate. At the same time cloud providers can utilize infrastructure resources more efficiently resulting in increased ROI by attracting enterprise customers. The wave is coming. Watch it!