The big cloud infrastructure service providers, such as Amazon Web Services and Microsoft, may now have some serious cloud competition: a united front of about 170 providers worldwide running on OnApp's new federated cloud.
The service lets cloud providers share compute resources (CPU, RAM and storage) through a central location. Providers atop can leverage a federated cloud spread out globally that has twice the number of locations out of the gate than Amazon and Microsoft clouds combined.
Service providers use OnApp as a platform to launch clouds, and the company is now leveraging its unique position to unite these clouds and win by strength in numbers it has amassed. Having been the basis of over 2,000 clouds worldwide, its federated cloud is providing a central place to buy and sell excess compute resources through a single API, a single SLA and a single bill.
The OnApp Federation is a network of 167 service providers offering capacity at 170 locations in 113 cities, across 43 countries. “The federated compute model offers access to infrastructure in hundreds of locations worldwide, and it’s all handled by a local service provider,” said Kosten Metreweli, chief operating officer at OnApp. “Say a customer wants to deploy an app in 10 countries, normally they’d have to find a service provider in each region. Now they can do it all through their current provider.”
Building on federated CDN success
The company started by offering a federated Content Delivery Network, which allowed service providers of any size to offer geographically diverse CDN to customers, regardless of their size. This offering competes directly with the large CDN providers like Akamai and has had a lot of success.
Extending that model to a different set of services, the new federated cloud offering lets any service provider in the ecosystem compete with the largest clouds without having to invest in that global infrastructure.
The new global compute capability is built on the OnApp market, a wholesale cloud marketplace for service providers. OnApp simplifies running a workload across multiple clouds and all the commercial relationships that the customer has to maintain.
“We’re all about helping service providers drive out the cost of doing cloud. It’s the power of shared economies,” said Metreweli. “Companies like Airbnb and so on are able to grow extremely rapidly because it helps people monetize existing assets. It’s similar to that. It’s a much more modern way to build, taking advantage of what’s there already."
OnApp created its own virtual service provider that sits on top of the market. “In order to do that, we’ve been working with a set of launch partners to run this virtual provider,” said Metreweli. “At launch, we’ll have two to three times the number of locations that AWS and Microsoft have combined.”
In the preview phase, 50 OnApp providers will provide compute capacity for the OnApp Federation, with nine locations available for testing in the US, UK, Ireland, the Netherlands, Russia and Belgium. The company expects this number to grow at least ten-fold in the next 12 months.
“In this first release we’re providing a spot market,” said Metreweli. “Going forward we’ll introduce new capabilities and financial products, like the ability to buy futures, etc. All of that is relatively easy to do.”
Cloud Brokerages vs. Cloud Federation
There have been several attempts to establish cloud brokerages by the likes of SpotCloud. These are third parties that attempt to create a marketplace where cloud compute is bought and sold. However, many of these attempts have not taken off. Cloud federation is a different model because in its case, the aggregator adds value beyond providing a centralized marketplace.
"One of the reasons that is much easier for us is we’re a service provider to the service provider market,” said Metreweli. “The problem is keeping supply and demand in step. It’s easy to generate supply, but not demand. We’ve solved that: all of our supply and demand is the same group of people, service providers. If you’re in the market, your selling and buying already. It’s a self-reinforcing thing.”
OnApp's federation gives service providers the flexibility to be as big and diverse or as local and niche as they want to be without investing in more infrastructure, Ditlev Bredahl, CEO of OnApp, said. "By connecting hundreds of OnApp cloud providers around the world, we're helping each one of them break through the scale barrier, using the OnApp Federation to host customer applications exactly where they are needed, on infrastructure with the right performance, price and service level. And they can do it on demand with no capex. This is what cloud is supposed to look like: true global coverage, pay-as-you-go and real diversity."