Editor's note: In part two of this three-part tip series on the evolution of cloud federation, network services expert Rebecca Wetzel discusses how OnApp is combining
Few cloud providers want to go head-to-head with Amazon. But when it came to cloud CDN services, executives at cloud software vendor OnApp believe they had one advantage over the online behemoth: OnApp's installed base of more than 400 service providers.
"We realized that we could leverage spare capacity -- some 20% of the infrastructure sitting there as an idle resource -- and help cloud providers monetize that resource," said Kosten Metreweli, chief marketing officer at OnApp. "We looked at how we could federate that resource to run services on [it], and the first of those was CDN. It was a natural fit, given the requirement to be in as many geographies as possible."
OnApp launched its cloud CDN service, branded OnApp CDN Federation, in August 2011 to compete directly against Amazon's CloudFront CDN offering. OnApp federates participating cloud providers running its CDN platform. It centrally operates and manages the service, serving as an intermediary and broker to track usage and manage financial settlements between resource buyers and sellers.
Read the rest of this expert tip series
Three paths to the federated cloud: Which is right for you?
Tier 3: Cloud federation enables providers to expand service footprint
"We built out a federation model to create a CDN application that could take advantage of spare capacity and create a marketplace that would allow [cloud] service providers to contribute their infrastructure and set their own price," Metreweli said.
The cloud CDN service works by having providers deposit money into an OnApp CDN account, which is used to purchase bandwidth from other participating providers. Any revenue a provider earns from the sale of that bandwidth is also stored in the account. OnApp pays providers that end the month with a positive balance above the initial deposit, though it also pockets a broker fee.
Cloud providers should note, however, that Amazon is far from the only competitor in the CDN world. Network operators are building CDNs, and for many years CDN providers like Akamai have dominated the market.
OnApp is betting that its cloud CDN services will bring ubiquity, scalability, reach and more advanced-service offerings to cloud providers. The hope is that the number of participating providers will reach sufficient critical mass to enable small to medium-sized cloud providers to compete successfully against Amazon.
If OnApp's cloud CDN services can achieve this, the company believes it can be the eBay of the cloud service provider world. Metreweli acknowledged that there is much work and education needed for that outcome. Luck will also play a role.
Next: Check out part three of this series, Tier 3: Cloud federation enables providers to expand service footprint, or jump back to the table of contents, Three paths to the federated cloud: Which is right for you?
This was first published in July 2012