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Tier 3: Cloud federation enables providers to expand service footprint

Editor's note: In the last installment of this three-part tip series on the evolution of cloud federation, network services expert Rebecca Wetzel explains how

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Tier 3, an Infrastructure as a Service (IaaS) provider and cloud-software vendor, is using cloud federation to enable partner providers to expand their service footprints without buying or leasing new data center space

In the first and second parts of this series, we discussed how cloud federation can be the means to other ends, such as building a cloud marketplace or developing content delivery network (CDN) services. But Tier 3 shows that cloud federation -- the act of interconnecting out-of-network clouds -- can be an end in itself.

Tier 3 began offering a service called Federated Cloud in February 2012, licensing out its proprietary cloud-software stack to managed service providers (MSPs) and smaller cloud providers. To join the federation, a service provider hands over cloud service deployment and management to Tier 3. The participating provider licenses Tier 3's IaaS platform, which runs on provider-owned, Tier 3-managed hardware. The result is what Tier 3 calls a "node." From there, Tier 3 configures the node to federate with nodes that Tier 3 or other participating cloud providers run.

Read the rest of this expert tip series

Three paths to the federated cloud: Which is right for you?

SpotCloud: Federation unites cloud services broker's marketplace

OnApp: With federated cloud, CDN services possible for providers

The first partner to join Tier 3's federated cloud was CFN Services, an MSP based in Herndon, Va., that markets its low-latency network services to the financial services industry and network operators. Through the cloud-federation partnership, CFN sells cloud services from its own node -- colocated in an Equinix data center -- in addition to white labeling cloud services that draw from Tier 3's nodes. CFN shares revenue with Tier 3 for the use of its nodes, and vice versa.  

"They sell that node [and our other nodes] under the CFN brand, and we sell that node under the Tier 3 brand as well," said Wendy White, Tier 3's vice president of marketing.

The main benefit of this cloud federation model for providers is that it affords a quick, affordable expansion of their service areas. CFN Services touts the enhanced reach that cloud federation brings to its private cloud services for the financial sector.

Cloud providers should note that one possible drawback to this particular cloud-federation business model is that Tier 3, as a cloud provider, remains a competitor. This may introduce a potential conflict of interest with its service-provider customers.

As stated elsewhere in this series, cloud providers should be mindful of the fact that Tier 3 won't be the last partner to offer this model; others may approach the market more indirectly, in the role of a broker or enabler.

Start from the beginning: Jump back to the table of contents for this three-part tip series, Three paths to the federated cloud: Which is right for you?

This was first published in July 2012

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