Cloud Peering 4.4 http://spkr8.com/t/2141

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Cloud computing and the Platform War it will bring is different because there are fundamental problems that you can’t code your way out of. Network latency is one of them. The poor quality of inter-cloud data exchange creates an inherent bias towards using a complete solution stack from a single vendor. This lockin is especially devilish because no one can be blamed for actively creating it, and every vendor gains by ignoring it.

Network latency is (roughly) the time it takes to send a packet of data from point A to point B, and it directly impacts the utility and cost of any distributed system. Cloud vendors put a lot of effort into reducing latency within and between their datacenters. But between vendors, data is transmitted over the open internet, where bandwidth and latency degrade considerably. So the customer is charged twice for degraded service, whereas intra-cloud data exchange is essentially free.

Thus through neglect, vendors can create lockin. If you stay within the confines of a single vendor everything is cheap and fast. If you stray outside of that vendor’s cloud everything becomes expensive and slow. It is infeasible to use (say) one vendor’s virtual hosts with another vendor’s database service—not because they are “incompatible” but because, in network terms, they are too far away. Latency reduces customers’ negotiating leverage: switching vendors becomes more of an all-or-nothing thing.

We propose that the cloud vendors work out peering agreements to establish fast and cheap communications between their datacenters. Cloud vendors are well-placed to do for web services what Content Delivery Networks (CDNs) do for images and video: bring them closer to their consumers as well as reducing the costs of the original publisher.

We propose that CTOs who are being wooed by cloud vendors demand interoperability not just of APIs but also in the transfer of services. Right now, before they hand over their data, CTOs hold the most leverage they will ever have. They shouldn’t budge until the latency trap is disarmed.

We will also talk about how smaller companies can minimize risk and preserve their leverage:

Servers are cheap: have deployable copies of software ready to switch to alternate vendors. Host your development site on a separate cloud. Carlos has tips and experience on this from his work at Archivd, Spock, Terespondo (Yahoo Search Marketing), and irs.gov.

Space is cheap: Keep continuous backups of data in three places: Cloud A, Cloud B and your office.

Talk is cheap: demand real progress on the issue every time you talk with your vendors.

The most remarkable thing about the Cloud is that it gives organizations benefits that only larger internet entities could enjoy before. Among these is a degree of freedom to help shape the evolution of the internet in their favor. As more customers gather under the umbrella of Cloud vendors, they should be mindful of the leverage they are giving up, and how to use their collective leverage to steer things their way.

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