Every war is different but everyone prepares for the last war. If there was one lesson to learn from the Browser & OS Wars, it’s that open APIs and data formats are not negotible. For every API there are several wrappers and compatibility layers. For every closed format there are reverse engineers waging constant guerrilla action to force it open.
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. We envision these working similarly to network peering agreements which reduce the friction of sending data anywhere on the internet. There are already real-world examples of this, such as the special pipe between Joyent and Facebook for hosted Facebook Apps.
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:
Cloud peering will also have implications for “traditional” web services. Few companies base their operations on 3rd-party web services precisely because they are slow compared to inhouse systems. On the other hand, few companies are big enough to negotiate peering directly with the web services vendors. So here’s how having lots of businesses in a Cloud can help. The cloud vendors (eg Amazon) can negotiate with the web services vendors (eg Yahoo) on a fast Amazon-Yahoo pipe, and everyone wins.
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. There will be less incentive for, say, a website to maintain their own stale currency conversion tables when up-to-the-second rates are available with low latency.
The benefits don’t stop there, however. With some of the recent web service aggregation platforms such as Yahoo’s YQL and Gnip it becomes possible for smaller Cloud vendors to optimize routes to aggregators who have, in turn, optimized routes to web services. This makes it feasible for even smaller players to replace local services for which data freshness and quick response are required.
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.
Tom Hughes-Croucher is an Evangelist and Senior Developer in Yahoo’s Open Strategy Group, focusing on Yahoo’s Web Services and Cloud Platform. Tom has contributed to a number of Web standards for the World Wide Web Consortium (W3C) and the British Standards Institute (BSI). Previously he helped build the online music stores for some of the UK’s largest brands including Tesco, Three Telecom and Channel 4.
Carlos Bueno is CEO of Archivd, Inc. Previously he helped build Terespondo.com, a search startup which handled 65% of all search engine advertising in Latin America before it was acquired by Yahoo in 2005. Since then he has done security and performance work for other very high traffic sites including Spock.com and the US Department of Treasury.
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