Cloud Computing Specialisation and the Emergence of Local Champions

I recently attended an announcement of the launch of an Australia-based IaaS firm, Ninefold. The firm addresses many of the challenges created by cloud computing. Its local IaaS offerings represent a key part of the evolution of cloud computing and the emergence of a utility based form of computing.

Most of us have heard about the benefits of cloud computing such as rapid provisioning, usage based pricing, multitenancy (leading to economies of scale), greater scalability, instant updates, and a reduced need to hire scarce skills.

We are also familiar with the challenges associated with cloud computing, such as quality of service issues, provision of support and data sovereignty. Overcoming these challenges is critical, if cloud computing is to evolve further.

At present, data is subject to the regulations of the country in which it sits. As yet, there are no international regulations that protect data from misuse. Such regulations are necessary to overcome concerns about data sovereignty. The WikiLeaks saga has damaged confidence in overseas cloud providers and Amazon has done a lot to cause this, by bowing down to pressure from politicians. Plenty of people may not like the actions of WikiLeaks but its actions have not been proved to be illegal. This precedent suggests that if US politicians do not like what a business is doing or are corrupt (this is possible), they can interfere with cloud-based businesses. Therefore, it is reasonable to assume that politicians in other jurisdictions, like their US counterparts, may choose to interfere with a business, foreign or domestic, because they do not like its activities. This is a very compelling argument for keeping data close to the organisation.

Cloud services that are provided from international locations are often unable to offer the latency and speed that is required for certain activities. Cloud services that are provided in-country or even in the same city can offer higher performance levels. This is another argument for keeping data nearby.

Cloud services such as those offered from US-based datacentres, offer great value for money. But, this service typically does not offer any local support. Although cloud computing reduces the need for support dramatically, some local support will be necessary for some organisations. A lack of available support will also act as a hindrance to the adoption of some Amazon-style cloud computing services.

Companies are emerging that seek to address key challenges associated with cloud computing and to provide offerings that are more specifically targeted. Ninefold offers IaaS that is comparable with Amazon’s offerings, except that it addresses many of the challenges associated with using Amazon. Issues with data sovereignty are immediately overcome as its datacentres are located in Australia and its offerings are targeted at Australia-based customers. Issues with quality of service, in particular latency and speed, are addressed by the relative proximity of Ninefold’s datacentres to customer premises. Finally, support issues are addressed by the provision of local support.

Ninefold can be seen as part of the evolution of cloud computing as we move to a utility model of computing. Instead of offering standard services across the globe, it has specialised in serving one geography, Australia. Continued specialisation can be expected as customers demand cloud services that meet increasingly specific requirements. What form will this specialisation take at a local level?