New Cloud Federation Business Model for CDN Services

OnApp Federates Cloud Hosters to Deliver Worldwide CDN Services, and then . . .

We may be witnessing the ants in the Internet ant hill starting to pull together to compete against Goliaths like Akamai and even Amazon Web Services. After a decade of status quo in the CDN space, we're seeing an innovative new business model--one that federates cloud service providers to offer content delivery services over participating cloud hosters' infrastructure . . . anywhere. A UK company named OnApp has created a federated CDN platform for cloud hosters, which enables them to rent unused computing capacity to and from each other to deliver CDN services. Each federation member names its selling price and can buy service from others based on price, location, capacity, or other factors such as data center security and reliability.

OnApp operates the CDN, and acts as a service broker, pocketing a fee for each transaction. According to OnApp's CMO Kosten Metreweli, after only a short time in business, OnApp has over 60 federation members worldwide. Metrewelli believes this business model is price-disruptive, and will allow cloud hosters to provide first CDN and subsequently other cloud services at an attractive price point, as well as to garner revenue by renting unused capacity. He tells us that the model is being embraced most enthusiastically in underserved regions of the world like Asia and Africa.

We believe this is a harbinger of the coming Intercloud (a.k.a cloud federation) that we wrote about back in January. The Intercloud may be here sooner than we predicted.

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