Guest Blog by: Andrew L. Rossow, Esq.
One of the distinct takeaways from this year’s SXSW Conference was that “Blockchains Are Building the Web 3.0,” a notion compounded by the advancing narratives towards decentralization, privacy, and security among an increasingly circumspect public.
Where much of the focus revolves around DeFi, blockchains have a unique place amongst emerging technologies as an infrastructure tool that translates across industries. Decentralization is not always necessary or prudent, but it can complement, and in many instances improve, existing areas where inefficiencies are becoming apparent.
One of those areas is cloud computing, where centralization, sustained outages, high barriers (e.g., costs) to access, data security/privacy, and edge device inefficiency are all revealing themselves as points of friction in a market dominated by big tech.
Included in the projections of the Web 3.0 is the notion of a multi-cloud computing landscape, replete with numerous boutique cloud providers and fluid marketplaces of computational resources — supplemented by decentralized networks.
While blockchains are poised to play an important role in multi-cloud computing, the next iteration of cloud computing appears to occupy the convergence of multiple technologies.
Surveying the Principal Advantages & Benefits of Centralized Cloud Computing
Major cloud providers like Amazon AWS, Microsoft Azure, and Google Cloud have had a profound impact on the current mold of the Internet. They have empowered digital businesses to flourish by offloading in-house IT costs, consequently enabling them to operate with the advantages born from economies of scale on razor-thin budgets.
Similarly, the redundancy of data storage in centralized servers makes accessing data convenient anywhere at any time. Lost passwords can be recovered, and businesses can work on other aspects of their operation while web hosting, computation, and other IT services are handled by the cloud provider.
The leading cloud service providers hold vast cash reserves and generate billions in revenue annually, which they pour into operational costs and maintenance of their networks. These networks are even integrated with leading business products like CRM software (e.g., Salesforce), IoT devices, and other business processes like document management.
The current cloud computing market is enormous and is expected to reach $411 billion by 2020.
However, that doesn’t mean it comes with its deficiencies, as increasing centralization of size can lead to concavity, and subsequently, veiled risks beneath the surface.
Those risks concerning cloud computing primarily come in the form of higher costs, reduced efficiency in connectivity, lack of privacy, and susceptibility to large-scale outages of the black swan variety. Finally, the current centralization of the cloud provider ecosystem furnishes little optionality to the users (i.e., enterprises), who for the most part, are stuck between a few similar services and virtually no competition.
A Decentralized Alternative — Multi-Cloud Computing
The promise of multi-cloud computing is not to outright replace the current paradigm; simply, it is to complement and enhance it via several methods. Namely, decentralization and optionality, both of which have positive downstream consequences in areas ranging from connectivity in remote regions of the world to resilience to large-scale networking outages.
For example, businesses lose a reported $700 billion per year due to IT downtime, with the vast majority of that infrastructure for larger enterprises coming from cloud service providers.
Relevant examples include CloudFlare’s recent outage, a premier CDN provider, where Internet service across the globe went down due to a poor software update delivery.
“With a multi-cloud computing landscape, comprised of decentralized networks, the robustness of connectivity is vastly improved,” shared DeepCloud AI CEO, Max Rye. “Not only are networks more resilient to outages, but connectivity can extend to more remote regions, with resources providers (i.e., bandwidth, computation, storage, etc.) providing the necessary components for developers or enterprises in areas with poor Internet infrastructure to remain online.”
DeepCloud AI has proposed an intriguing concept for a better model of cloud computing, using a blend of a blockchain and an AI-driven infrastructure. For example, DeepCloud AI cites how the AI in their platform can help adjust in real-time to demands for resources, whether that be computational or bandwidth requirements.
Not only does this have an impact on reducing costs and improving efficiency in marketplaces for resource providers, but it is especially relevant at the edge of networks — like IoT devices and remote regions.
A collateral bonus of distributing the cloud computing landscape is reduced barriers to accessing digital services — such as DeFi — and local processing of data, rather than on centralized servers — a huge boon for privacy.
Particularly when it comes to resource allocation, economics proves that the centralized “command-control” model simply does not work, as Adam Smith highlights with his analogy of the “Invisible Hand,” where self-interests among localized, independent individuals drive prices in the market — with prices serving as information to market participants.
Translated to cloud computing, the centralized paradigm of providers like Amazon and Microsoft manifests itself with both unique advantages and disadvantages.
“Cloud platforms are enabling complex business models and orchestration of larger globally integrated networks surpassing all prior predictions by analysts,” Rye stated. “However, as we progress towards a much more sophisticated Web 3.0, complete with microservices, micropayments, and decentralized applications, centralized infrastructure is not suitable for efficient resource allocation.”
The solution is to distribute resources throughout global markets, where everything from bandwidth to Internet transit technology can be bought and sold in a fluid market that adjusts in real-time.
Optionality among cloud resources then becomes a natural insurance for users, puncturing narratives of big tech dominance in the process.
The question of whether multi-cloud computing can compete with tech giants is a double-edged sword. The short-term trade-offs will be convenience (i.e., central cloud computing) for better efficiency and resource allocation. However, that does not necessarily mean the two are mutually exclusive.
Considering the sheer size, power, and popularity of current cloud services, amid the backdrop of innovation with multi-cloud computing, the two appear positioned to complement each other rather than duke it out for supremacy in a high-level polarization of centralization vs. decentralization.
Andrew L. Rossow is a millennial attorney, law professor, entrepreneur, writer, and speaker on privacy, cybersecurity, A.I., AR/VR, blockchain, and digital monies. He has written for many outlets, most notably Forbes and HuffPost