Cloud's commodity pricing squeezes service providers, creates opportunities

By Jeff Vance, CIO |  Cloud Computing

As the company worked with its service provider customers, it soon realized that excess capacity in data centers could be put to good use - and it could help providers earn more money. OnApp then rolled out a cloud-based content delivery network (CDN) service that relies on excess capacity at service providers all over the world. Not only do providers get an extra service to sell, but CDN services could be offered at a price that smaller companies could now afford.

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Czech Republic hosting provider,, used OnApp's CDN service to roll out its own CDN service, Because of how the service is designed, the company can offer "no commitment" CDN services to its customers for as low as $4.90 per 100 GB. That would have been unheard of two or three years ago.

Another service that used to be out of reach for smaller and even any mid-market companies is unified communications (UC).

"UC has traditionally been deployed either as a static cloud service with few features and no customization or in a highly customizable, chassis-based environment on the company's premise," says Jon Brinton, president of Mitel's NetSolutions division.

With this excess cloud capacity being available, Mitel has been able to create a UC cloud service by offering not just the UC software, but a virtual private data center on which to run and mange it. The service includes computing, memory, storage, connectivity and SIP trunking. In other words, it takes a complex, expensive solution and offers it up as an affordable, easy-to-consume service.

"This new kind of cloud-based service, which wouldn't be possible without the excess of cloud capacity we enjoy today, allows customers to rapidly deploy our solution in a scalable, manageable, resilient environment that delivers the benefits of centralization and virtualization without the heavy lifting associated with sourcing a cloud provider," Brinton adds.

Grid Computing Helps Search for Intelligent Life

Some of these advances actually harken back to the past. Before cloud became all the rage, a number of "grid computing" companies raked in serious VC funding. Probably the most famous grid project is SETI@home. This UC-Berkeley hosted project uses idle computing capacity to help search for extraterrestrial intelligence (SETI stand for Search for Extraterrestrial Intelligence). Remember the movie Contact? That's pretty much what SETI is up to.

Originally published on CIO |  Click here to read the original story.
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