Federation: an organisational structure where the parties concerned are autonomous but cooperate through agreement.
The Cloud Computing paradigm is, at its core, about improved sharing, where the means of sharing is through the consumption of services. With constantly improving network capacity IT users are now able, in many cases, to consume services sourced from third parties rather than managing their own applications. As a consequence services will increasingly be delivered by providers who can reduce service costs by taking advantage of economies of scale. This trend puts economic pressure on IT consumers to utilise shared services, and by implication the IT resources (hardware, software and staff) used to deliver those services. As prices fall, and shared services proliferate and mature, it is inevitable that we will see a gradual but consistent move from services delivered by dedicated IT to services delivered by shared IT.
However, for at least three reasons we are unlikely to move to a situation where all IT resources are in the hands of a few providers, irrespective of the economic benefits. Firstly, there will be many cases where sharing is unfeasible or undesirable – bespoke services may not deliver value to anyone but their creators, or may be of such competitive value that the creators will keep them to themselves; other services might have restrictions e.g. security or latency considerations, that prevent sharing from occurring. Secondly, the transition to using shared services will be very gradual (due to inherent conservatism and to sunk costs in existing dedicated IT) and therefore it will be many years before even all of those services which could be shared, will be. Thirdly, governments will not allow such strong economic controls to be concentrated in the hands of a few.
As a consequence, at Arjuna we believe that IT services will increasingly be delivered by a complex, interconnected network of federated service providers. Providers will consume services from each other, organisations will cooperate together to share services to mutual advantage, service brokerage and trading will be commonplace. Given the variety and multitude of possible IT services we believe that the resultant network will be orders of magnitude more complex than other service delivery networks such as the electricity grid or telephone network. While a lot of effort has been aimed at enabling the technical integration that is required in order to build such networks, we believe that insufficient effort has been directed towards issues of organisational integration. In particular we believe that much of the complexity in federated networks will come from the need to manage service agreements between organisations.
Arjuna’s Agility product delivers the service agreements that are the glue for the Federated Cloud.