Cloud 3.0 — Decentralized Service Marketplaces

How The DAPP Network Could Evolve the Multi-Billion Cloud Computing Industry

TL;DR

  • Amazon, Microsoft and Google alone control 67% of the entire cloud computing market and lock consumers into their ecosystem by making it difficult to migrate away from their products.
  • The DAPP Network is a decentralized marketplace for cloud-like services that allows anyone to join and offer different services on a free-market basis. Instead of going head-to-head with mega corporations, cloud service providers can join the DAPP Network and leverage its collective network effects to be competitive once again.
  • If you’re a cloud-based service provider, choose whether to build and offer your own services or utilize a number of templates available on the DAPP Network — which include memory, storage and compute.

In 2011, a panel of independent linguists at the American Dialect Society’s awarded ‘cloud’ the title of a ‘Most Likely to Succeed’, capturing the optimism surrounding this new computing trend.

What began in the 90s as an attempt to solve scaling problems at Amazon had by then morphed into a $89 billion Infrastructure-as-a-Service industry comprising other key players such as Microsoft and Google. Public cloud platforms allowed companies to ‘outsource’ digital resources, such as data storage and computation, to remote providers instead of running their own servers and operating them on-premise. This paradigm shift allows developers to dedicate their resources to their applications instead of having to focus on establishing and maintaining the necessary service infrastructure.

Fast forward to the present day and cloud computing has exceeded the linguists’ expectations, mushrooming into a $206.2 billion market dominated by the largest tech companies in the industry. However, these companies engage in anti-competitive practices known as ‘vendor lock-in which prevent smaller service providers from gaining a foothold in the industry. By bundling cheap versions of their competitors’ solutions with the rest of their service suite, these tech giants disincentivize users from leaving their ecosystems. Even switching between different cloud giants is a costly and inefficient process.

In keeping with the spirit of open-source, permissionless blockchains are accelerating the emergence of a new model of cloud computing — one that is decentralized, interoperable, and offers more choice and opportunities for providers and consumers alike.

The DAPP Network is a platform for cloud-like services that allows anyone to join and offer services on a free-market basis. For both providers and consumers, decentralized cloud marketplaces offer more choice, more redundancy and more opportunity.

If you have a cloud-based service offering, you could choose to go the traditional route and compete with @amazon, @Google and @Microsoft.

Or you can join the #DAPPNetwork and tap into the power of a free market-based #Cloud3 platform. (Click to Tweet)

From a Side Project to a Multi-Billion Dollar Industry

If you love elaborate tales of innovative breakthroughs, you can’t help but feel a little disappointed when reading the story of how Amazon Web Services (AWS) came to be. There was no ‘eureka’ moment which spurred the creation of the Amazon department which generated $25.7 billion in sales for the tech giant last year. It began as a mission to build standardized infrastructure, including compute, storage and database services, that could be scaled up and reused by Amazon teams building their individual projects. The first product to debut on the platform was S3, a simple storage service that provided an alternative to housing large quantities of data on-premise.

Instead of spending precious resources building infrastructure from scratch, developers can leverage S3 and other AWS products, which give them the freedom to focus on actually building their applications. On the backend, S3 accomplishes critical tasks such as load balancing, partitioning the data between different servers to ensure redundancy, and providing real-time monitoring on resource utilization. Developers can seamlessly spin up comprehensive infrastructure by combining S3 together with other Amazon services, such EC2 for computation or CloudFront for content delivery.

Other tech giants, Google and Microsoft in particular, soon saw the way the wind was blowing and began to market their own cloud offerings. Google Cloud arrived in April 2008, while Microsoft launched Azure in February 2010. Together, Google, Amazon and Microsoft giants control 67% of the total market share, making it increasingly difficult for mid-level companies and start-ups to compete. Furthermore, these companies purposefully limit compatibility, stifling innovation and limiting consumer choice. The cost and inconvenience of migrating across cloud providers means many companies are essentially stuck with their original vendor. This phenomenon, known as vendor lock-in, restricts companies who wish to adopt multi-cloud strategies and combine different services from different providers.

Anti-competitive practices hurt consumers, providers and the ecosystem as a whole. Thankfully, they don’t tend to last very long. Make the first move, Join the DAPP Network community today!

Furthermore, the economies of scale enjoyed by these cloud giants make it difficult for start-ups and smaller companies to compete. If a cloud-like service gains traction, Amazon, Google or Microsoft could simply copy the idea and bundle it up with the rest of their product suite, even offering steep discounts for early adopters.

From a redundancy standpoint, as long as crucial infrastructure components remain centralized, all the critical internet services we depend on are at risk of network congestion and malicious attacks targeting a single point of failure and bringing down the whole system. Late last year, for example, a distributed denial-of-service (DDoS) attack overwhelmed AWS’ resources and rendered crucial services unreachable for long hours.

Shifting to a decentralized marketplace could boost cloud platforms with additional security through redundancy. If one of your service providers is unable to fulfill their agreement as a result of a hack or technical difficulties, backup providers will be on hand to carry out your request quickly. Meanwhile, each one of the service providers on a decentralized marketplace stands to benefit from the aggregated network effects of the platform.

Chart made available by Statista.com under the Creative Commons License CC BY-ND 3.0

Cloud 3.0 for Web 3.0

By virtualizing storage, compute and other crucial developer resources, cloud computing transformed the way we work and enable collaboration on a mass scale. Instead of having to store, manage and process all their data on local servers, companies can leverage the cost savings and convenience that comes with outsourcing these tasks to cloud providers. Cloud computing ushered in the era of remote work by enabling a distributed team of engineers to share a unified virtual environment on which to develop, test and deploy their projects.

Today, blockchain technology is enhancing the functions of the traditional cloud with the characteristics of decentralization. Storage, computation, content delivery and other essential services can be accessed on decentralized platforms such as the DAPP Network. By shifting from an oligopoly dominated by tech titans to a free market populated by smaller players, the cloud computing ecosystem will reap the rewards of enhanced trustlessness, freedom and interoperability that result from a decentralized environment. Furthermore, independent providers that struggle to compete with the well-capitalized market leaders can come together on a single plug-and-play platform to boost their network effects and maximize their probabilities of success.

On the DAPP Network, crucial services such as storage and computation take the form of service packages, which are offered by DAPP Service Providers (DSPs) on a free-market basis. Developers are free to choose whichever package they wish to use, and they can mix and match amongst different providers on the basis of cost efficiency, performance, and reputation. They access services by staking DAPP tokens to their preferred packages and can simply unstake should they be dissatisfied with the DSP’s performance. Combining the DAPP Network’s staking mechanism with on-chain auditability creates a natural incentive for DSPs to remain honest and reliable.

Furthermore, selecting multiple providers is not only enabled, but it is also encouraged as a means of ensuring redundancy and increasing security by decentralization. Should a single service provider fail to meet the terms of their Service Level Agreement (SLA), developers can rely on backup providers to supply the necessary resources.

With the recent announcement of LiquidX, the DAPP Network extended its functionality beyond a single blockchain towards becoming a universal middleware solution for crucial developer services that could work on multiple chains. Some examples of cloud-like services running on the DAPP Network include:

Decentralized Memory using vRAM: The vRAM System is an alternative memory solution for developers building EOS dApps that is RAM-compatible, decentralized, and enables storing and retrieving of potentially unlimited amounts of data, affordably and efficiently. Developers can use vRAM as persistent memory for their application data and reduce the amount of scarce blockchain memory they require.

Decentralized Compute using vCPU: Network congestion can occur as a result of too much load being placed on the limited processing power available on base-layer blockchains. vCPU is a way to scale blockchain processing power horizontally while providing far more computing power per action than native blockchains can provide. It harnesses DSPs to execute processing tasks in parallel before returning results that can be compared on-chain. Since DSPs live on a second layer while still running full blockchain nodes, they are able to read requests from the chain, handle computations in parallel, and return the results to the requesting dApp on-chain.

Decentralized Storage using LiquidStorage: LiquidStorage builds upon IPFS, a distributed file storage system, to deliver honest, high-performance decentralized storage. DSPs are uniquely incentivized to store files on behalf of users, and they serve those files with minimum latency upon request. A decentralized storage system that can handle the explosion in the volume, variety, and velocity of data generated online can finally challenge the traditional client-server model and serve as the backbone for web3.0.

Got A Cloud Service In Need of Users? Join the DAPP Network as A DSP!

We’ve seen this narrative playing out before. A tech giant corners the market for a widely-adopted, breakthrough solution and creates a dependency on their product by making it difficult for consumers to switch providers. Apple locked consumers into their iTunes ecosystem by making it impossible to load media onto an iPad, iPod or iPhone from any other music software. Similarly, Microsoft bundled a range of key software with its Windows operating system to discourage users from checking out competing products. Today, cloud providers lock consumers into their platforms by making it costly and inefficient to migrate to a competitor. However, these anti-competitive practices cannot last forever. Microsoft eventually embraced the open-source Linux operating system, while Apple has long since dropped the iTunes requirement for users wanting to upload media onto their i-Device.

While the trend towards interoperability and open-source is inevitable, it takes brave early-adopters to kickstart the movement towards a more equitable market for cloud computing.

If you’re a cloud-based service provider, you can be part of the mavericks. Tap into the power of free-market economics by joining the DAPP Network as a DSP instead of going head-to-head with Google, Amazon, and Microsoft. Choose whether to build and offer your own services or utilize a number of templates available on the DAPP Network — which include decentralized memory, storage and compute.

Consumers will be free to switch to your service instantly by accessing them through a DSP Portal. They can also choose to utilize your service in conjunction with other services in order to gain redundancy and trustless functionality. It’s a win-win for everyone.

Anti-competitive practices hurt consumers, providers and the ecosystem as a whole. Thankfully, they don’t tend to last very long. Make the first move, Join the DAPP Network community today!

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DAPP Network

DAPP Network

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DAPP Network aims to optimize development on the blockchain by equipping developers with a range of products for building and scaling dApps.