Cloud service providers (CSPs) are now embracing the role of network providers to forge new business models and redefine alliances.
Cloud service providers conventionally host compute workloads, provide storage services, and run SaaS applications in the cloud. Customers can access these cloud resources through the public Internet with the best-effort network bandwidth offered by the internet service provider. As more critical workloads, data, and applications moved to the cloud, the need grew to access these resources securely and with guaranteed service level agreements (SLAs). Enterprises require more reliable and secured network access when connecting to the cloud. To counter this demand, cloud providers set up points-of-presence (POP) locations in data centers at different locations globally. These POP locations connect directly to cloud regions with a private network managed by the cloud providers to access cloud resources. Enterprises could then bring their private lines to the POP location and connect directly with the cloud provider network. Each hyper scaler now has its private network for its cloud regions. For example, AWS has DirectConnect, Azure has ExpressRoute, and Google has Partner Interconnect.
For customers, an alternate option for connecting private lines to the CSP network is to partner with a network operator to provide access to these PoP locations using layer-1, layer-2, or layer-3 network services. Customers host or leverage services in different cloud regions for various reasons, including legal compliances, costs, disaster recovery, and workload distribution. Cloud providers have built a global backbone network to enable network connectivity to their cloud regions. Customers are charged based on usage models for transporting data over this network. These backbone networks have grown to be large and elaborate and now serve beyond offering network connectivity to cloud regions.
Cloud providers are now gearing up to become network operators. For example, AWS, through its CloudWAN service, enables inter-regional cloud connectivity without going through the public internet. Another service from AWS, Sitelink, serves as IP transport to route customer traffic to private data centers—which public internet or private MPLS networks have traditionally been doing. Comparable network service offerings from Google and Microsoft are Google Network Connectivity Centre (NCC) and Azure Virtual WAN.
Depending upon their business requirements, customers who prefer secured and reliable network connectivity to the cloud can choose from some of the following options:
Set up their private network lines to the collocated data centers and interconnect with the CSP network fabric—an expensive proposition but offers dedicated network connectivity with guaranteed bandwidth.
Use services from a network operator that connects directly to the CSP network in the collocated data centers. Various telecom and network operators such as AT&T, Verizon, and Lumen Networks offer Layer-1, Layer-2, and Layer-3 network services to the cloud. Typically, they interconnect with CSPs through their services, such as AWS DirectConnect, Azure ExpressRoute, or Google Partner Interconnect.
Some data center companies already have established networks that offer pre-provisioned network connectivity to the CSPs. These companies provide enterprises or network operators services to take them to cloud regions. For example, Equinix and Digital Reality are data center companies that operate in this space.
CSPs pursue the same model when it comes to utilizing their backbone network. Customers are charged based on data they transfer monthly over their backbone network. In addition, hourly charges are levied for network elements that facilitate routing, network security, and network attachments to cloud services and resources (for example: VMs, containers, and databases).
CSPs rely on network operators to bring customers to the collocated data centers, and an exciting business model is emerging in this space. In the future, we will witness network operators offering end-to-end network services providing access to the CSP backbone network. It is a win-win proposition for both stakeholders. Network operators have a vast expanse of global private networks (such as MPLS and already have a presence in many collocated data centers. This compels CSPs to partner with the network operators.
Network operators are in a position to offer value-added services to customers who want to leverage the cloud backbone network:
Help customers manage their cloud costs and relieve them from any shocks and surprises in billing. Provide easy visibility into end-to-end network use and costing.
Provide single-day network provisioning. Enable customers to order and manage service through a unified portal that gives insights into the CSP backbone and network operator networks.
Traditionally, IP transport has been the domain of network operators with well-established global networks who have long provided network services. A new business model providing network services is emerging that enhances network capacity and reach when both the CSPs and network operators join hands. Jointly, they will offer network services to facilitate the customers with simplified connectivity to the cloud, automated network provisioning, and extended network reachability.
