Since 1991, the American Dialect Society‘s has published a ‘Word of the Year’ as determined by a panel of independent linguists, as well as their pick of words from a variety of categories such as ‘Most Useful’, ‘Most Creative’ and ‘Most Likely to Succeed’. 2011 saw ‘cloud’ emerge as the likeliest word to succeed, capturing the optimism surrounding this new computing trend.

Since 1991, the American Dialect Society‘s has published a ‘Word of the Year’ as determined by a panel of independent linguists, as well as their pick of words from a variety of categories such as ‘Most Useful’, ‘Most Creative’ and ‘Most Likely to Succeed’. 2011 saw ‘cloud’ emerge as the likeliest word to succeed, capturing the optimism surrounding this new computing trend.

What began in the early 90s as an attempt to solve scaling problems at Amazon had morphed into a $81 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. These cloud providers manage all the necessary tasks behind the scenes, such as partitioning the data between the various servers and balancing the work amongst a set of machines. 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, the shift from closed-sourced networks to permissionless blockchains is 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. They can choose to build their own services or utilize a number of templates available on the DAPP Network. For both providers and consumers, decentralized cloud marketplaces could offer more choice, more security and more opportunity.

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 revenue for the tech giant in 2018. AWS 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. 

Furthermore, the economies of scale enjoyed by these cloud giants makes 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 security 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 fulfil 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 stand to benefit from the aggregated network effects of the platform.

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Chart made available by 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 enabled 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, it is 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.

Technology Tends Towards Openness and Interoperability

We’ve seen this narrative playing out before. A tech giant corners the market for a widely-adopted, breakthrough solution and creates a dependency for 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 their 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.

Decentralization could break down the walls that exist between various cloud providers and push the industry to adopt characteristics of an interoperable free market. Consumers would be free to use any number and combination of providers- gaining additional security and functionality – without the need to trust any single provider.

Anti-competitive practices hurt consumers, providers and the ecosystem as a whole. Thankfully, they don’t tend to last very long. Accelerate your transition to a decentralized platform by joining the DAPP Network community today!