By Leo Leung, Vice President, Product Management, Oracle Cloud Infrastructure

In cloud computing as in real-estate, location really, really matters

The early sales pitch for cloud computing was: “Put your data in our massive cloud regions and we’ll take care of processing and storing it for you.” The vision was of a one-way flow of data and applications from one company’s on-prem data centers to another company’s cloud data centers. That seemed a fine model as far as it went but, 15 years later, it turns out that modern- day cloud needs to be much more flexible—and a lot more distributed—than that.

There are several reasons that public cloud is not enough for all needs. 

1: Latency. When an application “server” is running hundreds, or even thousands of miles away, some “client” delays or interruptions are inevitable. For example, in high-frequency trading operations, the system executing the order and the responding system must be physically close to each other or “co-located” to work optimally. Latency between systems is measured in nanoseconds. This is an obvious issue in the many countries where cloud regions aren’t yet available, or even in states or provinces that are a long way from the nearest cloud region.  

2: Data residency. Some countries require that key data relating to their citizens and governmental processes be stored and/or processed within their borders. Some prohibit data transfer across borders even if the origination point and destination are both located in-country. As noted, many countries do not yet have public cloud regions of their own, so this is a growing issue.

3: Data sovereignty. In addition, some countries mandate that data and cloud services remain off-limits to foreign actors, be they companies or governments. Many require that employees and companies who manage and monitor cloud resources must also be citizens of the home country and cleared for such work.

For these reasons, a new, fully distributed cloud model must incorporate more deployment options. First-generation public cloud could be described as “distributed” inasmuch as the providers ran a few dozen “cloud regions” worldwide. But it was not distributed enough that a company or even a small country could have its own cloud offering the same services as the public cloud—but in the location of its choice.

Distributed cloud encompasses more deployment options, including the ability to run cloud services “out there” on a hyperscale public cloud but also inside an organization’s own cloud. That hybrid cloud model lets companies run some workloads in a hyperscale public cloud and others in its own data centers.  

And distributed cloud must embrace the reality that most organizations need more than a single public cloud and must be able to put their key workloads in the cloud that best suits them. Low-latency, secure, inter-cloud connectivity is an absolute must to promote this growing usage.

Distributed cloud puts resources where they’re needed

The vision of a truly distributed cloud is one in which clouds on the customer premises offer the exact same services as a full public cloud, but in the location of the customer’s choice.  

A key criterion in this world is that the same services that are available in hyperscale public cloud regions also be offered on premises. Offering just a subset of the services available in public cloud to run on premises will not fit the bill. Having the same broad capabilities as the public cloud ensures that customers can address several types of workloads, such as running a traditional application as well as modernizing parts of it, or building a replacement, side-by-side in the same environment.

This approach is especially important to businesses in financial services and other heavily regulated sectors, which must adhere to data residency rules governing where data is stored and how it is handled. It also offers performance advantages compared to using very powerful but often very distant cloud computing resources. If the closest cloud region to a business is thousands of miles away, data transmission and compute operations will lag.

The closer-to-home cloud construct is especially beneficial for banks or brokerage firms that want to continue running their own mission-critical databases and business applications, but in a more flexible pay-as-you-go format. 

As an example, Deutsche Bank has turned to Oracle Exadata Cloud@Customer to run its own computing operations. This keeps key customer data on premises under bank control and ensures fast response times, but also offloads the chore of updating and managing hardware and software resources from the bank’s IT staff to Oracle.

 Flexible siting of cloud resources eases data sovereignty concerns

A distributed cloud is also a winning proposition for government agencies that have their own mandates for data protection and security. Putting citizens’ private data or sensitive government intelligence on shared resources or shipping it across national borders from cloud region to region is not acceptable to many governments. What government entities really want is a purely “sovereign” cloud, which segregates government and citizen data, keeping it safe, secure, and in-country. 

To meet these demands, Canberra-based Australian Data Centres is deploying Oracle Dedicated Region to deliver secure cloud services to government agencies. Use of Oracle Dedicated Region Cloud@Customer gives it physical control over its computing resources, allowing it to meet data sovereignty regulations for Health, Human Services, and other security-minded government entities, while also providing full access to all the services offered by Oracle Cloud Infrastructure (OCI) public cloud.  

Remember: While many business applications have moved to public cloud, most research firms say that the vast majority of corporate workloads still run on-premises in corporate data centers. There is still a huge amount of work to be done to modernize these applications and allow companies to run them how (and where) is most productive. 

When cloud becomes truly distributed, corporate and government entities can enjoy the full benefit of public cloud services while keeping data and applications close to home. That will be a big win for customers worldwide.