Satellite-Based Cloud Computing Competition

Russ Steele

I just returned from a trip to the Seattle area where cloud computing slipped into the conversation with Amazon announcing the formation of a low latency satellite internet network to provide services, including cloud computing. This new development could bring fast cloud computing services to billions of new customers.

What is cloud computing you ask? Generally, cloud computing services are categorized into three types:
1) Infrastructure as a Service (IaaS): This service provides the infrastructure like Servers, Operating Systems, Virtual Machines, Networks, and Storage on rent basis. Recognized providers include Microsoft Azure and Amazon Web Service

2) Platform as a Service (PaaS): This service is used in developing, testing and maintaining of software. PaaS is same as IaaS but also provides additional tools like database management systems and business intelligence services. Primary provider are Microsoft/RedHat, IBM, and Oracle

3) Software as a Service (SaaS): This service makes the users connect to the applications through the Internet on a subscription basis. Examples are Google Applications, Salesforce, and Microsoft.

Amazon AWS, Microsoft, and Google are all using their infrastructure to provide more cloud-based business services, but now Amazon has changed the game by joining the LEO satellite broadband internet providers. By using a space-based network, AWS is building out service infrastructure to provide cloud connectivity to global customers, faster than surface based competitors, especially over long distances.

The question is can Google and Microsoft stay in the game with Amazon satellite broadband delivered cloud computing services across the globe.

Google Filed patent US 20170005179, on September 30, 2014, for a constellation of 1000 satellites to cover 75% if the earth. However, Project Loon, a series of balloons to provide WiFi services for broad swathes of the unserved area around the equator seem to take priority. With billions in the bank, Google could act on its patented network to become a space-based cloud service company.

What about Microsoft? How do they compete in the cloud computing service business when they are confined to earth-based fiber networks? Satellites networks with laser interconnections are much faster than fiber networks. For example, studies have shown fiber latency between San Francisco and London is about 146 ms, whereas the SpaceX satellite link is about 50% faster at 73 ms, with twelve satellite hops.

Microsoft’s Azure cloud is a rapidly growing business segment. Fiscal third-quarter sales in the company’s Azure cloud computing segment rose 73% year-over-year according to 3rd Quarter Report.

“Leading organizations of every size in every industry trust the Microsoft cloud. We are accelerating our innovation across the cloud and edge so our customers can build the digital capability increasingly required to compete and grow,” Microsoft Chief Executive Satya Nadella said in the earnings release.

If I were a Microsoft advisor, I would recommend Microsoft CEO Satya Nadella investigate becoming a partner with SpaceX or one of the other LEO constellations that has an inter-satellite communications architecture to provide a suite of fast cloud computing service applications.  The game is changing and the winner yet to be determined.

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