The transformation of computing technology has undergone a series of transformative shifts, from mainframes to personal computers, and now to the cloud. Currently, the common approach to implementing web infrastructure is by being a paying client of large companies like Amazon or Google and utilizing infrastructure as code to initiate a network of interoperable services on their servers.
Claudia Richoux, the CEO and founder of Banyan, which is a decentralized file storage system built on the Filecoin network, observes that the current dominance of cloud hyperscalers, who possess a significant portion of the world’s computational power, is not a natural monopoly.
Instead, it is a temporary situation as the open-source community endeavors to develop a decentralized solution that will revolutionize the industry once again. The decentralized solution will allow users to freely switch between service providers, thus promoting healthy competition and giving businesses more freedom to negotiate terms with their cloud providers rather than being tightly entangled and reliant on one entity.
Learning from the success of Linux, we can comprehend the potential of a decentralized cloud. It took a decade for Unix, created by Bell Labs, to transform into Minix, and another decade for Minix to evolve into the widely accepted Linux. After another decade, Linux became the go-to choice for developers. Currently, Linux open-source software is ubiquitous, running on 80% of public servers and all supercomputers. It is the platform of choice for developers when using the Elastic Compute Cloud (EC2) service provided by Amazon.
Linux’s triumph was built on the power of shared, open development gains. Operating systems are complex and monumental, necessitating extensive research, testing, and millions of hours of specialized labor to create competitive ones from scratch. However, after years of government-funded and hobbyist-sustained incubation, Linux reached a usable state, and the advantages began to multiply.
Companies began to adopt and rely on open-source operating systems, and the massive operating system kernel codebases became “the commons,” with individuals chipping in to improve it. Every user of the Linux kernel searches for bugs, and some even contribute patches.
In other words, open-source software support may be more affordable than closed-source software support plans, attributable to the fact that the cost of creating the product itself is significantly lower. The cost of Linux to a business is usually measured in fractional developers lending a hand or support plans for companies without in-house kernel expertise.
In contrast, building and maintaining a proprietary operating system is a costly affair, requiring the controlling entity to cover the entire cost for its lifetime. This means that the cost of consumption must be high enough to make the endeavor economically viable. In cases where various closed operating systems compete, each must fund its development and attain a substantial market share to recoup their considerable investments. This factor explains the state of the market today to a significant extent.
Similarly, the cloud is another form of operating system. It is a tool that abstracts the time, location, resources, and interactivity of jobs. Whether it is a managed database, an open-source Kubernetes cluster, or running a program on one’s computer, the cloud, like an operating system, is a complex resource manager, scheduler, and security provider.
Since the cloud operates on a much larger scale, AWS, GCP, Azure, and DigitalOcean have become the mainframe computers of our time, maintained by each organization independently.
Therefore, where is our open-source contender? OpenStack, developed by Rackspace and NASA in the 2010s, was intended to be an open-source cloud stack that could be deployed in any data center to convert it into an AWS equivalent. Although it has been declared “dead” due to the mentioned reasons, it is still in ongoing development by several firms, mainly of Chinese origin, who are constrained by government infrastructure regulations to use it instead of AWS.
One notable advantage of open-source codebases is their resilience, as their knowledge and influence are encoded in git repositories rather than from human processes. In this regard, even if the original OpenStack-based business models cease to exist, the software itself will remain active, giving open-source contenders more opportunities to succeed since they can be easily revived.
However, OpenStack “failed” due to each company’s desire to have control over the development roadmap by having their distribution of the software. This approach resulted in fragmentation and competition rather than collaboration. Most significant companies released their OpenStack distributions, leading to a fractured ecosystem that then battled for control, impeding development and progress.
The absence of standardization among OpenStack distributions made it challenging for users to deploy and manage clouds consistently. Additionally, its complexity made it challenging to install and operate compared to more refined public cloud services from Amazon, Microsoft, and Google.
To avoid future failure, we must utilize our secret weapon, which is nodes, consensus, block rewards, public goods, and ecosystem alignment research. After 15 years of running blockchains, node distribution is a mostly resolved issue, and therefore, standardization is something we can achieve. We must define the right public goods mechanisms and ways to align users to unite them around protocols instead of encouraging endless forking, competition, and defection. We also need to come up with innovative ways to govern and establish shared development priorities. Fortunately, we have the necessary financial primitives and collaboration tools to make this a reality; all we need is to keep working towards our goal.
We are closer than we think to a decentralized cloud market, which could potentially bring in hundreds of billions of dollars to the ecosystem, particularly with the forecasted 11% annual growth rate of the cloud market. However, there are some gaps that need to be addressed before we can achieve success, and one major area that we are lacking in is making sensible product decisions. Currently, most Web3 decentralized cloud services have limited product-market fit, with the majority of users using these protocols solely for their token incentives, which is unfortunate.
Nevertheless, speculation can drive growth and improvement as long as we listen to user feedback and carefully use reward mechanisms. We must design and build solutions that are as usable and reliable as OpenStack while blending our unique monetary structures with Web2 and cloud hyperscaler monitoring, compliance, and security technologies.
Most of us in this field have prototypes and minimum viable products that mimic the successes of Web2 cloud products, instead of striving to rival the industry incumbents by working with users and adapting to their needs. However, solely focusing