A federated cloud (also called cloud federation) is the deployment and management of multiple external and internal cloud computing services to match business needs. A federation is the union of several smaller parts that perform a common action.

This is a confusing term. And, to complicate it further, it’s changing quite a lot.

Originally you have Public, Private and Hybrid clouds. Hybrid clouds were those that spanned private and public environments. Essentially, the scale out scenario or cloud burst scenario was often used to describe peak load expansion to a public cloud environment (think holiday sales promotion requiring more horsepower).

Federated cloud usually describes joining up and managing multiple public cloud environments – but there is nothing to prohibit joining multiple public clouds to a private one (so some overlap with Hybrid).

The central idea is that you have multiple IaaS and PaaS environments in the cloud. An application or a set of services may require the joining up and managing multiple PaaS and IaaS environments. The reasons for choosing federated cloud is, they are usually either functional, location or cost-based. You can get a lot of flexibility here, as you don’t need to rely upon a single vendor to support you, so there is less vendor lock-in. However, the flexibility you gain can be at the cost of complexity.

You now have multiple different SLAs, you have to manage potentially different APIs, monitoring and management and deployment approaches.