  Networks connecting distributed cloud services through multiple data centers
are called cloud networks. These types of networks play a crucial role in cloud
computing and a holistic performance evaluation is essential before planning a
converged network-cloud environment. We analyze a specific case where some
resources can be centralized in one datacenter or distributed among multiple
data centers. The economy of scale in centralizing resources in a sin- gle pool
of resources can be overcome by an increase in communication costs. We propose
an analytical model to evaluate tradeoffs in terms of application requirements,
usage patterns, number of resources and communication costs. We numerically
evaluate the proposed model in a case study inspired by the oil and gas
industry, indicating how to cope with the tradeoff between statisti- cal
multiplexing advantages of centralization and the corresponding increase in
communication infrastructure costs.
