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The latest updates from our team of experts. Find out what’s happening here at 6fusion and our take on the industry at large.

Quantifying the Value of a Cloud Market

Joe Weinman, SVP at Telx and author of Cloudonomics, recently wrote a great article about a unique way to quantify the value of the cloud market using order statistics. The post highlights the importance of normalizing pricing across cloud providers, exactly what 6fusion is doing with the WAC:

“For a cloud computing market intended to offer quantifiable financial value to customers, there are a few lessons to be drawn from this analysis. First, there must be some similarity between offers, or at least the ability to normalize for price comparison. Second, the workload must be conducive to provider switching. Either it must not have a large quantity of data, or, the data needs to be located in a cloud-neutral location such as a colocation facility offering services from multiple cloud service providers.  Third, prices must exhibit some volatility. Also, provider prices must be independent; they can’t all rise and fall in unison.  Interestingly, such a market need not be very large. Four providers will deliver 60% of the theoretical maximum cost reduction, and nine providers would deliver 80% of the expected cost reduction of an infinitely large market.”

I encourage you to check out the whole article. It’s a short article and well worth the read.

 

 

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