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CME Group, 6fusion to explore IaaS exchange

CME Group, 6fusion to explore infrastructure as a service exchange

October 1, 2013 Written by Jonathan Brandon

CME Group and 6fusion are collaborating on an commodities exchange for IaaS resources

CME Group and 6fusion are collaborating on an commodities exchange for IaaS resources

CME Group, one of Europe’s largest derivatives exchanges has signed a non-binding letter of intent (LOI) with 6fusion, a company specialising the in the economic measurement and standardisation of IT infrastructure, to explore the development of an infrastructure as a service exchange.

Under the terms of the LOI the companies will develop an open marketplace for trading financial contracts based on a technology developed by 6fusion which standardises the measurement of computing resources.

The technology works by aggregating the underlying usage elements required to run applications (CPU, memory, storage, disk i/o speed, LAN i/o speed, WAN i/o speed), creating a benchmark that allows products to be compared in “like for like” fashion.

“6fusion’s Marketplace represents the foundation of how we intend to develop this market,” said Rob Bissett, executive vice president of product management at 6fusion.

“It is the global platform that serves up the core technologies to buyers and suppliers, and reconciles physical delivery of contracts traded on the electronic trading system to be provided by CME Group,” he added.

As part of the agreement CME Group will contribute its electronic trading platform, which tracks the fulfilment of contracts traded on the platform.

“6fusion has overcome the technical barriers to establishing compute as a tradeable commodity,” said John Cowan, CEO and co-founder of 6fusion.  “Working with the world’s leading and most diverse derivatives exchange, we are setting a course to develop a robust spot and over-the-counter (OTC) derivatives market for cloud computing based on 6fusion’s innovation.”

Cowan said that creating a ‘common language’ for IT resourcing and an open marketplace will enable buyers to better mitigate risk  while at the same time opening up access to new routes to market for cloud operators.

Cloud service brokerage seems to be an increasingly attractive prospect, particularly for players used to managing a high volume of transactions – like exchanges. The move is similar to plans recently announced by Zimory and Deutsche Börse to develop a vendor neutral marketplace for cloud services, the Deutsche Börse Cloud Exchange, which is expected to go live in 2014.

But given the nascent nature of cloud computing and the diversity of technologies and end user requirements the prospect of standardising resources is very challenging.

William Fellows, vice president of cloudscape at 451 Research says that the normalisation of supply and demand using 6fusion’s technology is a big piece of the puzzle here, and when combined with CME’s trading platform has the potential to “seriously disrupt” the market.

“An IaaS exchange could unlock enormous potential for buyers, sellers, and brokers,” he added.

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