IaaS – a commodity CME seeking to trade with 6fusion’s help
IaaS – a commodity CME seeking to trade with 6fusion’s help
451 Research published a report on the CME Group’s plans for building a commodity exchange to trade cloud IaaS computing resources. 451 provides a good summary through a SWOT analysis in the report:
SWOT Analysis
Strengths |
Weaknesses |
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| 6fusion’s metering capability and existing retail marketplace together with CME’s experience is a strong combination. The ability to use any technology to manage workloads between providers abstracts the virtual machine from the contract, thereby reaching a greater addressable market. | A simple spot-market focus has limited experience for broker-dealers; most intermediaries would prefer access to a range of instruments with which they can find novel ways to generate profits. If this particular exchange doesn’t work, we don’t expect it to end CME’s quest to trade IaaS. | |
Opportunities |
Threats |
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| As enterprise adoption grows, consumers are looking for new ways of saving money; broker-dealers interacting with a market provide such an opportunity. Service providers are also increasingly looking to use third-party services to deliver value-added capabilities. Cloud brokers and integrators will use exchanges as another sourcing channel. | Reliance on resellers – for success, the exchange requires many participants. Are buyers ready to use a third party to purchase cloud resources, and are sellers ready to risk margin (and their product differentiation) to an exchange? Broker-dealers are in a chicken-and-egg situation – do they get involved from day one and bring the liquidity to implement a derivatives market, or do they wait until the derivatives market has arrived before taking the opportunity seriously. |
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