ZDNet – Soon, cloud capacity will be available in a spot market

ZDNet – Soon, cloud capacity will be available in a spot market

Soon, cloud capacity will be available in a spot market

By  for Service Oriented |

In a few months, it may be possible to buy cloud infrastructure capacity on an open market, just as energy or physical commodities are now traded. The net result, hopefully, will be competitive pricing and lower risk for the burgeoning cloud-computing sector.

Data Center at CERN-photo courtesy of CERN Press Office
Photo: CERN Office of Media Relations

6fusion, a cloud ROI tools vendor, and CME Group, a global derivatives marketplace, just announced they have signed a definitive agreement to develop and market an Infrastructure as a Service (IaaS) spot exchange that will list financial products based upon 6fusion’s Workload Allocation Cube (WAC) .

The WAC provides a consistent, across-the-board unit of measurement by which companies can buy and sell IaaS cycles. The Infrastructure-as-a-Service (IaaS) Exchange will offer access to the underlying components of cloud computing: processing power, storage, networks, and systems messaging. The IaaS exchange is expected to be available in beta by the second half of 2014, according to 6fusion.

This type of market could keep the pressure on cloud providers to keep prices in line. (Fierce competition has already created a price war between the big cloud players.) In addition, there may be opportunities for enterprises with large-scale IT assets. Many organizations have excess computing capacity within their own data centers, and this could open the door to assigning real economic value to their systems. Huge investments in under-utilized systems that is only used a few times a year may be recouped if excess capacity could be sold off to such a spot market.

The spot exchange will feature contracts using the WAC as the standard unit of measurement and be available for trading on an electronic platform using technology licensed from CME Group. 6fusion’s UC6 software platform will be used to track fulfillment of physically delivered contracts traded on the spot exchange. The spot exchange beta is expected to launch later this year featuring a host of infrastructure buyers, sellers and partners.

Such an exchange is in line with the way energy is now valued and priced, Reuven Cohen, chief cloud advocate at Citrix, observed in a Forbes commentary. “Data centers are the new power plants,” he says. And, just as is the case with energy resources, such exchanges help reduce the risk in investing in new capacity.  He also adds that Amazon Web Services already has a spot-pricing capability that fluctuates with supply and demand.

Network World’s Brandon Butler provides a look at how such an exchange will work:

“Blocks of cloud computing resources – for example a month’s worth of virtual machines, or a year’s worth of cloud storage – would be packaged by service providers and sold on a market. In the exchange, investors and traders could buy up these blocks and resell them to end users, or other investors, potentially turning a profit if the value of the resource increases. The market for these resources would ebb and flow, just like with any other commodity, based on supply and demand. Perhaps around the holiday shopping season, or directly after a natural disaster, these blocks of cloud resources would be more valuable, for example.”

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