Will cloud computing capacity soon be traded like pork bellies? That's the intriguing possibility raised by this week's news that Deutsche Börse will launch a "cloud exchange," a trading venue for outsourced storage and computing capacity that will launch early next year.
Cloud Exchange AG is a joint venture formed with Berlin-based Zimory to create a neutral, secure and transaparent trading venue for cloud resources. The exchange is based on the belief that the underlying, bare bones compute is becoming a commodity like wheat or oil. CPU, RAM and storage will be bought and sold in a liquid market.
This isn't the first attempt to create a market for cloud capacity. The notion of a commodity-style exchange for cloud capacity emerged in 2010, shortly after Amazon Web Services began offering spot pricing for cloud instances. SpotCloud was created in by Enomaly in 2011 to pursue this vision, and was later acquired by Virtustream.
High Finance Meets Cloudy Markets
The entry of a financial exchange into the cloud computing market takes the concept to the next level, potentially bringing new levels of sophistication.
“With its great expertise in operating markets, Deutsche Börse is making it possible for the first time to standardize and trade fully electronically IT capacity in the same way as securities, energy and commodities,” said Michael Osterloh, Member of the Board of Deutsche Börse Cloud Exchange.
An exchange along the lines of what Deutsche Börse is planning could work really well with customers who desire presences in multiple jurisdictions. European companies in particular will see value in such an exchange, as they need capacity within a particular jurisdiction to serve a particular region (e.g. German compute to serve a German clientele).
By creating a liquid market to trade compute and storage on one of the leading financial exchanges, participants can easily buy capacity for ad-hoc needs, while suppliers can sell capacity directly, or trade it among themselves. Cloud customers who don’t have capacity in a specific location can purchase it there.
The primary users for the new trading venue will be companies, public sector agencies and also organizations such as research institutes that need additional storage and computing resources, or have excess capacity that they want to offer on the market.
Global, Vendor-Neutral Market Envisioned
The marketplace will be international and vendor-neutral. Deutsche Börse Cloud Exchange will set and monitor standards regarding the product offering, admission procedure, and changes of providers and guaranteed purchased capacity. Clients will be able to choose capacity providers freely, as well as select the jurisdiction that will apply to the outsourced data. The product offering will initially include outsourced storage capacity and computing power.
Product standards and technical provision will be developed in close cooperation with potential marketplace participants and related parties. These parties include representatives from the traditional IT environment, national and international SMEs, and large corporations from a wide range of industries, such as CloudSigma, Devoteam, Equinix, Host Europe, Leibniz- Rechenzentrum, PROFI AG, T-Systems and TÜV-Rheinland.
“Participating in Deutsche Börse’s vendor-neutral platform for IaaS cloud computing products was a no-brainer,” said Robert Jenkins, CEO of CloudSigma. “CloudSigma was founded on the idea that computing power should become ubiquitous, convenient and shaped by user requirements. Trading compute on one of the leading financial exchanges is really a great market validation of what we’ve already been working toward and will help to further drive innovation in computing.”
"The cloud marketplace of Deutsche Börse offers companies a further choice to purchase top secure and tested cloud-services from T-Systems,"said Frank Strecker, responsible for the cloud business of T-Systems. "Due to the high level of standardization this will all be done with great speed and efficiency and with up-to-date prices."