Cloud Computing as a Commodity
I've been in Austin the last couple days for a variety of meetings. What is interesting about my various meetings over the last couple days is that the topic of cloud computing as a commodity has been repeatedly brought up. Last week at the cloud interop forum a number of people also mentioned this concept. The concept on the surface is simple, but dig a little deeper it starts to get a lot more complex.
Generally the idea of a cloud exchange would be a central financial exchange where people / companies could trade standardized cloud capacity in the form of a futures contract; that is, a contract to buy specific quantities of a compute capacity in the form of a commodity at a specified price with delivery set at a specified time in the future. The contract details what cloud asset is to be bought or sold, and how, when, where and in what quantity it is to be delivered.
I'd like to pose the question. Is the time alright for us to start to thinking about the creation of a "Cloud Exchange" and if so, what are some other challenges we need to overcome? (General Compute Unit, Capacity interchange, Bandwidth, Quality, Auditability, fraud, etc.)
Feel free to pitch in your ideas, good, bad or indifferent.
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Generally the idea of a cloud exchange would be a central financial exchange where people / companies could trade standardized cloud capacity in the form of a futures contract; that is, a contract to buy specific quantities of a compute capacity in the form of a commodity at a specified price with delivery set at a specified time in the future. The contract details what cloud asset is to be bought or sold, and how, when, where and in what quantity it is to be delivered.
I'd like to pose the question. Is the time alright for us to start to thinking about the creation of a "Cloud Exchange" and if so, what are some other challenges we need to overcome? (General Compute Unit, Capacity interchange, Bandwidth, Quality, Auditability, fraud, etc.)
Feel free to pitch in your ideas, good, bad or indifferent.
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Labels: Cloud Computing, exchange
posted by enomaly
at
5:56 PM
4 Comments :
Companies like Bandex and Invisible Hand were trying to create spot markets for bandwidth in the past, although I am not sure what kind of success (or lack thereof) they realized.
-John
The thing about commodities markets is that the things they trade are equivalent. The trader does not know or need to know where their wheat or pork bellies came from, because there are standards to limit variation between suppliers. Cloud computing is practically the opposite of that. The APIs are all fundamentally different, the units of measurement are different, the resource types and levels are different, the SLAs are only the same because they don't exist.
When we can talk about purchasing X units of "Grade A" cloud computing, and everybody knows what that means without knowing who the vendor is, then cloud computing will be a commodity. I'm not sure we'll ever get there, or even that we should strive to. Commoditization is certainly bad for innovators and suppliers (just look at the margins on PC hardware), and its benefits for consumers (in a "race to the bottom" scenario such as the airline industry) are questionable. Commodization should IMO apply to the rawest of raw materials.
I wrote about something similar to this back in March and started doing some investigations. The point about having different API's and packages for systems is very very vadid. At this point I think we're going to be looking to Amazon, Microsoft, and Google to see how they setup their pricing. When that MS center comes online we might see a big shift in pricing.
John's comment about spot markets for bandwidth sent a shiver down my spine. It took me a little time to realize why. The last time I thought about bandwidth markets, the notion was being trumpeted by Enron. We all know how well that turned out.
--Matt
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