Recently brokerdealer.nl reported on the emergence of Cloud exchanges, places where cloud computing power can be traded. The ability to trade computing resources are the next step towards computing power becoming a utility. We had a look at Deutsche Boerse Cloud Exchange (DBCE).
What DBCE is
The DBCE is a marketplace where users and suppliers of cloud computing resources are brought together. DBCE provides a full stack of functionality providing admission, trading, and settlement. The system provides management, billing, monitoring and SLA management.
Just like with other marketplaces suppliers show the capabilities, capacities, and prices. Users buy these resources directly from the supplier, while deployment will always happen via DBCE, this is part of the settlement process.
The platform allows users to set up and provision including customer specific software installation and configuration. For suppliers a similar system is available for making resources available. The platform allows for automatic pricing and automatic least cost selection.
The computing resources can be bought using contracts that specify the size of the resource and the delivery time. Sizes come in units comparable to T-shirts they labeled like "standard XS" to "Standard XL". Special sizes are available for users who are more storage hungry than CPU hungry. Other contract parameters include Operating system and governing Region. The later goes beyond where the hardware is located, but also addresses other legal aspects such as where entities are registered. Validating the governing region is part of the admission process for suppliers and includes auditing. The "pay as you go" contracts are open ended and allow the supplier to get out of with a 30 day notice on resources in use, a blunt, but very practical approach that works well in the real world..
What it brings
DBCE has succeeded in building a vendor neutral marketplace where suppliers of cloud computing resources and users can find each other. The model caters for various real use cases, for example DBCE tells us CERN uses DBCE to purchase cloud resources.
The platform is fairly mature and offers some nice features, for example the platform is built in such a way that if a user runs out of resources on one contract, or if a contract has expired, capacity from other valid contracts will be deployed.
The services that are offered use the current technology and to keep DBCE relevant they will need to continuously stay in touch with the market, offering an evolving landscape of operating systems, deployment tools and methods and evolving resource specifications. Right now they will have to follow trends, if DBCE, and exchanges like it, grow that requirement may be turned around where the new tool/trend/method will have to be accepted by the exchanges to be successful.
Where to go from here
The model provided by DBCE works well in today’s world. It allows for choice where lock-in was the norm. This does not yet provide a marketplace where resources are bought and sold continuously like we see in for example energy. For this to happen the cloud industry will have to be united and organizations will have to take on the role of the TSO (‘grid operator’) in energy. This future model will have to address regional challenges both regarding latency and legal challenges. It will have to enforce standards settlement, and delivery in a way similar to a TSO. It is likely that for this to happen the EU or some other governing body needs to promote an effort. And it will take time, and any governing body will take it’s time. A (distant) future where computing resources are a utility does look promising, the question will be if a standardized product will have enough demand for this to happen. I think it will.
I also think somewhere along the way financially settled contracts will emerge that will be traded by actual users and suppliers but also funds, banks, retail, and prop firms.