Commoditisation of cloud infrastructure
The trend towards standardisation in the cloud IaaS market means it’s becoming possible to commoditise cloud infrastructure and trade it like any other commodity. One of the world’s leading stock exchange organisations, Deutsche Börse Group, is now applying its expertise to the cloud IaaS market by creating Deutsche Börse Cloud Exchange.
In this post I talk to Christof Bock, Business Analyst at Deutsche Börse Cloud Exchange, about the new way of trading cloud resources.
JF van der Zwet: Let me start by asking, what are the main aims of the exchange?
Christof Bock: Primarily we want to enable efficient trading of cloud resources between organisations that need additional storage and computing, and cloud providers that have available capacity. By acting as a spot market, the exchange will help boost cloud adoption in Europe.
JFZ: Why would a company choose to buy capacity from an exchange?
CB: A neutral exchange increases transparency and makes it easier for buyers to compare different providers’ offers and pricing.
JFZ: How does DB Cloud Exchange work from a buyer’s perspective?
CB: Organisations that want to buy cloud capacity can configure their requirements with a high degree of precision. For example, a buyer may have a memory-intensive workload that requires less in the way of storage. Buyers express their requirements using the exchange’s three asset classes — compute (or performance unit), memory and storage. The exchange then auto-matches the request to what’s available, enabling the buyer to compare various offers in real time and choose the one that represents the best value.
JFZ: Suppose an organisation knows it will need extra capacity in a few months’ time — perhaps to crunch a lot of data as part of research project. Can capacity be booked ahead?
CB: Yes, buyers can hedge to secure capacity for anticipated needs at a pre-agreed price. They may of course be able to negotiate a more attractive price than if they wait until nearer the time.
JFZ: It sounds as though the exchange gives buyers plenty of choice and helps them avoid vendor lock-in. But if an organisation buys capacity from several different providers, how will they manage all those resources?
CB: DB Cloud Exchange provides a management interface that helps to simplify the orchestration of resources from different providers.
JFZ: Thinking about it from a cloud provider’s point of view, what are the advantages of trading on the exchange?
CB: Joining DB Cloud Exchange opens a new channel to market, giving cloud providers a smart way to display their offer and manage their pricing, and helping them convert their IT assets into profit centres. It also gives them a clearer picture of what buyers are looking for and the various workloads they want to run in the cloud, which could help them develop their services in the future.
JFZ: How do contracts work?
CB: Contracts can vary in length from one day to open ended, and can be established within minutes, giving buyers rapid access to capacity. We provide the contracting framework, and give cloud providers tools for managing different contract types, including those for future timeframes. A provider can easily see how much capacity has been sold for the coming year or other period, and adjust its offers according to market demand.
JFZ: It sounds as though there’s quite a reduction in administration, which could be a boon for smaller providers and new market entrants in particular.
CB: Yes, absolutely. In addition to providing the contracting framework, the exchange also takes responsibility for processing billing and payments.
JFZ: What about the governance framework?
CB: Any organisation that wants to trade must register first. This gives buyers the confidence that cloud providers will deliver the services they offer; and reassures providers that buyers can afford to pay for the services they consume.
JFZ: When will the exchange be open for business?
CB: The exchange is currently in beta, and we’re still accepting applicants — our website gives details.
JFZ: Why should a company consider joining the beta?
CB: As well as helping to build up liquidity on the exchange through trading, beta participants have the opportunity to influence the additional features that will be developed.
ABOUT DEUTSCHE BÖRSE CLOUD EXCHANGE
Deutsche Börse Cloud Exchange (DBCE) is a vendor-neutral marketplace for cloud resources. It is part of Deutsche Börse Group, one of the world’s leading exchange organisations, and was founded in May 2013. In a predominantly proprietary and vendor-driven cloud market, the DBCE marketplace helps to redress the balance between supply and demand. It also makes resource trading more efficient, delivering utmost flexibility to all stakeholders and thereby enabling providers (sell side) and consumers (buy side) to derive maximum value from its services.