Enomaly this morning sent out a press release (and about a gazillion tweets huh Ruv?) telling the world about the launch of SpotCloud, a cloud computing clearinghouse & marketplace. So.. what’s it all about? From the release:
For cloud service providers, the SpotCloud Marketplace Platform provides an easy way to sell unused cloud capacity. Cloud providers can use SpotCloud to clear out unused capacity and sell computing inventory that would otherwise go unsold, enabling increased utilization and revenue, without undermining their standard pricing.
In order to avoid directly competing with regular retail sales of cloud services, SpotCloud uses an “opaque” sales model, similar to sites such as Hotwire.com. The SpotCloud service meters, tracks, and bills capacity buyers, and pays capacity sellers directly.
For Cloud Capacity buyers, SpotCloud bridges many disparate regional cloud providers, allowing buyers to find the best cloud providers at the best price. SpotCloud serves as the central place to discover and buy computing capacity, based on performance, cost and location parameters, through a simple and easy to use web dashboard and API.
All very nice, but is there a need for it?
Let’s take a step back and look at the drivers for a marketplace. If you accept my contention that services at the lower end of the stack are becoming utility like and commoditized – with the main driver being cost reductions, then a clearing house is a natural move – it allows cloud users to rid themselves of excess capacity and gives customers the ability to get service at a lower-than-normal cost.
Not everyone is so sure. George Reese, founder of enStratus a company that is in the “cloud governance” game, allowing companies to deploy, manage and audit their cloud infrastructure setup, was a little dismissive saying that:
I don’t think people want to say “give me a server at the lowest price for this amount a time”. They want to say, “Here’s my app, figure out the least costly infrastructure to support its requirements”
Personally, and it’s unlikely to make me popular with my infrastructure friends, I believe there is a need for a service such as SpotCloud. Infrastructure is, despite what many would contend, a relatively undifferentiated marketplace that, over time will continue to compete primarily on price – as such a service that allows excess capacity to both be driven down in price and, more importantly, utilized as close as possible to maximum, is a valid market offering.
I have to say I think we’re a little early for a service such as SpotCloud, I’m not sure the market is sufficiently mature to need it at this stage, my pick is that SpotCloud will have limited take up and will remain a little stagnant over the next year or two. Over time however the potential is significant.
Ben Kepes is an analyst, an entrepreneur, a commentator and a business adviser. His business interests include a diverse range of industries from manufacturing to property to technology. As a technology commentator he has a broad presence both in the traditional media and extensively online. Ben covers the convergance of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users. 
@benkepes I’m not arguing that there’s no need for SpotCloud, but it’s going to be a hard business model to sustain.
@benkepes The value add for brokerage is higher up the chain.
@GeorgeReese funny, I think brokerage is more valid lower down the chain….. Anyway, will be interesting…
@benkepes I just argue that it will be systems with a knowledge of application architecture and requirements doing the brokering.
@benkepes Hotwire and others like it work because of the complexity and lack of transparency in the travel industry.
@benkepes IaaS is highly simple pricing and very transparent
@GeorgeReese some would argue the same for electricity – but brokers exist in that space….
@benkepes @GeorgeReese: electricity works the way it does because of electrons – cloud infrastructure is a lot more complicated
@samj dude. You ever looked into the complexities of the electricity grid? Thought not, makes the cloud look like Lego…
@benkepes When I say lower down the stack, we are both saying that it is IaaS components that will be brokered.
@GeorgeReese gotcha
[...] This post was mentioned on Twitter by Ben Kepes, Ben Kepes and George Reese, Cloud Networking. Cloud Networking said: RT @benkepes: Is There a Need for a Cloud Spot Market? Enomaly Thinks So http://goo.gl/fb/GEKzB [...]
[...] Ben Kepes takes a different view: “Infrastructure is, despite what many would contend, a relatively undifferentiated marketplace that, over time will continue to compete primarily on price – as such a service that allows excess capacity to both be driven down in price and, more importantly, utilized as close as possible to maximum, is a valid market offering. [...]
[...] Ben Kepes takes a different view: "Infrastructure is, despite what many would contend, a relatively undifferentiated marketplace that, over time will continue to compete primarily on price – as such a service that allows excess capacity to both be driven down in price and, more importantly, utilized as close as possible to maximum, is a valid market offering." [...]
[...] Ben Kepes takes a different view: "Infrastructure is, despite what many would contend, a relatively undifferentiated marketplace that, over time will continue to compete primarily on price – as such a service that allows excess capacity to both be driven down in price and, more importantly, utilized as close as possible to maximum, is a valid market offering." [...]
[...] Is There a Need for a Cloud Spot Market? Enomaly Thinks So [...]
[...] for maximum profitability. Look to early efforts such as Amazon Web Services’ Spot Instances andEnomaly’s SpotCloud to show the way here and the Cloud Price Calculator to help you normalize costs. As cloud segments [...]
[...] for maximum profitability. Look to early efforts such as Amazon Web Services’ Spot Instances andEnomaly’s SpotCloud to show the way here and the Cloud Price Calculator to help you normalize costs. As cloud segments [...]
[...] for maximum profitability. Look to early efforts such as Amazon Web Services’ Spot Instances andEnomaly’s SpotCloud to show the way here and the Cloud Price Calculator to help you normalize costs. As cloud segments [...]
[...] Ben covers the convergance of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users. More on Ben. Read more on Enomaly [...]