01 November 2010

Enomaly's SpotCloud and 'The Case Against Commodity Cloud Exchanges' (Redux)

I wouldn't have bothered commenting on Enomaly's launch of the SpotCloud "private beta" today as I've been busy and neglecting my blog of late, but their Founder and CTO, Reuven Cohen, recently wrote an insightful critique of their competitor in this space, Zimory, which just needed a quick find and replace to be largely applicable here. See for yourself:

ElasticVapor: The Case Against Commodity Cloud Exchanges

The concept of a commodity cloud exchange is something that I've been talking about for several years. Notably Sun Microsystems also proposed it back in 2005. Recently a new start-up spun out out of Deutsche Telekom called ZimoryEnomaly is attempting to use this as the nexus of their enterprise focused hybrid cloud platform. The company describes itself as the first 'global marketplace for cloud resourcescloud computing clearinghouse and marketplace' to enable organizations to buy or sell extra computing capacity.

For those of you unfamiliar with the concept of a cloud exchange, the concept is to provide a central financially focused exchange where companies are able to trade standardized cloud capacity in the form of a futures contract; that is, a contract to buy specific quantities of a compute / storage / bandwidth 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, similar to a bandwidth exchange or clearing house. The exchange may be public or private akin to private exchanges / ECNs on the stock market, where membership is by invitation only

As I dug a little deeper into the Zimory'sEnomaly's SpotCloud web interface I noticed that ZimoryEnomaly SpotCloud is actually not really a marketplace so much as a multi-cloud management platform. The platform does little to address security, audibility, accountability, or trading/futures contracts. My first question is why should I trust their cloud providers and how do I know they're secure?

Another problem with the platform is their approach to capacity access. It appears that you are forced to use their platform, a platform that has no API or web services that I could see. Also their approach to a SLA is not very obvious, they broadly describe three levels, Bronze, Silver and Gold with no insight into what these levels actually represent. We are too just take them at their word.

Upon closer examination of the ZimoryEnomaly SpotCloud platform it appears to be nothing more than an open source hybrid cloud computing platform with an "ebay" marketing spin. So lets for a moment assume that a Commodity Cloud Exchange is a service that businesses actually want. (I'm not convinced they do) If this is the case, is a random start-up such as ZimoryEnomaly really in a position to offer such a service? And if so, should this exchange look like ebay or should it look more like a traditional commodities exchange? My opinion is the latter. What worries me about such a cloud exchange is the first thought that comes to mind is Enron, who attempted a similar bandwidth focused offering in the late 90's.

If we truly want to enable a cloud computing exchange / marketplace, maybe a better choice would be to build upon an existing exchange platform with a proven history. A platform with an existing level of trust, governance as well as compliance such as the Chicago Mercantile Exchange's Globex electronic trading platform or even the NasDaq.

Creating a cloud exchange has less to do with the technology and more to do with the concept of trust and accountability. If I'm going to buy XX amount of regional capacity for my Christmas rush I want to rest assured that the capacity will be actually available. And more importantly at a quality of service and location that I've agreed upon. I also need to be assured that the exchange is financially stable and will remain in business for the foreseeable future. All of which ZimoryEnomaly's SpotCloud doesn't offer.

Trust and security aside, To make ZimoryEnomaly SpotCloud attractive, they need to enable a marketplace that allows its users to buy additional capacity based on economic / costing factors that matter. For example being able to define a daily budget for your app, similar to the way AdWords spending works. There needs to be a fine-grained control over this budget so you can apply it across CPU, network bandwidth, disk storage, location with a focus on future requirements (futures). I should be able to trade / swap any unused capacity as easily as I originally bought it. There needs to be provider quota system that allows for the assurance that a certain amount of cloud capacity is always available to the "exchange" with a priority level. There should be multiple types of trading contracts as well as an indepth audit trail with a clear level of transparency within the entire trading process.

At the end of the day, I'm not convinced we're ready for "standardized" cloud exchanges. The cloud computing industry is still emerging, there are no agreed upon standards for how we as an industry can collaborate as partners yet alone trade capacity. In a lot of ways I feel ZimoryEnomaly is putting the cart before the horse and is probably 5-10 years too early.


  1. Amazing! I felt the same way reading the news this morning, I swore that I read it from Ruv b4, and sure enough...he's up to it again..I guess in this business there are the ones that will do anything.

  2. As I understood it, it's Enomaly's ISP's who will be involved in the commodity exchange? (in various countries) Not sure what the problem is to be honest? Sounds like a good idea.

  3. Hmm, on another note just had a baby boy. Send me an email matthew.wilson-vogler at hp.com

  4. Sam
    I can't help by agree with your thoughts. One difference was I thought it was more like PriceLine than eBay. Priceline sells excess capacity and eBay is a garage sale to a large extent.

    In fact, I had a chance to talk to @ruv at CloudExpo and he was least bit interested in sharing any details - despite sitting there with a booth for SpotCloud. I thought the purpose of setting up a booth is to share information about your offering. But he apparently like tweeting or replying to his email on iPhone more.

    I personally think this whole SpotCloud thing is absurd, considering we are just in the first inning of Cloud Computing where people still are apprehensive about Cloud. In a public cloud, the capacity is elastic so there is nothing to trade, you procure as much as you consume. In a private cloud, the reason for its being is that they do not want to share. So really don't know the objective. I started asking these very questions to Ruv and he seemed disinterested in answering them.

    To me it seems like some imaginary thing at this point unless he convinces me of the use case.
    I tweeted about it under @prudentcloud hoping I would get some response - I did not.

  5. I'm still new on this subject and I'm hoping to learn more about cloud exchange. Currently I'm studying on how to work things around binary options trading. Any suggestions on this?


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