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Posted by Stefan Ried on July 2, 2013
We are entering the second wave of cloud computing: The Public Cloud Economics
Most enterprises understand well cloud topologies (virtualization) and privacy levels (private, virtual-private, and public), or simply the different resource types (IaaS, PaaS, or SaaS). Some even embraced pretty sophisticated technologies like cloud bursting – the dynamic relocation of workloads. However, compared to this sophisticated understanding of technology, the understanding the current or even future economic models of cloud computing lags behind.
More than a year ago, Forrester introduced the corporate perspective of cloud economics with James Staten’s report Drive Savings And Profits With Cloud Economics. The major cloud providers surprised us also with many innovative business models, such as Amazon’s AWS Reserved Instance Marketplace last September. As an alternative to the fully flexible on-demand model, customers can also buy a one- or three-year contract for a compute instance and could save up to 60%. However, the risk is that you bought more than you need or simply the wrong instance types. The marketplace allows now selling off these half used contracts to other customers.
The variety of multiple different global cloud provider, local player, and even private cloud capacity, combined with different contract types such as the Amazon on-demand and reserved instance, stimulated the economic model of a cloud broker. See my reports about the cloud broker business model or the transformation process in larger enterprises.
While only very few large scape corporate IT divisions managed to establish a cloud broker style engagement model with their lines of business, quite some enterprises or government agencies use already external cloud brokers. This external service maps dynamically the demand to dynamic sourcing options. The state of Texas is for example using the cloud broker Gravitant.com across many state agencies.
With all the beauty of these new cloud economics, the perspective was still limited on the corporate resources or the selected resources of a specific cloud broker.
But, this week’s announcement of the German Stock Exchange, Deutsche Börse, accelerated the cloud economics to the public level. They announced the plan to operationalize by Q1 2014 a public trading platform for infrastructure as service resources. The service focuses at the selling by cloud providers and buying by large enterprises or intermediates such as cloud brokers. While a cloud broker needs to understand many details of the certain customers such as workload classification, compliance requirements and even temporary on-premise spare capacity - the Deutsche Börse Cloud Exchange (DBCE) focus more on the trading similar to other resource trading marketplace services such as the electricity exchange or physical raw materials. It’s therefore more a sourcing channel for cloud brokers than a cloud broker on its own.
As I follow the space of cloud broker, cloud economics and cloud business models in general quite for some years now, let me allow two comments:
First of all, I’d like to congratulate the team at Deutsche Börse. Offering a public trading of cloud resources is really a courageous and bold move! It pushes the discussion of cloud economics to the level of public trading of long term capacity, spot capacity or even futures.
Secondly – and less enthusiastic – Deutsche Börse is just entering a steep learning curve and will most like realize the following limitations or challenges:
Please leave a comment if you find the new offering by Deutsche Börse interesting.
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