Is There a Need for a Cloud Spot Market? Enomaly Thinks So

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.

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