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Will cloud services be traded just like stocks and bonds one day?

Brandon Butler | Oct. 10, 2013
Several companies are exploring the idea of trading cloud services on a commodities future exchange market, and the idea is gaining credence

For end users, there can be benefits as well. Namely, when providers compete in a marketplace, prices could come down. It would be a central location for end users to compare and contrast options from multiple vendors. Almost like a farmer's market for cloud computing resources, says Rob Bissett, senior vice president of product for 6Fusion, the North Carolina company pushing the idea that recently signed with the CME Group.  

Perhaps the real winners are the investors though. Turning cloud resources into a commodity exchange introduces a whole new set of actors, such as investors and traders into the mix. To them, the cloud is just one more commodity for them to trade like a stock, bond or grain.

Backers of the proposition at 6Fusion say that a couple of dominoes need to fall before their plan can really take off. One key, Bissett says, is to have a common trading metric a way to compare resources from multiple providers in an apples-to-apple fashion to ensure one commodity is equal to another. To that end, 6Fusion has created the Workload Allocation Cube, or WAC, which takes into account CPU, storage and input/output speeds to create a common metric that is applicable across multiple providers. By having a common trading unit, buyers and sellers can be on the same page. 6Fusion already allows customers to use the WAC to measure their consumption of cloud resources across multiple providers. Eventually, 6Fusion wants to trade those WACs on the CME's futures exchange market.

6Fusion isn't alone in pursuing this idea. European company Deutsche Borse, which operates the Frankfurt Stock Exchange, has proposed an exchange that is based on software from a company named Zimory, which would manage some of the technical hurdles this idea faces. Zimory has a connector that produces a secure pipeline between end users and various cloud providers' services that are traded on the exchange. It would allow end users to get cloud resources from one provider on an exchange, then potentially switch to another provider based on price, performance or other metrics.

The 6Fusion folks say they're just buying and selling their WACs, they're not in the business of actually delivering the resources to end users; third party consultants and systems integrators can do that.

Cloud provider Virtustream purchased the company SpotCloud in 2010, which was set up by Reuven Cohen who now works for Citrix on its cloud operations as a marketplace where users could compare offerings from multiple providers. Virtustream is still developing that product. Cohen says the cloud is a natural fit for being traded on an exchange though. "The cloud market is one with a lot of fluctuations," Cohen says. "There's unused, excess capacity, and a dynamic market, which are key characteristics for an exchange."


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