IaaS cloud computing exchange could clear the path to true multi-cloud

Imagine a world where you trade IaaS resources in a stock-market setting, full of options to suit your enterprise. It's closer than you'd imagine.

The cutting-edge idea of trading IaaS resources in a stock market-type setting holds revolutionary promise for cloud vendors and users worldwide. Numerous investments and movements strive to establish standards and systems to enhance the commoditization of IT, in general, as well as facilitate the accessibility of IT resources, in particular. A cloud computing exchange of this caliber would greatly enhance cloud consumers' choices, and help the market evolve toward true, multi-cloud architectures.

The offering that most resembles a cloud exchange is Amazon Web Services' (AWS) Spot Market. Spot instances can save AWS infrastructure consumers significant amounts of money, and obtaining resources is as easy as placing a bid above the current market price. Companies looking to maintain disaster recovery plans and high availability are ideal customers of spot instances, which are based on each availability zone's spare capacity.

While the possibility of "trading" within AWS cloud is an option in the form of exchanging various resources as a means to optimize costs, the true notion of trading occurs among multiple vendors by placing bids, encouraging competition and following the concept of letting "the best man win." Significant challenges do still exist, including a real, modern, automated and transparent commodity-based market exchange.

The table below summarizes a number of the core issues and challenges standing in the way of true cloud commoditization.

Problem Current State Required State Latest Developments

Regulatory

 

 

National regulatory

environments concerning data, privacy, and IT in general

More uniform regulations and standardized at a broader, regional or global level meant to define, measure and benchmark cloud services The European Commission's SIENA Roadmap on Distributed Computing Infrastructure

Standards

 

 

Some standardizations at the cloud service provider, regulatory and academic levels

Established and enforced standardizations

that allow lower barriers of entry to new cloud providers while enabling consumers with more flexibility and choices

IEEE P2302 and NIST have begun defining cloud computing in common terms and setting standards, and they are developing standard methodologies for cloud-to-cloud interworking

Common metrics

 

 

Difficult to measure and compare cloud providers Common units across all components of the industry will enable easier understanding and comparisons

Companies such as 6fusion

define common units for consumers and suppliers to "speak the same language"

Cloud interoperability

 

 

Limited to IaaS primarily; not part of the strategy of the leading cloud providers

Definition of standards and common best practices for next-generation clouds, which are more interchangeable, yet

utilize the same architecture

Examples: Distributed management task force;

Cloud infrastructure

management interface

Cloud negotiation

 

 

Mostly manual processes used by

cloud brokers to tailor

solutions for end users

Cloud agents suit customer

requirements to supplier

capabilities

The open source community

supports federated cloud; IEEE

formed The Cloud Computing

Initiative to test standards in

real-world conditions

Vendor licensing and legal

 

Some vendor licenses are cloud-ready, and some are

portable from physical to virtual cloud environments

License mobility is key to enable

current customers the ability to move from physical to virtual environment

Business Process as a Service developments and

stakeholders drive adoption here

On the path to a true cloud exchange

Because of these issues, ultimately, a cloud exchange is still a work in progress. But, on the path to a true cloud exchange are evolving platforms, such as ComputeNext, which aims to create a brokerage among clouds. These platforms contain marketplaces for cloud service layers, including infrastructure, platforms and software.

Additionally, systems and platforms have been established to aid in the decision-making process for capacity purchases on both the consumer and system integrator level. For example, 6fusion strives to standardize the economic measurement of IT infrastructure and quantify supply and demand for compute resources across heterogeneous public and private cloud environments.

Several companies and fascinating initiatives have begun working toward building products that will serve a cloud exchange market. For instance, 6fusion works with the Chicago Mercantile Exchange to develop a next-generation trading derivative product for cloud services.

In the European market, Deutsche Borse teamed up with veteran IT integrator Zimory to launch cloud exchange services in Europe.

As for cloud brokerage services, pioneers like Strategic Blue (Cloud Options) focus on the financial side of compute resources trading. Furthermore, standardization entities such as IEEE, as well as regulatory bodies like the European Commission and various other leading academic and governmental projects are currently exploring the requirements and processes necessary to define standards and enable homogeneity among the various platforms.

From the application developer side, a delineation between the application stack and the underlying infrastructure must exist in order to move back and forth between platforms, making the most of the values at hand.

Cloud exchange is on the horizon, but from the looks of things, it will take time. The current reality reflects large enterprises' and IT consumers' efforts to adopt a single cloud. The vendors, on the other side of the spectrum, are constantly working toward creating a robust platform that will attend to consumers' current and future needs. The current leader in the cloud is Amazon, pretty much holding the entire market, alone. In terms of cloud exchange, however, multiple vendors have to step up to manifest the type of competitive environment necessary for consumer choice. With Google, Microsoft and private cloud platforms, such as OpenStack, cloud exchange is the next generation of an already evolving multi-cloud environment.

(Author's note: Thanks to Amir Peled, founder of Clouds XC in Switzerland, who helped with analyzing the feasibility of the concept via an in-depth analysis of the current state of the market.)

About the author

Ofir Nachmani is a business technology advisor, blogger and lecturer. Ofir’s extensive experience in the world of business technology has made his critically acclaimed blog, IamOnDemand.com, the go-to guide for modern technology startups and developers in the world of cloud computing. Today he advises organizations, leading them through new IT market modifications, while building and executing a modern go-to-market strategy

This was first published in March 2014

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