Can SpotCloud Gain Traction?

Enomaly Inc., the private cloud player based in Canada, today announced a new clearinghouse cum marketplace for trading excess cloud capacity. It is called SpotCloud and the idea is to create a central platform from where excess cloud capacity can be sold and bought based on location, cost and quality.

SpotCloud acts as an intermediary between service providers and enterprises wanting to sell their excess capacity and those who want to buy them. For example, an enterprise with seasonal business may have lots of unused capacity during off-peak times. They can shed the excess fat in the marketplace at a lower rate. Those buyers who are looking for short term capacity can pick it up for a price lower than getting it directly from public cloud providers. The idea is to form a platform that could help cut waste in the compute infrastructure business.

This is not something new or trailblazing. In fact, Zimory attempted this sometime back and they didn’t get much of a traction. Part of the reason could be that Zimory was too early in the market and, now, the cloud ecosystem is much more vibrant than a year or so back. Even though I showed lot of enthusiasm when Zimory offered a similar service, I am little less enthusiastic now. Partly, I have seen the resistance from the enterprise customers to put their data outside of their firewall. In fact, if they could open up to trust another enterprise provider, they can as well trust a neutral third party public cloud provider who can even offer a much better SLA without going through an intermediary. Even though I like the idea of SpotCloud, I don’t see much of an opportunity in the enterprise cloud market at present.

However, we cannot dismiss the idea so fast. Even though it will be very difficult to gain traction among the enterprises, there is still an opening for SpotCloud or similar exchanges. Regular visitors of this blog know how much I promote the idea of an open federated cloud ecosystem. Slowly, but steadily, we are seeing such an ecosystem coming up due to the efforts of open source vendors like Cloud.com and open source projects like OpenStack. Korean Telecom and Tata Communications have set up public cloud offerings targeting not just their local markets but also global markets. Once such an open federated ecosystem crosses the threshold for successful adoption, there will be a strong demand for services like SpotCloud, Zimory, etc..

Even though I don’t expect a surge in the demand for services like SpotCloud right away, I do see a future for them. It all depends on how well they execute it. From the SpotCloud website, I notice that they just facilitate a transaction between the buyer and a seller without playing any role in regulating it. Technically, it is an exchange of services than a clearinghouse per se. If they can add some additional value with regards to SLA, interoperability, etc., there is a much better chance for success. Let us see how it turns out. Reuven Cohen, CTO of Enomaly, is known for starting many interesting initiatives but many of these projects had fallen off after the initial euphoria. We will have to wait and see if this goes beyond the initial press and social media soundbites. If it does, it will be interesting to closely track the adoption because it has the potential to alter the dynamics of an open federated cloud marketplace.