Cloud Economics 2.0: German Stock Exchange starts cloud computing exchange

Summary: We are entering the second wave of cloud computing: The Public Cloud Economics. Forrester Research’s Stefan Ried looks at how Deutsche Börse has accelerated loud economics to the public level.

Most enterprises understand cloud topologies (virtualization) and privacy levels (private, virtual-private, and public), as well as the different resource types (IaaS, PaaS, or SaaS). Some enterprises embrace relatively  sophisticated technologies like cloud bursting – the dynamic relocation of workloads.

However, when it comes to current and future economic models of cloud computing, understanding lags behind.

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 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 save up to 60 percent. The risk is that you will buy more than you need or that you will buy the wrong instance types. The marketplace does allow you  to sell off these half-used contracts to other customers.

The variety of multiple global cloud providers, local players, and even private cloud capacity, combined with different contract types such as the Amazon on-demand and reserved instance, have all stimulated the economic model of a cloud broker. 

While only very few large corporate IT divisions managed to establish a cloud broker style engagement model with their lines of business, quite a few enterprises or government agencies already use external cloud brokers. This external service maps dynamically the demand to dynamic sourcing options. For example, the state of Texas is using the cloud broker Gravitant.com across many state agencies.

But, 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 — until now.

This week’s announcement of the German Stock Exchange, Deutsche Börse, accelerated the cloud economics to the public level. They announced a plan to operationalize by Q1 2014 a public trading platform for infrastructure as service resources. The service focuseson 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 certain customers such as workload classification, compliance requirements and even temporary on-premise spare capacity – the Deutsche Börse Cloud Exchange (DBCE) focuses more on the trading similar to other resource trading marketplace services such as the electricity exchange or physical raw materials. It’s therefore more of a sourcing channel for cloud brokers than a cloud broker on its own.

As I have followed 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,  Deutsche Börse is just entering a steep learning curve and will most likely realize the following limitations or challenges: