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SpotCloud: Federation unites cloud services broker's marketplace

In part one of this three-part series on cloud federation, network services expert Rebecca Wetzel discusses cloud services broker Enomaly and its marketplace, SpotCloud.

Editor's note: In part one of this three-part tip series on the evolution of cloud federation, network services expert Rebecca Wetzel discusses cloud services broker Enomaly and its marketplace business model, SpotCloud. 

Describing itself as a "cloud-capacity clearinghouse," SpotCloud entered the cloud federation market in 2010 as a brokerage service enabling Infrastructure as a Service (IaaS) providers to federate their resources and sell excess computing capacity to buyers seeking regional cloud providers for batch jobs. The marketplace is sponsored by Enomaly, a cloud platform vendor, which cloud software and service provider Virtustream acquired in 2011.

SpotCloud's model matches supply with demand, enabling providers to adjust their prices based on demand. But in terms of adoption, SpotCloud hasn't caught on as quickly as its backers originally envisioned.

Reuven Cohen -- Enomaly's founder and now Virtustream's senior vice president of cloud community -- maintained that "the emergence of a federated cloud ecosystem is inevitable," but acknowledged it remains unclear when adoption will gain traction.

Read the rest of this expert tip series

Three paths to the federated cloud: Which is right for you?

OnApp: With federated cloud, CDN services possible for providers

Tier 3: Cloud federation enables providers to expand service footprint

"We received attention for being at the forefront of a market trend, but we are not where I thought we'd be by now," Cohen said. "The need for a public market to provide equilibrium between buyers and sellers proved less than expected. But we did find an unexpected private market need -- for large companies, governments and universities to share capacity for private, not public, consumption. That was our epiphany."

The University of California, for example, needed to use its resources more efficiently in light of budget constraints. It hadn't found a way to effectively share computing capacity among its 38 campuses, leaving each to operate in a silo. It tapped SpotCloud to help its systems share capacity by using the cloud services broker's marketplace as a chargeback system.

Governments and large enterprises use SpotCloud to satisfy similar, internal needs for resource sharing. Some customers use the marketplace for both private and public cloud resources, Cohen said.

"SpotCloud customers now have the ability to tap into the capacity that they have internally, and they also have a centralized way to tap into capacity with approved partners," he said.

The need to interconnect various "community exchanges" will likely drive cloud federation, Cohen predicted. These exchanges will grow and consolidate into larger public exchanges and marketplaces. He believes this metamorphosis will be sudden, not gradual -- akin to the adoption of social media.

Cloud providers evaluating cloud federation for the marketplace model -- either as prospective participants or cloud services brokers -- should keep all of these adoption trends in mind while also weighing their risk tolerance.

Next: Check out part two of this series, OnApp: With federated cloud, CDN services possible for providers, or jump back to the table of contents, Three paths to the federated cloud: Which is right for you?

This was last published in July 2012

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I think that SpotCloud was a great idea, launched a little ahead of its time. Cloud infrastructure is commoditising, and uptake of public cloud is steadily increasing, as we see from Amazon's success. What is missing from the market is financial intermediation by a plethora of "cloud broker-dealers", who would become the biggest traders on one or more SpotCloud-like exchanges or clearing houses. The only cloud broker-dealer currently in the market is Strategic Blue.