Infrastructure as a service (IaaS) vendor Enomaly establishes a marketplace to buy and sell unused computing resources. Dubbed SpotCloud, the new beta service has the potential of helping IT departments reduce costs while also increase revenue potential from IT. Is SpotCloud right for your business? Will Enomaly’s open source efforts affect your decision?

Creating a win-win-win scenario for buyers, sellers and Enomaly
SpotCloud offers sellers with unused computing resources an opportunity to convert these idle resources into a profit centre. Sellers have the ability to define capacity quotas, utilization levels, duration and pricing.

Buyers are able to search for computing resources based on processing power, pricing and the physical location of the computing resource. Buyers can access short term computing resources for significantly less than purchasing the resources in-house or through a third party cloud computing provider. Enomaly claims savings can be up to 60 percent for buyers using SpotCloud.

While Amazon does offer buyers a spot market for its Elastic Compute Cloud (EC2), the resources available are from a single market participant, Amazon. SpotCloud aims to create an efficient market through attracting a large number of buyers and sellers. For creating this marketplace, providing the software to enable sellers to securely make their excess computing resources available and handling billing and payments, Enomaly keeps between 10 to 30 percent of the seller’s revenue.

On paper, it’s a win-win-win scenario for all parities involved. But there are a few considerations before jumping into the marketplace.

The preverbal cloud lock-in issue
Sellers providing computing resources must support a compatible IaaS platform which makes these resources usable and provides usage tracking in a standardized fashion.

SpotCloud currently only supports the Enomaly Elastic Computing Platform (ECP), Enomaly’s IaaS product which has been on the market for over five years. Enomaly offers a feature limited, version of Enomaly ECP for SpotCloud sellers to use at no charge. SpotCloud expects to add support for other IaaS platforms in the coming weeks. As this occurs, sellers will have additional reassurances about reduced lock-in.

Buyers on the other hand must have a virtual machine (VM) package, also referred to as appliances, before being able to use the resources from SpotCloud. The packaging of these appliances is however based on proprietary desktop and command line tools from Enomaly. Seeing this as a potential area of concern, Enomaly founder and CTO, Reuven Cohen, announced plans to open source these tools in the near future.

An opaque market without service level agreements
Enomaly refers to the SpotCloud market as being opaque because the seller’s identity is unknown. This is attractive to sellers, like hosting providers, who have excess capacity to sell at a lower price than they offer directly to their regular customers. Opaque markets allow sellers to offer lower prices on excess capacity without cannibalizing their primary revenue source.

An opaque market could concern buyers that need to know where their workload will run or who may be concerned about the security of their data within the VM. The former concern is addressed by the ability to select resources from sellers based on the geographic location of the physical computing resources. SpotCloud does not directly address the latter concern. However, prudence suggests being cautious, especially in the early days of SpotCloud, about the type of data and workload being processed through resources from the marketplace.

Another key consideration is the fact that SpotCloud does not offer service level agreements (SLAs). For may IT organizations, this could be a deal breaker. However, SpotCloud is intended for workloads that can be restarted when a failure occurs or can take longer than expected without impacting business critical processes. If these don’t meet your business needs, SpotCloud may not be a good fit for your business.

Could SpotCloud to follow in Amazon’s footsteps?
SpotCloud will sound very much like Amazon cloud offerings did when they first hit the market – not up to par with the needs of a typical IT department. And yet, Amazon is the leading public cloud provider in the market. IT departments, startups and others have decided to work within the limits of Amazon Web Services (AWS) in order to benefit from the lower cost and greater flexibility that AWS offers.

SpotCloud has the potential to follow in Amazon’s footstep based on its lower cost, revenue potential and greater flexibility. Companies drawn to these benefits will begin using SpotCloud as an element of their IT processes, not as wholesale replacement of established processes.

Few CIOs can ignore an opportunity for lower costs while also generating revenue for the business, as long as risks can be managed effectively. IT decision makers are encouraged to track the progress of SpotCloud and consider its use for certain non-business critical tasks with limited security concerns. IT decision makers seeking to shift the view of IT being a cost center should consider offering excess computing resources to the SpotCloud marketplace.

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