Lowering your IT costs by using others’ excess capacity

Infrastructure-as-a-service (IaaS) vendor Enomaly has established 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 increasing revenue potential. Is SpotCloud right for your business?

Creating a win-win-win scenario for buyers, sellers, and Enomaly

SpotCloud offers companies with unused computing resources an opportunity to convert these idle resources into an income stream. Sellers have the ability to define capacity quotas, utilization levels, duration, and pricing.

[ Get the latest insights and news on open source trends with InfoWorld’s Technology: Open Source newsletter. Subscribe today! | Get the no-nonsense explanations and advice you need to take real advantage of cloud computing in the InfoWorld editors’ 21-page Cloud Computing Deep Dive PDF special report. ]

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

Although Amazon.com does offer a spot market for its Elastic Compute Cloud (EC2) platform, the resources available are from a single market participant: Amazon.com. SpotCloud aims to create an efficient — that is, competitively priced — market by 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 parties involved. But there are a few considerations before jumping into the marketplace.

Cloud lock-in: The proverbial question

Sellers offering computing resources must support a compatible IaaS platform for making these resources usable and providing usage tracking in a standardized fashion.

SpotCloud currently supports only the company’s own Enomaly Elastic Computing Platform (ECP). Enomaly offers a limited version of 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 package — aka appliances — before being able to use the resources from SpotCloud. The packaging of these appliances is based on proprietary desktop and command-line tools from Enomaly. Seeing this as a potential area of concern, Enomaly CTO Reuven Cohen announced plans to open-source these tools in the near future.

An opaque market without SLAs

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 peddle at a lower price than they quote to their regular customers. Opaque markets allow sellers to offer lower prices on excess capacity without cannibalizing their primary revenue source.

But an opaque market could concern buyers who need to know where their workload will run or may be concerned about the security of their data within the virtual machine. The issue of location is addressed by SpotCloud’s ability to select resources from sellers based on the geographic setting of the physical computing resources. SpotCloud does not directly address security, and prudence suggests caution, especially in the early days of SpotCloud, about the type of data and workload being processed through resources from its marketplace.

Another key consideration is the fact that SpotCloud does not offer SLAs. For many IT organizations, this could be a deal breaker. However, SpotCloud is intended for workloads that can be restarted when a failure occurs or take longer than expected without impacting business-critical processes. If that’s not what your business needs, SpotCloud may not be a good fit.

Could SpotCloud follow in Amazon.com’s footsteps?

SpotCloud sounds very much like Amazon.com’s initial cloud offerings: not up to par with the needs of a typical IT department. Nonetheless, Amazon has become 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) to benefit from the lower cost and greater flexibility that AWS offers.

SpotCloud has the potential to follow in Amazon’s footsteps 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 a 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. I encourage you to track the progress of SpotCloud and consider its use for non-business-critical tasks with limited security concerns. If you’re seeking to shift the view of IT being a cost center, consider offering excess computing resources to the SpotCloud marketplace.

Follow me on Twitter at SavioRodrigues. I should state: “The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies, or opinions.”

This article, “Lowering your IT costs by using others’ excess capacity,” was originally published at InfoWorld.com. Read more of Savio Rodrigues’ Open Sources blog and follow the latest developments in open source at InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.