The launch of Deutsche Börse’s Cloud Exchange trading platform will support the growth of cloud brokers acting as intermediaries for end-user customers , enabling them to save on IT budgets by offloading excess capacity.

Deutsche Börse today announced that it will launch its cloud trading platform in 2014 for infrastructure as a service (Iaas) cloud computing resources, the first international vendor-neutral marketplace of its type.

The trading venue is aimed at enabling access a platform to trade compute and storage capacity, just as commodities might be bought and sold on a traditional exchange.  Buyers will be abe to procure resources directly or trade between each other, while suppliers will be able to sell down to customers. 

A number of cloud provider companies are already on board as early adopters of the platform, such as CloudSigma and T-Systems, and Deutsche Börse has partnered with German firm Zimory to provide an interface between users and the trading platform. The Cloud Exchange will also set and monitor standards to ensure the running of the exchange, such as around guaranteeing purchased capacity. 

According to Stefan Ried at Forrester Research, the launch of the platform is a natural evolution for the cloud Iaas market due to the commoditisation of cloud resources, shown in the continued price drops of Amazon Web Service and others.

It is not the first time that a marketplace has offered to buy and sell spare capacity.  Spotcloud has offered a service like this in the past, though its offering was based on buying and selling the services of one vendor, Enomaly.

However Deutsche Börse’s Cloud Exchange is more ambitious in its aims, providing a forum to buy and sell resources from a range of different supplier sources.

Ried says that the introduction of markets to buy and sell cloud capacity will have a number of benefits. For end-user customers one of these will be ability to reduce IT expenditure by selling back unused cloud resources.

“The total spending on cloud will be brought down,” Ried told ComputerworldUK, “people will find resources or sell if they don’t need it. If they bought too much Amazon or Microsoft resources for instance they can be sold off on the exchange.  This means that the corporate spending on cloud resources will be brought down with the help of the exchange.” 

For example, a company might buy 50 virtual machines for a year, but no longer need that amount after nine months.  This would be similar to the way that Amazon’s EC2 Reserved Instance Marketplace functions, allowing companies to sell back part of their contract to another end-user, though exchange users would be able to buy and sell resources from a variety of cloud providers.

However there are a number of challenges that will have to be faced. Ensuring that supplier contracts allow the sharing of resources will be one of the main challenges that will face the Cloud Exchange, while interoperability between OpenStack or VMware stacks will need to be addressed.

Allowing resources to be directed to end-users is also a challenge. Ensuring that the Cloud Exchange ecosystem contains local cloud providers and cloud brokers to provide a link between the exchange and end-user customers will also be key to ensuring the success of the platform overall, Ried said. This is because it is likely that it will be only the largest of enterprise users that deal directly with Deutsche Börse’s exchange, due to the complexity of procuring through a trading platform.

“Enterprise users can deal directly with the Cloud Exchange, but they need to know how to do so.  It is not that easy to move workloads back and forth and to relocate them, while keeping everything consistent," Ried said.

“You need to understand the economic side and it is not easy – it is becoming really complex.”

He continued: “The very largest enterprises that have more than half a billion IT budget will likely do it on their own because they have the economies of scale and have enough knowledge in the CIO office to deal with the exchange directly. But for the average company, even with a couple of million IT budget, this is too complex, so they won’t go to an exchange like this.”

This means that cloud brokers will play a role in assisting end-users in the buying and selling of capacity, by implementing knowledge of the needs of customers on a local basis.

“I expect in the ecosystem of Deutsche Börse’s Cloud Exchange there will be a number of cloud brokers that can get access to capacity, and can also sell overcapacity that they ordered again," he said.  "This is the ideal situation in the ecosystem of this marketplace - a cloud broker can understand your local cloud sourcing and global cloud sourcing, and understand on-premise capacity.”

If the cloud exchange model is successful, Ried expects that there could be more set up in other major regions across the world.

“We need maybe one per geography. I don’t think we need multiple per country.  If the model works well and they overcome the challenges this can be very successful. There could be another one in UK, another one in the Middle East, and in Asia, and two in the US, though I don’t see more than five to ten doing this in future.”

For now it is likely that there will be many looking at how successful Deutsche Börse’s is, Ried said.

“If they follow the demand and revise their own business model as an exchange, such as how they trade how they work together with cloud brokers and so on, and if they revise the business model and create their own ecosystem of cloud trading chain, like cloud brokers, then it is likely to be successful.”