[ Cloud Computing ] Re: Compute surface as a traded commodity?

It also assumes you app uses only CPU and no memory, disk or I/O, network and so on. To say it's inaccurate is the mother of all understatements...

Ray

---

From: Xavier Morera <xavier.morera@axelerate.com>
To: cloud-computing@googlegroups.com
Sent: Tuesday, December 16, 2008 12:37:34 PM
Subject: [ Cloud Computing ] Re: Compute surface as a traded commodity?


I think it is a good point about the CPU hour, not all processors are
created equal.  I was thinking about moving some sites to MOSSO, rackspace's
cloud and I got to the offering of their hosted service.
They talk about 10,000 computing cycles per month.  I asked them and this is
what they said:

"Compute cycles measure how much processing time your applications require
on the The Hosting Cloud. Using 10,000 compute cycles in a month is roughly
equivalent to running a server with a 2.8 GHz modern processor for the same
period of time."

The problem is that depending on the type of application that you run, this
is a very inaccurate answer.

-----Original Message-----
From: cloud-computing@googlegroups.com
[mailto:cloud-computing@googlegroups.com] On Behalf Of Roger Lewis
Sent: Tuesday, December 16, 2008 11:14 AM
To: cloud-computing@googlegroups.com
Subject: [ Cloud Computing ] Re: Compute surface as a traded commodity?


Relevant point about the cost of a barrel of oil.

So what we might be seeing is Cloud providers working out their capex 
and opex costs down to the finest detail in order to increase ROI, 
however its unlikely we will see these workings in detail. Nothing to 
stop us doing our own costing exercises with matrices for all the 
variables such as:

CPU speed
FSB speed
L2 Cache size
Main memory size, etc.

I am sure others can come up with more parameters, this is just a 
strawman intended to cover a bunch server performance contributors.

In order for Cloud resource providers to approach commodity pricing 
models (very attractive for consumers) a whole lot of things have to 
happen. I don't see any pricing out there hinting at commoditization 
yet. I see a lot of different offerings from different major players 
each trying hard to increase market share. The richer the 
differentiation between offerings available the longer the road to a 
commodity market. This is a natural tendency, preserve and increase 
service / product differentiation in order to increase market share.

This will get exciting when a big player announces price cuts down to 
about 1/10th of what we see today, i.e. 1 cent per CPU GHz hour. Would 
you drop your Rackspace servers before then?


Roger

--      --
Roger Lewis
roger.w.lewis@mac.com



On 16 Dec 2008, at 16:49, Pittard, Rick wrote:

>
> Actually, the price of a barrel of oil is for a very specific grade 
> at a
> specific location.  The real prices vary depending on quality and
> location - maybe just like a CPU-hour should.
>
> Rick
>
>
> -----Original Message-----
> From: cloud-computing@googlegroups.com
> [mailto:cloud-computing@googlegroups.com] On Behalf Of Jim Houghton
> Sent: Tuesday, December 16, 2008 9:16 AM
> To: cloud-computing@googlegroups.com
> Subject: FW: [ Cloud Computing ] Compute surface as a traded 
> commodity?
>
>
> Interesting thread ... I had discussions with executives at a large
> investment bank (one of the few still around today!) as far back as 
> 2002
> when we were implementing large grids for risk & portfolio analysis 
> that
> leveraged 'scavenged' resources for some of the compute footprint.  I
> agree
> this will happen, but interoperability is not the only obstacle.
> Placing
> security off to the side - let's assume for the discussion someone has
> already overcome their technology or compliance hang-ups - there is a
> major
> business challenge to overcome.
>
> We all know what an ounce of gold, or bushel of corn, or a barrel of 
> oil
> is
> around the globe.  So what is the equivalent unit of trade for 
> computing
> cycles?
>
> Think before you answer ... 'CPU hour' just wants to jump off your
> tongue,
> but as we all know not all CPU's are created equal (even by the same
> manufacturer).  Then of course there's memory, bus speed, network
> bandwidth,
> network throughput, operating system, latency to/from your origination
> point, disk read/write speed ... I could go on and so can you. I've 
> been
> living this for 6+ years working with clients who want to build 
> internal
> utilities (clouds), and even there it's difficult to get agreement as
> this
> forms the basis for what they are going to get charged for the 
> resources
> they consume.  It's not much of a 'utility' if users got a flat annual
> allocation charge, is it?  Yet that's by far the most common situation
> in
> large enterprises today.
>
> There's the closet economist in me who feels (hopes) someone will just
> start
> such a market and soon thereafter the laws of supply and demand will 
> set
> the
> appropriate prices.  Those with high quality service will be sold out
> and
> can increase their prices, with the reverse also true.  However,
> especially
> with the current state of global economic affairs, I am doubtful it 
> will
> happen anytime soon.  Nor do I think we can count on any standards 
> forum
> to
> tackle such an issue, and the major vendors will undoubtedly look at
> normalization (translate: commoditization) of their technologies as a
> bad
> thing.
>
> Anyway, hopefully this provokes some thoughts - look forward to your
> responses.
>
> Jim
> _________________
> Jim Houghton
> CTO and Founder
> Adaptivity, Inc.
> (845) 494-9419
>
> www.adaptivity.com
>
> -----Original Message-----
> From: cloud-computing@googlegroups.com [mailto:] On Behalf Of Simon
> Plant
> Sent: Tuesday, December 16, 2008 7:03 AM
> To: cloud-computing@googlegroups.com
> Subject: [ Cloud Computing ] Compute surface as a traded commodity?
>
> Bruce wrote:
>> Will the "Cloud" ever become a pool of hosting providers who pitch
> their
> prices, SLA's and storage cost so customers will come to their "cloud"
> for
> services?
>
> I foresee a time into the future where the compute surface is
> virtualized
> and standardized enough that hosting contracts can be traded as a
> commodity
> on a market, rather than the RFP type process we have today.
>
> Such agreement would allow business to place a deal on an exchange 
> much
> like
> FX today and get bids to run based on some parameters.  IT hosters 
> would
> price the deal with a spread in the same way as a currency trade 
> today,
> the
> deal done in a matter of seconds and hosted for the duration of a
> contract
> window.
>
> If virtualization vendors deliver on their hybrid end-vision, this 
> could
> be
> a reality of packaging workloads with SLA manifests and using internet
> vMotion-type tools to migrate. It would fundamentally change the way 
> we
> write software frameworks and applications themselves to be more self
> contained and highly standardized to achieve the best 'tradability'.
>
> Interoperability via standards between VM platforms, portability of
> data,
> code business logic and processes are all key to how we build out the
> Cloud.
>
>
> Such openness may be a far extreme view, but would you want the 
> opposite
> view of the world where switching costs and lock-in are extremely
> constraining and we are forever stuck in a platform cycle of
> distribute-and-consolidate?
>
>
> Simon Plant
>
>
>
>
>
>
>
> >






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