Deutsche Börse’s commodity exchange for cloud computing resources, a sector attracting widespread corporate venturing investment, holds out the promise of doing for cloud computing what GSM standardisation did for mobile communications.
Deutsche Börse has just led a $20m funding round for Zimory, a Germany-based provider of cloud management software. Return backers included T-Venture, the venture capital company of Deutsche Telekom, and financial investors High-Tech Gruenderfonds, IBB Beteiligungsgesellschaft and KFW.
The strategic funding underpins a partnership between Deutsche Börse and Zimory, which will see Zimory provide the interface and settlement process for the Deutsche Börse Cloud Exchange (DBCE), scheduled to open for business in the first quarter of 2014.
Maximilian Ahrens, a founder of Zimory and also chief technology officer of the DBCE, explains how the project for a cloud computing exchange began one and half years ago, inspired by the European energy exchange: “Electricity was the first artificial product to be traded on international exchanges, and the cloud computing world is following a similar model.”
Standardisation of product is a necessary characteristic of the exchange. In fact, attendees at a TMCnet-hosted webinar about the DBCE, responded that standardisation was the most important technical factor in terms of the success or otherwise of a global cloud exchange.
Ahrens continues: “It is similar to other commodity markets. Look at food. Bananas are not all the same. They are standardised by defining what a standard banana is, and although they are not all just the same, they are similar enough to be traded in a marketplace.”
Besides standardisation, the DBCE will also establish admission criteria – to ensure that buyers and sellers actually are capable of delivering products as defined – and a settlement process, so that purchasers can access the resources they have bought. Settlement is being provided by Zimory, whose software allows for the management of hybrid, public/private clouds and even virtual private clouds inside public clouds.
As with any exchange, one of the challenges facing the DBCE will be to generate liquidity. It may also be a pertinent question for users of what happens should the exchange ever fail: in the parallel world of financial exchanges, it so happens that measurement and provisioning for risks associated with exposure to central counterparties (i.e. exchanges) is under intense review as part of the Basel III banking regulations.
Rüdiger Baumann, chief executive officer of Zimory, is confident that a successful exchange will benefit everyone : “The slow take-up of the cloud computing market has been because of a lack of standardisation and interoperability. By solving this problem, things will appear that we never saw before or even dreamt of, like in the GSM market for mobile communications.”