Enomaly has launched an online market that will let anyone shop for low-cost, no-frills computing power offered by a variety of providers.
The company, which offers software that cloud services providers use, came up with the idea as a way to help its customers fill up unused capacity.
There are currently 15 cloud providers offering their services through the SpotCloud market. Enomaly is offering the market as a beta right now to make sure that it can handle requests, so end users must register and be approved before they can buy services.
Once approved, buyers can visit the site and begin entering details about the kinds of services they are looking for. For instance, they can designate a region or even a city where they want the computing power to be hosted. They choose hardware requirements in terms of RAM and CPU. They then pick the price they want to pay, which will differ depending on the quality of the service.
The name of the service provider is revealed only once the buyer has made a purchase.
Enomaly decided to keep the names of the service providers anonymous to address concerns of some providers that their services might become commoditized, said Reuven Cohen, founder and chief technologist for Enomaly. "The opaque model reduces the chances of cannibalization of retail sales," he said. The service providers charge more for their services when they sell them directly to customers.
The potential upside seems to be outweighing the risks, at least for the 15 service providers already involved in the market. Companies are building data centers to offer cloud services but "building something doesn't mean it's going to sell itself. They are facing this dilemma of underutilization," Cohen said. "It's better to sell than let it go to waste for nothing."
The SpotCloud market lets service providers set the terms for what they are selling. For instance, they can sell excess capacity that they might have in the middle of the night or strip out services that they might typically offer retail customers.
The idea is to offer users a straightforward virtual machine. "If you want all the bells and whistles you can go to Amazon and get it and pay retail for it," Cohen said.
Amazon also offers spot instances, where it lets customers bid on Amazon's unused computing power. But SpotCloud has an advantage because it's a marketplace where providers compete to offer the service, Cohen said.
Enomaly charges service providers a commission that ranges from 10% to 30% of the transaction depending on usage volume. It is not yet announcing the names of the service providers that have signed up to sell through SpotCloud, and Enomaly is also screening new providers that want to become part of the market during the beta period.
Enomaly spent about a year developing the market. It finally took off once the company decided to make it simple, Cohen said. "The reality is this has never been tried before. We didn't want to do something overly complicated with bidding algorithms and things like that. So this is a simple first approach," he said.