Global Cloud Exchange and Markets

Enterprises currently employ Cloud services in order to improve the scalability of their services and to deal with bursts in resource demands. However, at present, service providers have inflexible pricing, generally limited to flat rates or tariffs based on usage thresholds, and consumers are restricted to offerings from a single provider at a time. Also, many providers have proprietary interfaces to their services thus restricting the ability of consumers to swap one provider for another.

For Cloud computing to mature, it is required that the services follow standard interfaces. This would enable services to be commoditised and thus, would pave the way for the creation of a market infrastructure for trading in services. An example of such a market system, modeled on real-world exchanges, is shown in Figure 1. The market directory allows participants to locate providers or consumers with the right offers. Auctioneers periodically clear bids and asks received from market participants. The banking system ensures that financial transactions pertaining to agreements between participants are carried out. Brokers perform the same function in such a market as they do in real-world markets: they mediate between consumers and providers by buying capacity from the provider and sub-leasing these to the consumers. A broker can accept requests from many users who have a choice of submitting their requirements to different brokers. Consumers, brokers and providers are bound to their requirements and related compensations through SLAs. An SLA specifies the details of the service to be provided in terms of metrics agreed upon by all parties, and penalties for meeting and violating the expectations, respectively.

Figure 1: Global Cloud exchange and market infrastructure for trading services.

Such markets can bridge disparate Clouds allowing consumers to choose a provider that suits their requirements by either executing SLAs in advance or by buying capacity on the spot. Providers can use the markets in order to perform effective capacity planning. A provider is equipped with a price-setting mechanism which sets the current price for there source based on market conditions, user demand, and current level of utilization of the resource. Pricing can be either fixed or variable depending on the market conditions. An admission-control mechanism at a provider’s end selects the auctions to participate in or the brokers to negotiate with, based on an initial estimate of the utility. The negotiation process proceeds until an SLA is formed or the participants decide to break off. These mechanisms interface with the resource management systems of the provider in order to guarantee the allocation being offered or negotiated can be reclaimed, so that SLA violations do not occur. The resource management system also provides functionalities such as advance reservations that enable guaranteed provisioning of resource capacity.

Brokers gain their utility through the difference between the price paid by the consumers for gaining resource shares and that paid to the providers for leasing their resources. Therefore, a broker has to choose those users whose applications can provide it maximum utility. A broker interacts with resource providers and other brokers to gain or to trade resource shares. A broker is equipped with a negotiation module that is informed by the current conditions of the resources and the current demand to make its decisions.

Consumers have their own utility functions that cover factors such as deadlines, fidelity of results, and turnaround time of applications. They are also constrained by the amount of resources that they can request at any time, usually by a limited budget. Consumers also have their own limited IT infrastructure that is generally not completely exposed to the Internet. Therefore, a consumer participates in the utility market through a resource management proxy that selects a set of  brokers based on their offerings. He then forms SLAs with the brokers that bind the latter to provide the guaranteed resources. The enterprise consumer then deploys his own environment on the leased resources or uses the provider’s interfaces in order to scale his applications.

However, significant challenges persist in the universal application of such markets. Enterprises currently employ conservative IT strategies and are unwilling to shift from the traditional controlled environments. Cloud computing uptake has only recently begun and many systems are in the proof-of concept stage. Regulatory pressures also mean that enterprises have to be careful about where their data gets processed, and therefore, are not able to employ Cloud services from an open market. This could be mitigated through SLAs that specify strict constraints on the location of the resources. However, another open issue is how the participants in such a market can obtain restitution in case an SLA is violated. This motivates the need for a legal framework for agreements in such markets.

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