Based on my Interview with 6fusion CEO and Co-Founder John Cowan
John Cowan and Delano Seymour founded 6fusion in 2008 with an ambitious goal: to create an open marketplace for infrastructure-as-a-service (IaaS). Their first obstacle was to create a universal metric for measuring computing power, storage space and network capabilities. Skeptics likened creating standardized measurements for IT infrastructure to bunching all cars into one category, regardless of make or model, but Cowan and Seymour disagreed.
Commodities such as coal, gas and electricity are not consistent across the board, but standard units of measurements have been created to facilitate easy trading. For example, some power stations can use coal with higher sulfur levels because they possess the necessary equipment to filter it. Others cannot, meaning they must buy a product that is fundamentally different, yet they hedge in the same financial market. The 6fusion founders believed that similar standards could be applied to the cloud. Because of the transparency and significant cost savings an open marketplace provides to buyers, and the access to a global pool of users it provides to sellers, cloud computing could be the next oil if there was a way to break it into standardized units and trade it. Think about it, we will likely be storing information virtually for the rest of human existence.
For the past several years, 6fusion has been selling its software-as-a-service (SaaS) platform, UC6, to “meter, analyze, and optimize IT infrastructure usage.” Just this week, though, it announced the official launch of the 6fusion Marketplace, the open marketplace Cowan and Seymour envisioned when they started the company, to buy and sell IaaS. “For buyers, the Marketplace provides a venue to de-risk the concept of buying contracts from multiple cloud service providers while helping to shift the balance of power in the outsourcing process. For suppliers, the Marketplace provides a route to market that aggregates demand and thus dramatically lowers the cost of new business acquisition while exposing the important price:value ratio to the broader market,” Cowan told Editorial IV in an interview today. The marketplace utilizes the Workload Allocation Cube (WAC), a metric created by 6fusion to measure IT infrastructure usage. It allows buyers, sellers and brokers to speak the same language, making trading possible.
How can a platform provided by VMware and a platform provided by Amazon Web Services be converted into standardized units and traded in the same marketplace? This issue of interchangeability seems like it would be a major concern, but the Marketplace was designed with that in mind Cowan told Editorial IV. “What 6fusion has perfected is the ability to establish economic interchangeability. This is what the Workload Allocation Cube achieves. As time goes by, you will see this market develop as a collection of sub-markets that form around individual technology platforms and providers, such as AWS or VMware, until the technological interoperability and integration capabilities evolve to reduce the friction associated with workload portability,” he said.
On September 21, 6fusion announced a partnership with London-based cloud broker-dealer Strategic Blue, an “expert in cloud billing and price risk management, transferring expertise from the physical commodities markets to cloud computing.” The announcement came just two days after Cowan and Strategic Blue Co-Founder and CEO Dr. James Mitchell appeared together in an interview at GigaOM’s Structure: Europe conference in London.
The end game, Cowan said at Structure: Europe, is “an environment where customers can truly hedge risks like they do with other commodities that are raw material inputs to their business.” Cloud computing infrastructure should be treated no differently, and partnering with Strategic Blue will help make that environment a reality. Mitchell founded the company with John Woodley, a former managing director at Morgan Stanley. Woodley was co-head of non-oil commodities for EMEA and, according Strategic Blue’s website, is “one of the world’s foremost authorities on commodity market development and the pricing of non-standard pseudo-commodity products.” For a marketplace that is global in scope, with buyers and sellers in North America, Europe and Asia, the partnership will pay dividends.
It will be exciting to see how this new marketplace reshapes the world of IT infrastructure and the debate about the cloud as a commodity. It has the potential to shift some of the power service providers currently wield back to the customer. At the same time, it could open up a whole new world of customers the service providers have not been doing business with. Therein lies the brilliance of the plan. All parties involved can win: service providers, brokers, sellers and buyers. Keep an eye out for 6fusion in the coming months and years.