How to Bid on Computing Power

Imagine buying time on a computer in Ireland or Indiana the same way you'd bid for an antique on eBay. That's how a new crop of startup companies called "cloud brokerages" plan to change the way companies buy and sell computing capacity.

Such markets offer steeply discounted rates, and they may as well offer financial benefits to companies running cloud data centers, some of which are flush with excess capacity. "The more utilized you are as a [cloud services] provider ... the faster return on investment you'll realize on your hardware," says Reuven Cohen, founder of Enomaly, a Toronto-based firm that last February launched SpotCloud, cloud computing's first online spot market.

On SpotCloud, computing power can be bought and sold like coffee, soybeans, or any other commodity. However it's caveat emptor for buyers, since unlike purchasing computer time with Microsoft, buying on SpotCloud doesn't offer many contractual guarantees. There is no assurance computers won't suffer an outage, and sellers can even opt to conceal their identity in a blind auction, so buyers don't always know whether they're purchasing capacity from an established vendor or a fly-by-night startup.

Currently, Cohen says, 1,300 companies have registered to sell computing power on SpotCloud. At any given time those sellers are offering the computing-power equivalent of 100,000 servers with 400,000 gigabytes of computer memory. To put that in perspective, AT&T owns only slightly more than 20,000 servers.