In the not too distant future computation will be a commodity. As the Economist outlines the market is developing to buy and sell computation. Amazon has quietly become the leading utility in the space through it’s cloud services. There’s a clear link here between computation and energy. At it’s core computaiton is energy, it’s the pushing of electrons through transistors. As the cost of hardware continues to fall the limiting cost in computation is now energy which is why the large data centers are being built around sustainable energy sources. In the 90s Enron tried to do this with bandwidth, an idea ahead of its time. Today we’re seeing Google become an energy merchant getting approval to buy and sell power a couple weeks ago from FERC. Today we price $s per megawatt, tomorrow $s per teraflop.
IF YOU are tired of hearing the word “cloud” attached to every term in the computing lexicon, you are not alone. Disillusioned tech folks are beginning to succumb to “cloud fatigue”. But the concept of computing as a basic utility delivered over the internet is here to stay. In fact, the industry is already taking the first steps toward turning computing power into a tradable commodity akin to electricity.
It took decades for electrical power to become a tradable commodity. Computing seems to be getting there faster. Standards bodies are working on rules that would make it easier to move virtual machines around, and a raft of start-ups are making this their business. Zimory’s software ties together corporate data centres so that they work as one. Cloudkick offers tools to manage virtual machines. It is the force behind libcloud, an open-source project that facilitates the development of services spanning different clouds. And RightScale is a pioneer in “cloud broking”, meaning that it helps customers switch between clouds or use several different ones so they do not have to keep all their eggs in one computing basket.
Yet it is probably Amazon that will be seen as the firm that really launched computing markets. In December it introduced a new pricing option: customers bid for the retail giant’s unused computing capacity and get to run their virtual machines as long as their bid exceeds the minimum price needed to balance supply and demand. As a result, the price jigs up and down all day like those of pork bellies or wholesale power.
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