Enomaly buy to fuel new Virtustream exchange

Virtustream is planning an exchange where companies can buy and sell excess capacity from their private clouds

Virtustream's acquisition of Enomaly could help enterprises turn a drawback of private clouds--excess capacity--into a profit center.

On Thursday, Virtustream, an infrastructure-as-a-service provider that also offers software for businesses to build private clouds, announced plans to acquire Enomaly. Enomaly offers software to providers building public clouds but it is also known for SpotCloud, its marketplace where anyone can shop for on-demand compute services from providers that are looking to sell unused capacity, often at a discount.

The companies did not disclose terms of the deal, which they expect to close in the first quarter.

If Virtustream's plans pan out, it will use technology from SpotCloud to build an exchange where enterprises will be able to buy and sell excess cloud capacity from their private clouds. The exchange would help businesses find users for excess servers that they must deploy to accommodate for spikes in traffic.

"What we're hearing [from customers] is an outreach for products that allow them to maximize the use of their own physical assets on premise and also enjoy the benefits of the economics of multitenancy, because no matter how scalable you are, if you're not using capacity you're still paying for it," Kevin Reid, CEO of Virtustream, said.

The exchange would build on Virtustream's concept of an infrastructure unit. An infrastructure unit, as Virtustream defines it, is a way of measuring cloud usage and combines CPU, memory, bandwidth and IOPS. Virtustream prices its IaaS service based on infrastructure units, which it says is more efficient for users.

"That does what the kilowatt did for electricity," Reid said. "It's a unique way of managing and provisioning and billing for workloads based on this normalized unit of measure."

This common unit of measure is key for creating an exchange so that businesses contributing their excess capacity sell that capacity on the same basis. The infrastructure unit will be like a currency for buying and selling in the exchange, he said.

Virtustream has already begun talking to partners about participating in the exchange so that it won't be limited just to businesses that have built their private clouds using Virtustream's cloud software, he said.

Reid did not have a time frame for when this exchange might become available to businesses.

The exchange won't replace SpotCloud, which Virtustream plans to do some work on before launching commercially. For instance, it will incorporate its infrastructure unit as a measurement unit in SpotCloud. SpotCloud is currently in beta release.

Virtustream hasn't yet decided exactly how it will handle Enomaly's cloud software. It could combine the best of its own software with Enomaly's for an integrated product.

In the short term, Reuven Cohen, Enomaly's founder and well-known voice in the cloud startup community, will help with the integration of the companies and from there will determine his position at Virtustream, he said.

Nancy Gohring covers mobile phones and cloud computing for The IDG News Service. Follow Nancy on Twitter at @idgnancy. Nancy's e-mail address is Nancy_Gohring@idg.com

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Tags cloud computingMergers and acquisitionsinternetbusiness issuesVirtustreamInfrastructure servicesEnomaly

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Nancy Gohring

IDG News Service
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