James mitchell cloud is traded as a commodity - cloud camplondon 24.12.12

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James mitchell cloud is traded as a commodity - cloud camplondon 24.12.12

  1. 1. Cloud Broker-Dealers Dr James Mitchell @strategicblue
  2. 2. A cloud broker-dealer?Buys from the Cloud …Sells to the CloudProvider on terms to suit User on terms to suitthe Provider… the User• Pay sooner • Pay later• Highest price • Lowest price• Long-term deals • Short-term deals• Pay for capacity • Pay for usage• Firm commitment • No commitment• Weak SLA • Strong SLA• Nothing unusual • Non-standard requestsA cloud broker-dealer is someone you can negotiatewith on price, payment term and commitment period
  3. 3. Reason to sell through Broker- Dealer • Sell long-term block usage • Get paid upfrontCloud Capacity • Extra sales channel Cloud Providers offer big discounts for big blocks sold long-term Time (months)
  4. 4. Reasons to buy through Broker-Dealer • Avoid credit card • Extend payment terms • Pay in different currency • Future starting, fixed price dealsCloud Capacity • Multi-cloud invoicing • Never more expensive • Often a lot cheaper Cloud Providers offer big discounts for big blocks sold long-term Time (months)
  5. 5. Trading other Commodities
  6. 6. Cloud Trading Screens…Work in Progress
  7. 7. Does Fungibility Matter? • There are 10 different regional US electricity markets • They each have different rules and standards. • Most customers in NY will be unhappy if you deliver power to them in California. BUT •There are some buyers who can accept power in a different region for the right price. •This has the effect of “coupling” thehttp://www.ferc.gov/market-oversight/mkt- markets – prices are more correlatedelectric/overview.asp where more buyers can use either market. Buyers routinely switching cloud providers based on pricing signals will lead to more rational cloud pricing
  8. 8. Electricity Prices in Different Markets • Standard Unit of Measure • Independently metered • Comparison becomes easy • Makes trading easier • Allows exchange trading • Promotes pricing transparencyhttp://www.ferc.gov/market-oversight/mkt-electric/overview/elec-ovr-on-pk-elec-pr.pdf
  9. 9. Can we learn from Coal• Two lumps of coal are not the same, even if you use the same machine to dig them up.• Coal is traded based off the price for “standard coal” Source – The Australian Source – Argus Media
  10. 10. Questions? Dr James Mitchell CEO, Strategic Blue contact@strategic- blue.com www.strategic-blue.com @strategicblue

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