2. A cloud broker-dealer?
Buys from the Cloud …Sells to the Cloud
Provider on terms to suit User on terms to suit
the 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
requests
A cloud broker-dealer is someone you can negotiate
with on price, payment term and commitment period
3. Reason to sell through Broker-
Dealer
• Sell long-term block usage
• Get paid upfront
Cloud Capacity
• Extra sales channel
Cloud Providers offer big
discounts for big blocks sold
long-term
Time (months)
4. Reasons to buy through Broker-Dealer
• Avoid credit card
• Extend payment terms
• Pay in different currency
• Future starting, fixed price deals
Cloud Capacity
• Multi-cloud invoicing
• Never more expensive
• Often a lot cheaper
Cloud Providers offer big
discounts for big blocks sold
long-term
Time (months)
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” the
http://www.ferc.gov/market-oversight/mkt-
markets – prices are more correlated
electric/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. Electricity Prices in Different
Markets
• Standard Unit of
Measure
• Independently
metered
• Comparison becomes
easy
• Makes trading easier
• Allows exchange
trading
• Promotes pricing
transparency
http://www.ferc.gov/market-oversight/mkt-electric/overview/elec-ovr-on-pk-elec-pr.pdf
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. Questions?
Dr James Mitchell
CEO, Strategic Blue
contact@strategic-
blue.com
www.strategic-blue.com
@strategicblue