intabank building spot market for cloud bandwidth on demand

Customers of data centre operators Equinix, Next DC, iseek Communications and Global Switch can provision extra bandwidth on an as-needed basis after startup intabank launched what it expects will become a global spot market for the unused capacity of data trunk lines.

That capacity is often sitting, unused, on leased services that companies use to connect to data centre operators, or dark fibre that has not been activated.

By tapping into the software-defined networking (SDN) capabilities of networking equipment from the likes of Cisco Systems and NetApp, intabank will let customers provision some of that ‘dark pool’ of bandwidth without having to commit to the higher data service on a permanent basis.

The venture is the brainchild of Andrew Sjoquist, founder and CEO of Sydney-based cloud-infrastructure provider ASE IT, who hit upon the idea as increasingly popular cloud-based services began testing the limits of the bandwidth available to ASE’s customers.

“When you’re creating cloud systems – whether processing, or backups, or storage – the connectivity we can provide to a client really starts to change the game about how they use that cloud infrastructure,” Sjoquist explains.

“The last thing we want is for people to think poorly of the cloud purely based on the fact they’ve got a low connectivity pipe running into their environment, and they don’t think they can do what they can do. The price point is usually an inhibitor, but if you can access that connectivity you can change your business dramatically for the positive.”

Like most large facilities, ASE’s ten data centres around the world – including five in Sydney and one each in Melbourne, San Francisco, Singapore, London and New York – had been commissioned with massive trunk services that were often running at well below capacity. Indeed, says Sjoquist, an internal survey showed that 56% of customer bandwidth and 92% of dark-fibre bandwidth was typically sitting unused.

“The last thing we want is for people to think poorly of the cloud purely based on the fact they’ve got a low connectivity pipe running into their environment.”

“These companies have a window they want to play in, and when they need bandwidth they really need it,” he explains. “But they don’t really need to have bandwidth for those large amounts of time. We’re trying to open up the world to give people as much ability as possible to access spare bandwidth – and to not have bandwidth become a constriction on their ability to move forward.”

The intabank service will allow customers to buy excess bandwidth by the megabit, with prices initially set at a fixed level – yet to be determined – and higher demand eventually expected to see pricing handed over to a dynamic bandwidth market not unlike the spot market for excess electricity generation capacity.

Maximum available bandwidth is only limited by the “smallest pipe that’s connecting as part of the ecosystem,” says chief sales and marketing officer David McGrath. “The key to the ecosystem will be to have it fully functioning, with as many buyers and sellers working in the environment to create a true sense of price, and to create enough demand that everyone’s able to fulfil their buying needs.”

Customers will eventually be able to bid on and purchase bandwidth through a Web portal on an as-needed basis, up to the limit allowed by their physical network access service.

“Our ultimate goal is to fully extend the software-defined networking capabilities that exist within the network, and push them out as far as possible to application developers,” Sjoquist says. “Network admins will be able to take control and make requests for bandwidth as required throughout the day.”

intabank is initially offering 10Mbps of transit bandwidth free and will waive its $500 establishment fee for new customers.