Wednesday, April 6, 2016

Cloud Providers in China

The cloud business is slowly but surely picking up in China as it has in the West. Out of the major multinational providers, only Microsoft Azure offers comprehensive service in China. Amazon in 2014 has introduced a closed limited program for region in Beijing, but this service excludes common services such as Elastic Beanstalk. China, however, has its own homegrown cloud services, principally SinaCloud and AliYun from Sina and Alibaba respectively. Baidu offers a PaaS service but not a full fledged IaaS. Unlike US cloud services, most Chinese cloud services are pay by the month instead of pay by the hour. This arrangement is quite limiting since one would be unable to scale down costs below the monthly unit. This truly adds up when one is talking about thousands of instances.

Tuesday, February 2, 2016

Investigating dislocations in the oil complex

The oil and basic material complex has suffered quite a downturn in 2015 and also in the beginning of 2016. Equity prices have declined dramatically. Oil and basic material company bonds have also been under quite a lot of pressure from downgrades from the credit rating agencies. Even large-cap companies have seen the yields they have to pay skyrocket. As the truism goes, when market volatility goes up, correlations all head to 1, since everyone sells everything. Having noticed HAL, BHP, and COP bonds going for 4.5% to 6%+, which is a huge spread to Treasuries, one wonders how severe of a downturn the market is pricing in.

The following is the correlation of the changes in bond yield (ought to be inversely related to bond price) and USO returns over the period January 4 to February 1.
Bond YieldEquity Price

Unsurprisingly, each of these companies equity prices are highly correlated to oil prices at this juncture. Even BHP, which is mildly removed from the oil complex, since it works in many basic materials and mining beyond oil, is highly correlated. It turns out that the bond yields of these otherwise investment grade bonds are also moving with the oil prices except for the case of HAL.

Monday, December 29, 2014

Understanding Cloud Host Pricing, Part 2

In the past few years, there has been a movement to standardize cloud compute resource measurements in order to make way for public trading of compute resources. The idea is simple, but execution may be complicated: each company can run something like OpenStack and rent off underutilized compute resources and these resources can be further trading on public exchanges to enable companies to hedge for price spikes. Along these lines, Amazon was quite early in introducing the Reserved Instance Marketplace. A public trading of standardized compute units will enable smaller organizations to monetize underutilized assets. This model is not without its challenges. Compute resources have many aspects that distinguish them. Performance may vary dramatically. In this post, I investigate some of the smaller cloud hosts and their prices.

ProviderMinimum Unit ($/hr)Memory (GB)Instance Storage (GB)Persistent Block Storage ($/GB/mo)
HP Helion0.031100.10
IBM SoftLayer0.041250.10
Oracle Cloud1.8
CloudSigma0.0319110.14 SSD
DreamHost DreamCompute0.0264225-
Internap0.04120 SSD0.30