Most promising startup at the Malaysia Satellite, GridMarkets aims to solve big problems through its secondary market for excess processing power.
Of course, by “flop” we mean the computer engineering term for floating point operations (or floating point operations per second as with FLOPS), and not “flop” in the context of failures. GridMarkets, which won as the most promising startup at the Echelon 2013 Malaysia Satellite, deals with flops, particularly as a marketplace for buying and selling excess computational capacity.
e27 got to chat with GridMarkets co-founder and director Hakim Abdul Karim over the weekend to discuss what makes GridMarkets special, the startup community in Malaysia, and how the team aims to solve the world’s problems by sharing computing capacity. He quickly stressed that GridMarkets does not only operate on the premise of “cheap.” While it is true that buying excess capacity from unused processing power from the platform would be cheaper than getting it from cloud providers, he says that GridMarkets is much more than that.
“GridMarkets is actually complementary with Amazon Web Services,” Hakim adds. The platform adds value, and actually works well alongside cloud computing platforms that have grown in popularity today. He then went on to suggest, “Think about the second hand car market. These did not kill the brand new car dealerships, but actually helped the market for new cars. You wouldn’t buy a brand new car if you could not sell your old one for some value.”
Hakim raised the example of carpooling: “You see a lot of cars with only one passenger (the driver), which leads to waste and a lot of traffic. If everyone carpooled and shared the resource, then travel would be much more efficient.”
A crazy idea
The same concept goes with GridMarkets, which offers a platform for institutions with excess capacity to share these with others who might need the computing power. The idea stemmed from the experience of co-founder and Director Mark Ross as CIO in various enterprises. As cloud computing was not yet that popular during his decades stint at AIG and Sun Life, on-premises enterprise setups were the norm. Mark knew that most of the machines were completely underutilized — usually running only about 10 percent of capacity.
Then a “crazy” idea hit him: why not ask institutions to offer their excess capacity to others?
Hakim says that it is essentially free money for institutions that are offering their capacity through GridMarkets. Your servers are running, anyway, and you’re wasting power and energy if these are not put to good use.
And to debunk the idea that such a secondary market is unnecessary amid the popularity of cloud computing, Hakim says that its first few sellers on the platform were actually cloud providers and managed hosting providers.
Of course, the value add here is that GridMarkets simplifies the buying and selling of computing power through its platform. We asked Hakim if they are worried about their clients just going straight to each other, effectively cutting them off. Customers are more than welcome to do so, he said. But they would be limited to exchanging capacity between each other, and would have to do all the extra effort of interfacing, setting up, and accounting.
A three way contract
GridMarkets essentially establishes a three-way contract between the two institutions exchanging computing capacity, and between GridMarkets and each of these institutions. Hakim explains that this goes into three levels: technical, legal and reputational. Users can choose tho exclude institutions they would rather not share computational power with, which can help address the issue of competitors accessing proprietary data.
In the end, the reputation issue will play a big part. GridMarkets is essentially a closed community, and enterprises that choose to deal know that their counterparts are reputable institutions. It is worth noting here that GridMarkets is targeting the B2B marketplace, and its target market includes academic institutions, enterprises and organizations that host their on-premise facilities.
Solving the world’s problems
The team has so far been funded by angel investments from two high net-worth individuals who are investment bankers based in New York. Hakim explained that the Singapore and Hong Kong-registered startup (with headquarters in Malaysia) received an additional US$50,000 value in deferred legal fees from a US- and UK-based law firm, which assisted the team in setting up their company. Hakim says this is one way that the legal community is trying to help startups, even as they cannot take equity due to potential conflicts of interest.
With academic institutions and enterprises as GridMarkets’ main clients, the team is hoping that they can contribute to solving the world’s big problems in their own little way. “One of the reasons we’re doing this is that GridMarkets can provide enormous capacity at low cost, thereby adding value. We have an opportunity to really do a huge difference, such as solving complex problems, like finding cures for cancer, developing better drugs, designing more fuel-efficient vehicles, and the like,” Hakim stresses.
He added that running a startup is worlds apart from the co-founders’ corporate backgrounds, in which they managed IT departments with multi-million dollar budgets or products that have multi-million dollar revenue streams. But Hakim finds running GridMarkets interesting, technically and business-wise. “If we can help find a cure for cancer, then that is worth more than the business opportunity itself. It goes beyond business and being interesting, and it now becomes disruptive and transformational on a large scale.”
On the local ecosystem
After studying and working in the US, North America, Europe and Asia, Hakim found himself returning to his roots in Malaysia. “It’s a terrific place to start a company — way cheaper than Hong Kong or Singapore,” he says. “The startup environment in Malaysia is still nascent, although government is trying to improve support structures through various incubation schemes.” But Hakim added that Malaysia has the advantage being one of the predominantly English-speaking Asian countries (apart from Hong Kong, Singapore and the Philippines).
“Malaysia has all the ingredients to be a great place for startups. It is still early, and we have some catching up to do.”
While Hakim and the GridMarkets team try to help enterprises and institutions solve big problems through their platform, he advises prospective entrepreneurs to “find something you’re passionate about.” Quoting the late Apple founder Steve Jobs, he says everyone should try to “make a dent in the universe.”
GridMarkets will be pitching alongside nine other top-notch startups at our flagship event, Echelon 2013 this June 4-5. To see them make a dent in the universe, click here.
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