Amazon Introduces Bidding For EC2 Compute Time

ryanvm alerts us to Amazon's beta announcement this morning for what it is calling Spot Instances, which represent a name-your-own-price way of using the elastic compute service. Here is Amazon's documentation on the feature. "For customers with flexibility in when their applications can run, Spot Instances can significantly lower their Amazon EC2 costs. Additionally, Spot Instances can provide access to large amounts of additional capacity for applications with urgent needs." Customers can use the EC2 API to see recent spot prices.

Re:Permutation city

[afidel]

In short scale Quadrillion is only peta, so we are very much there today with the largest computers being able to do quadrillions of floating point operations per second let alone integer. Not sure if worldwide processing power is yet to the yotaflops scale though I suspect we probably aren't far off.

Re:Indictment of cloud computing?

[fuzzyfuzzyfungus]

I suspect that we'd have to watch the prices pretty closely to find out.

Variable pricing(down to the point where electricity costs make it cheaper to just turn them off and suck up the losses, of course) is completely logical for dealing with any unused capacity, and it can't have cost Amazon all that much to hack this pricing scheme into their existing system.

If there is usually some capacity available, with a small discount in exchange for having no availability guarantee(or even implication), with occasional chunks of cheap time, then it is probably just an expected side effect of the fact that "cloud" demand(like a fair bit of classic datacenter demand) is somewhat bursty. If there is constantly capacity available at 20 cents on the dollar, well, then Amazon would seem to have a bit of a capacity problem...

Re:Indictment of cloud computing?

[enoz]

In order for EC2 capacity to be highly available (I haven't yet heard of people waiting in a queue for hours for an instance), it seems obvious that Amazon must have a large amount of computing power in standby.

This process of auctioning off the extra processing power based on fluctuating capacity seems like a win-win situation for Amazon AND users. Users who want increased processing, but are not time-bound, can get "off-peak" rates. Meanwhile Amazon can make money off the "idle" processors which are still available to be reserved as an EC2 instance.

Re:Instance creation?

[Anonymous Coward]

Initially when you get your EC2 account, it is limited to 20 concurrent VMs. You then have to request to have this limit increased, but the same pricing applies (at least up to 200 concurrent VMs)

Having accounts limited to 20 VMs means that a single user can't sign up and start to flood the system. Also they make no guarantees that a request to start up a VM will succeed unless you have a reserved instance, which has a yearly cost attached.

What this spot pricing does is provide a financial incentive for customers to move load to off peak times rather than adding to the load during peak demand. This in turn should flatten out the load on EC2 (depending on how much load can and will be moved to the off peak times).

In the end this is simple supply and demand economics, and a lot of people in academia have been carrying on about this and a "cloud marketplaces" for quite some time...

Re:Indictment of cloud computing?

[afidel]

OK, they fire me, who's going to setup, configure, and maintain the cloud VM's? Oh, that's right they still need someone to do that.... There is no magic pixie dust despite what IBM and PHB's would like to think, companies need digital janitor's to feed and care for the complex machines that run the company and that's exactly what I do. If you are smaller than Amazon or Google and you have someone who spends most of their time worried about the physical infrastructure then they are doing something terribly wrong.