Amazon has taken a page from fellow Web juggernaut eBay.
The Internet retailer, which recently got into the cloud computing space with Amzon EC2, has announced a new service that will allow customers to bid on unused server and storage capacity. Amazon's EC2 "Spot Instances" service effectively takes eBay's auction/bidding model and applies it to cloud computing. But how exactly will the bidding work? And is this service too risky for customers?
With Amazon's EC2 "Spot Instances," customers can use the capacity as long as their bid "exceeds the current Spot Price." According to Amazon, "[t]he Spot Price changes periodically based on supply and demand, and customers whose bids meet or exceed it gain aceess to the available Spot Instances. Spot Instances are complementary to On-Demand Instances and Reserved Instances, providing another option for obtaining compute capacity. If you have flexibility in when your applications can run, Spot Instances can significantly lower your Amazon EC2 costs. Additionally, Spot Instances can provide access to large amounts of additional capacity for applications with urgent needs."
Okay, it looks a little murky. Amazon tries to clear it up. Basically, if you're a small or medium-sized Web site that's launching a new feature that will bring in more traffic, you can bid on the virtual hardware needed to keep your site running at peak times without having to commit to those cloud computing services for longer periods of time than you need. The bidding process sounds complicated, but Amazon explains it on the Spot Instances home page:
"Let’s assume you decide to place a Spot request for one Standard Small (m1.small) instance in the US East – Northern Virginia Region. You can see from the Spot Price history in the AWS Management Console or by using the Amazon EC2 API that the Spot Price has recently fluctuated about every 1-2 hours between $0.030/hr and $0.060/hour, and is currently $0.050/hr. You decide you want to bid a maximum price of $0.045/hr. You create your request by using the AWS Management Console or making a request through the Amazon EC2 API. Because your maximum price is less than the current Spot Price, no instance is launched and your request remains in a pending state.
"Two hours later, the Spot Price drops to $0.045/hr. At this point, your request may or may not start running. This is because your maximum price exactly equals the current Spot price and there may be more requests at this price than can be fulfilled. Let’s assume your instance does not start. Thirty minutes later, the Spot price drops to $0.039/hr. Because this is below your maximum price, a Spot Instance will soon be launched and you will expect to pay $0.039/hr for the instance’s first complete hour."
Amazon's Spot Instances is certainly a bold move, considering cloud computing is still in its infancy and Amazon itself has had some high profile issues with EC2. Just recently, a password-stealing botnet was discovered in Amazon's cloud (it inflitrated EC2 through a poorly protected cloud customer). Around the same time, Amazon suffered a major data center outage that crippled EC2 -- and sadly, the culprit was nothing more than the failures of just two power supplies in Amazon's mammoth data center in Northern Virginia.
But on its face, Spot Instances could have appeal to customers seeking flexibility and quick fixes for their computing needs. So let the bidding begin....
Channelweb Connect: FUDWatch: Amazon Introduces Bidding System For Cloud Services
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