Amazon Gets Flexible Over EC2 Pricing

Darryl K. Taft covers IBM, big data and a number of other topics for TechWeekEurope and eWeek

Amazon has added flexibility to its pricing structure after launching an auction-style purchasing package for its EC2 cloud computing service

Amazon Web Services has announced a new flexible pricing option with Spot Instances, which gives users a new way purchase and consume Amazon Elastic Compute Cloud (EC2) compute resources.

With Spot Instances, customers bid on unused Amazon EC2 capacity and run those instances for as long as their bid exceeds the current Spot Price, Amazon officials said. The Spot Price changes periodically based on supply and demand, and customers whose bids exceed it gain access to the available Spot Instances.

Amazon said Spot Instances are complementary to On-Demand Instances and Reserved Instances, providing another way to obtain Amazon EC2 compute capacity. To get started using Amazon EC2 Spot Instances, click here.

“As customers continued to expand their use of AWS, they started asking if additional pools of capacity were available, even if only for a few hours at a time,” said Peter De Santis, general manager of Amazon EC2, in a statement. “Some customers were looking to reduce costs in exchange for being flexible as to when they run their application; others told us they were willing to pay more when they had urgent, high-volume needs. Because of the dynamic nature of supply and demand in the Amazon EC2 environment, we developed Spot Instances to let customers take advantage of our unused capacity while specifying a price they are willing to pay.”

Amazon officials said Spot Instances are particularly applicable to applications that can have flexible start and stop times such as image and video conversion and rendering, data processing, financial modelling and analysis, web crawling, and load testing. By being flexible on when their instances run, coupled with the ability to bid what they are willing to pay for capacity, customers can lower their Amazon EC2 costs, the company said.

In addition, Spot Instances can provide access to large amounts of additional capacity for applications with urgent needs. When these needs arise, users can specify a higher maximum bid, which will raise the priority of a request for capacity, Amazon officials said.

Moreover, to use Spot Instances, customers place a Spot Instance request, specifying the instance family, size and the region they desire as well as the number of Spot Instances they want to run and the maximum price they are willing to pay per instance, Amazon said. If a customer’s maximum price exceeds the current Spot Price, the customer’s instances will run until they choose to terminate the instances or their maximum bid falls below the Spot Price – whichever is sooner. Like other Amazon EC2 instances, Spot Instances can be terminated when they are no longer needed. If the Spot Price goes above a user’s maximum bid and the instance is terminated by Amazon EC2, the user will not be charged for any partial hour of usage.