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Amazon EC2 Opens Risky Spot Instance Auction

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Amazon EC2 Opens Risky Spot Instance Auction

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It's the holiday season and with the rush of online customers Amazon.com must maintain a large server footprint.  Increasing capacity is no problem for Amazon's EC2, but what happens to all that capacity for the other eleven months of the year?  Amazon simply offers access to the storage and virtual hardware that's not being used on the EC2.  Recently, Amazon introduced a new way for customers to buy those unused resources at bargain prices.  Customers can now bid on Spot Instances and run those instances as long as their bid exceeds the current Spot Price.  

While Spot Prices are probably expensive now when shopping sites need every ounce of capacity they can get, the price probably will go down when there's less demand and more supply.  This gives an advantage to a small site, for example, that suddenly gains popularity with the latest product or meme.  The company can run some new compute-intensive tasks on Amazon's service and avoid building and supporting an expensive cluster that might otherwise be necessary.

Amazon's Spot Instance system provides a variety of tools for users to refine their bids. They can set preferences for a geographic location, concurrent jobs, time limits on bids, and more.  Price history will also be available soon, allowing users to research bidding trends.  However, the system isn't good for server tasks since there's no way of knowing when a job will launch.  Spot Instances are geared more towards compute capacity.

Amazon is allowed to pull the plug on any job if the bid falls below the spot price upon recalculation.  If you plan on using Spot Instances, Amazon recommends that you save state often in case your instance is terminated.  By ending customer jobs as the demand for capacity increases, Amazon frees up more resources for itself during boom times.  Customers just have to accept the risk associated with lower prices.

Here is a comparison of Reserved Instance pricing and On-Demand Spot Pricing:

Mixing Spot Instances in conjunction with Reserved Instances (at the other end of the spectrum) can mean big savings for enterprises.  They just have to be careful with the newer, riskier Spot Prices.  The Spot Instances system is currently in beta, but it is available to anyone with a Amazon Web Services account. 

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