Monday, January 11, 2010

Pricing Models: Amazon Spot Instances - a Sign of Things to Come ?

I saw that Amazon Web Services (AWS) just announced a new feature of their highly successful Cloud offerings (I say highly successful - at least AWS is the poster child for cloud computing right now - not sure how much money they are making off it)

However - they announced a new option for purchasing and consuming Amazon Elastic Compute Cloud (EC2) compute resourced call Spot Instances.

This feature enables customers to bid on excess unused Amazon EC2 capacity and use those instances for as long as the "bid" exceeds a derived dynamic Spot Price. This Spot Price is based on supply and demand and does change - when a customers bids exceed the spot price they gain access to available Spot Instances. This compliments existing purchase features on AWS EC2 - such as Compute Futures - where you can reserve future compute capacity.

My sense is that today these features are more of a gimmick than and legitimate way of purchasing - but it is is definitely the sign of things to come and a leading indicator of the ultimate and eventual  commoditization of compute and storage resources - just like the commodiitzation of electricity at the turn of the 19th century (See Nicholas Carrs great "The Big Switch" for more on this analogy)

More here at Amazon AWS

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