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Does Amazon's Instance Hit the Spot?

Doug's still out, so covering once again is Jeff Schwartz.

Amazon this morning said it's testing a new service called Spot Instances that will let customers and developers apply the auction model to acquire capacity.

In a nutshell, here's how it works: Amazon will let those with non-mission-critical tasks bid for available capacity residing on Amazon's EC2 service. Spot Instance prices can fluctuate depending on supply and the demand for capacity at the time a bid is placed. The customer must place a request specifying the region, instance type, number of instances and the maximum price he or she is willing to pay per instance in a given hour.

To help customers determine how much to bid, they can use the EC2 API and AWS Management Console to see prior Spot Instance prices.

Pund-IT analyst Charles King gives a good analogy, comparing the Amazon service to an eBay auction. "Choosing the 'Buy It Now' option usually costs more but it also ensures that you get the product you want," he said. "If certainty of price or timing isn't a big deal, participating in auctions can result in excellent deals."

Meanwhile, Ovum analyst Tony Baer questions whether this will be used strategically by enterprises. "The whole idea here is cloud computing is a commodity," he said. "You are getting what you pay for. This is raw cloud."

In more Amazon news, the company last week announced that its EC2 service now supports Windows Server 2008 and SQL Server 2008 Standard Edition. Previously, EC2 was limited to Windows Server 2003 and SQL Server 2005.

Do you see yourself using the auction model for lower-cost cloud services? Would you like to see Microsoft offer auction-based capacity with its Azure cloud service, which is due out next month? Drop me a line at jschwartz@1105media.com.

Posted by Jeffrey Schwartz on December 14, 2009 at 11:53 AM