Uncommon Wisdom

Dec 15 2009   1:09PM GMT

Amazon introduces EC2 open market pricing for excess cloud capacity

Tom Nolle Tom Nolle Profile: Tom Nolle

Amazon has announced something totally new and potentially game-changing in cloud computing —spot pricing. Amazon’s Spot Instances will allow Amazon Web Services (AWS) customers to bid on Elastic Compute Cloud (EC2) excess capacity and buy it at any price on the open market. The bid will be good as long as the current “spot price” remains less than or equal to the bid amount.

This would be a way of getting the lowest possible cost for capacity for applications with discretion in their schedule. It might also be a very nice way of promoting normal EC2 services by offering customers a low buy-in threshold that would at some point “expire”, thus encouraging them to bid up toward the normal price. For Amazon, the notion could help the company build up its EC2 capacity without risking a major dip in ROI if it can’t be sold at list price.

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