Amazon creates cloud computing spot market

Amazon on Monday rolled out spot pricing for cloud computing so customers can buy capacity at any price on the open market.

The concept is an interesting one since Amazon Web Services is making computing capacity available on the market just like any other commodity (see Amazon statement, Werner Vogels and Amazon Web Services blog).

Dubbed Spot Instances, Amazon customers can bid on unused Elastic Compute Cloud (EC2) capacity and run those instances as long as their bid exceeds the spot price. The rub is that you can be outbid.

In a statement, Amazon says Spot Instances "are well-suited for applications that can have flexible start and stop times such as image and video conversion and rendering, data processing, financial modeling and analysis, web crawling and load testing."

Amazon CTO Werner Vogels said on his blog:

The central concept in this new option is that of the Spot Price, which we determine based on current supply and demand and will fluctuate periodically...This gives customers exact control over the maximum cost they are incurring for their workloads, and often will provide them with substantial savings. It is important to note that customers will pay only the existing Spot Price; the maximum price just specifies how much a customer is willing to pay for capacity as the Spot Price changes.

Overall, the flexibility can save money, but you may not get a defined time---at your price---for a project to finish. Spot Instances allows you to define a maximum price you'll pay along with instance family, size and region. Spot Instances can be terminated when they are no longer needed.