Amazon to auction spare cloud capacity

Natalie Apostolou
telecomasia.net

In an IT industry first, Amazon has launched a spot market to sell off excess capacity on its EC2 platform.

The company has started the beta version of Spot Instances, which lets customers bid for and buy capacity at prices set by demand and availability.
 
In a blog post, Amazon CTO Werner Vogels said “as far as I know, [this] has no equivalent in the IT industry.”
 
He said the market was possible by the enormous economies of scale of Amazon’s infrastructure services. 

He said customer-managed pricing would “make new areas of computing feasible for which the economics were previously unfavorable.”
 
“Customers bid any price they like on unused Amazon EC2 capacity and run those instances for as long their bid exceeds the current Spot Price.”
 
He said the auction pricing would give customers tight control over the maximum cost they incur for their workloads.
 
The auction platform would suit EC2 customers with non-mission critical workloads on a flexible timetable, Vogels said.
 
These could be incidental tasks such as the analysis of a dataset, or massive tasks such as media conversion from a Hollywood's studio's movie vault, or web crawling for a search indexing company.

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