Jan 30, 2015

What is AWS spot pricing and how does it work?

What is AWS spot pricing and how does it work?
Just FYI that if you're looking to save some money by using spot instances instead of the higher-priced on-demand instances then another option to explore is reserved instance pricing. RIs come with a commitment to use - and pay for - the VM for a certain amount of time (months or years). But by doing so, AWS will give you what can sometimes be a substantial discount.
David has the right answer for this, but here's a link to the AWS site in case you need it later:

You might have heard about spot pricing when people talk about how crude oil is sold on world markets: this is the price for a barrel of oil at a particular moment (right now) in time, which is different from when you purchase a longer-term contract.

Now the cloud has come to spot pricing too. AWS is the first to implement such a thing. Here is how it works. You submit bids for spare EC2 instances at the price of your choice for an hour of compute time. The bid includes the price that you are willing to pay to use the instance for an hour. When your bid price exceeds the current spot price and AWS has the available resources, your instance is mounted and run. If not, your request is denied. You might want to look at the pricing history and other details here before you submit a bid:

We'll see if it catches on. You could lower your compute bills for non-critical jobs by using it carefully.
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