New Amazon Cloud Pricing Signals Market Shift

Amazon’s has introduced a new pricing model for its Elastic Compute Cloud (EC2). The pricing option, know as “Spot Instances,”  allows users to bid what they wish for CPU cycles — but if someone else is willing to pay more, you’re out of luck. The Amazon strategy is worth noting for VARs and MSPs alike. Here’s why.

“Spot Instances allow customers to bid on unused Amazon EC2 capacity and run those instances for as long as their bid exceeds the current Spot Price,” says the official Amazon announcement. “The Spot Price changes periodically based on supply and demand, and customers whose bids meet or exceed it gain access to the available Spot Instances.”

If you’re already running an instance, you will apparently also have the option to expand your processing capabilities using the Spot Price, according to the same rules. This will obviously result in peak usage times and drop-offs, but conversely, it means that if you don’t want to pay the going rate for time on EC2, you no longer have to.

This raises an interesting question for resellers developing cloud applications: Do you really need on-demand access, or can you afford to keep your purse strings drawn and pass the savings on to your clients? Moreover, is it worth the hassle of having to save your work constantly if your instance can be interrupted with no notice? Time will tell, but Amazon’s making a bold move into pay-what-you-wish with this announcement. We’ll be keeping an eye on them, rest assured.

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