Amazon Auctions Cloud Computation

Amazon on Monday began offering its Amazon Elastic Compute Cloud (EC2) customers the chance to bid on unused computing capacity.

The new purchasing model, called Spot Instances, allows Amazon Web Services (AWS) customers to place bids for computing power and have their jobs processed if their bid exceeds the fluctuating "Spot Price."

"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," explained Amazon CTO Werner Vogels in a blog post. "If the maximum price a customer has bid exceeds the current Spot Price then their instances will be run, priced at the current Spot Price. If the Spot Price rises above the customer's bid, their instances will be terminated and restarted (if the customer wants it restarted at all) when the Spot Price falls below the customer's bid. This gives customers exact control over the maximum cost they are incurring for their workloads, and often will provide them with substantial savings."

Vogels said that bids higher than the Spot Price are only charged at Spot Price rate.

Jeff Barr, Amazon Web Services evangelist, explains in a blog post that Spot Instances can be particularly useful for low-priority work that can be deferred until computing demand and price are low.

EC2 continues to offer two other pricing methods: On-Demand Instances, which are charged at a published rate, and Reserved Instances, pre-paid at a discounted rate for use up to three years later.

Typical jobs for EC2 involve analyzing data sets, media file format conversion, or Web crawling for a search index, for example.

Pharmaceutical giant Pfizer has been using AWS -- EC2 and other services like S3, SQS, and SimpleDB -- to model antibody behavior.

"The AWS stack is fast becoming a first choice by BioTeam for cost-effective virtual infrastructure and high-performance computing on-demand," said Adam Kraut, a scientific consultant with BioTeam who helped implement AWS for Pfizer, in a May blog post.

Amazon's pay-as-you-go computing model "makes the grant process used by national supercomputing centers look arcane and downright stifling," he said.