1. Amazon Instance Purchasing Options
On-Demand instances
Pay by hour
Reserved instances
Reserve for one month – one year
Consistent heavy use, lower hourly running costs
Spot instances
Bid for unused instances
Dedicated instances
Not mix with instances from other accounts
Dedicated hosts

2. Spot Instances Hourly price varies based on demand
Amazon EC2 can terminate an spot instance when the price changes or no unused instances available
m4.xlarge 4 13 16
EBS Only
$0.336 per Hour
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3. Cost Comparison Amazon Elastic Compute Cloud running Linux/UNIX
$0.168 per On Demand Linux m4.large Instance Hour
234 Hrs
$39.31
Total:
Amazon Elastic Compute Cloud running Linux/UNIX Spot Instances
m4.large Linux/UNIX Spot Instance-hour in Asia Pacific (Sydney) in VPC Zone #52
92 Hrs
$1.70
Total:
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4. Launch a Spot Instance
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5. Amazon Spot Instances – Concepts
Spot instance pool
Spot price
Spot instance request (or Spot bid).
Spot fleet—A set of Spot instances that is launched based on criteria that you specify.
Spot instance interruption.
Bid status
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6. Preparing for Instance Termination
Design fault-tolerant software
Store intermediate results to a persistent storage from time to time
Divide compute into small tasks or use check points
Make use of the 2-minutes notification time before instance termination to save states
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7. Pricing Strategy
Amazon does not disclose its underlying pricing policies other than stating the following:
“The hourly price for a Spot instance (of each instance type in each Availability Zone) is set by Amazon EC2, and fluctuates depending on the supply of and demand for Spot instances. ”
User satisfaction based resource management using demand based pricing[chen et al. 2011]
“Prices are typically not determined according to Amazon’s public definition of the spot pricing system. Rather, the evidence suggests that spot prices are usually drawn from a tight, fixed range of prices, reflecting a random reserve price that is not driven by supply and demand.” [O. A. Ben-Yehuda et al. 2013]
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8. Resource Management for Cloud Users
Infrastructure service offers different types of VM instances
Prices of VM instances change according to supply/demand
Price history of three instance types on Amazon EC2 (Linux, California, US, Jan 1 – Jan 15, 2011).
Instance type
CPU (core)
Memory (GB)
Storage (GB)
Small 1
1.7
160
Large 2
7.5
850
Extra Large 4 15
1690

9. Run Applications on Different Types of VMs
Deploying business service capacity on different types of instances produces performance differences
X264: Encoding 512-frame 1080p video streams
Postmark: IO transactions (1000 files, 5MB each)
Black Sholes:price European-style options in financial market
Instance type
X264
Postmark
Black Scholes
mean (s)
stdev
Small
402.9
4.9
153.4
8.8
943.4
5.9
Large
101.2
1.6
97.0
6.3
180.4
3.0
Extra Large
56.6
1.0
80.7
5.8
109.6
1.7