AWS Amazon EC2 Spot pricing

Question

I'd like a non-amazon answer to this quandry...

It looks like, via spot instance pricing, you could run an instance for 22 or 23 cents an hour, for as many hours as you want, because the historical charts for hours/days/months show the spot price never goes over 21 (22?) cents per hour. That's like half of the non-reserved instance cost for the same sized instance and its even less than a reserved instance would ever work out to be per hour. With no commitment.

Am I missing something, do I have a complete and total misunderstanding of the spot/bid/ask instance mechanisim? Or is this a cheap way to get an 24/7 instance while Amazon has a bunch of extra capacity?

Jeremy

Answer 1

No, you are not missing anything. I asked the same question many times when I first looked at Spot, followed by "why doesn't everyone use this all the time?"

So what's the downside? Amazon reserves the right to terminate a Spot instance at any time for any reason. Now, a normal "on-demand" instance might die at any time too, but Amazon goes to great efforts to keep them online and to serve customers with warnings well in advance (days / weeks) if the host server needs to be powered down for maintenance. If you have a Spot instance running on a server they want to reboot ... they will just shut it off. In practice, both are pretty reliable (but NOT 100%!!), and many roles can run 24/7 on spot without issues. Just don't go whining to Amazon that your Spot instance got shut off and your entire database was stored on the ephemeral drive... of course if you do that on ANY instance, you are taking a HUGE (and very stupid) risk.

Some companies are saving tons of money with Spot. Here's a writeup on Vimeo saving 50%, and one on Pinterest saving 60%+ ($54/hr => $20/hr).

Why don't more companies use Spot for their instances? Many of the companies buying EC2 instance hours aren't very price sensitive and are very very risk-adverse, especially when it comes to outages and to operational events that sap engineering effort. They don't want to deal with the hassle to save a few bucks, especially if AWS fees aren't a significant cost-center versus personel. And for 24/7 instances, they already pay 1/2 price via "reserved instances", so the savings aren't as dramatic as they seem versus full-priced "on-demand" instances. Spot isn't fully relevant to large customers. You can be nearly certain that when a customer gets to be the size of a Netflix, they 1) need to coordinate with Amazon on capacity planning because you can't just spin up 1/2 a datacenter on a whim, and 2) getting significant volume discounts that bring their usage costs down into the Spot price range anyways. Plus, the first tier of cost cutting is to reclaim hardware that isn't really needed; at my last company, one guy found a bug where as we cycled through boxes we would "forget" about some of them and shutting that down saved $100+k / month (yikes). Once companies burn through that fat, they start looking at Spot.

There's a second, less discussed reason Spot doesn't get used... It's a different API. Think about how this interacts with "organizational inertia" .... Working at a company that continuously spends $XX / hr on EC2 (and coming from a company that spent $XXXX / hr), engineers start instances with the tools they are given. Our Chef deployment doesn't know how to talk to spot. Rightscale (prev place) defaulted to launching on-demand instances. With some quantity of work, I could probably figure out how to make a spot instance, but why bother if my priority is to get role XYZ up and running by tomorrow? I'm not about to engineer a spot-based solution just for my one role and then evangelize why that was a good idea; it's gotta be an org-wide decision. If you read the Pinterest case-study I linked above, you'll notice they talk about migrating their whole deployment over from $54/hr to $20/hr on spot. Reading between the lines, they didn't choose to launch Spot instances 1-by-1; one day, they woke up and made a company-wide decision to "solve the spot problem" and 'migrate' their deployment tools to using Spot by default (probably with support for a flag that keeps their DB instances off Spot). I can't imagine how much money Amazon has made by making Spot a different API instead of being a flag on the normal EC2 API; Hint: it's boatloads .. as in, you could buy a boat and then fill it with cash until it sinks.

So if you are willing to tolerate slightly higher risk and / or you are somewhat price-sensitive ... then, yes, you absolutely can save a crapton of money by running your service under Spot 24/7.

Just make sure you are double-prepared to unexpectedly lose your instance (ie, take backups) .... something you ALREADY need to be prepared for with an "on-demand" instance that doesn't have 100.0% uptime either.

Think of it this way:

Instead of getting something 99.9% reliable, you are getting something 99.5% reliable and paying half-price

(I made those numbers up to convey the idea, but they probably aren't too far off from the truth).