01-02-12 | Blog Post

$999/Hour for An Amazon Cloud Server?

Blog Posts

Would you pay $999 per hour for a cloud server? Apparently, Amazon’s EC2 cloud servers spiked to $999.99 per hour when their supply was recently constrained.  The high bidder paid close to $1000 per hour and others got bumped off of their servers.

One month’s use of the server at this price would cost a ridiculous $729,992.70 – more than the cost to purchase an entire mainframe and host it in a high-end data center for 5 years. Admittedly, it is a far-fetched scenario for the spot demand for Amazon cloud servers to stay that high for an entire month, but it raises some interesting questions about the predictability and usability of the Amazon cloud.

I found this discussion thread on the Amazon Cloud forum to be both informative and puzzling.

This left me with a couple of takeaway points:

  1. The Amazon cloud isn’t as straight-forward to use as mission critical cloud servers that companies like Online Tech offer.  To use Amazon, you have to design your software around their architecture, availability zones, etc.
  2. The basic on-demand model charges by a complex set of computation factors such as CPU clock hours, I/O requests, API requests and others – all of which are very difficult to predict in an application.  Amazon posted this slide deck to encourage you to “model, measure, monitor, multiply and master”- the cost model associated with the Amazon cloud. Looking at the slide deck had me walking away less confident that I was able to model the pricing without an engineering investment to figure it out.
  3. While the on-demand model is complex enough, the spot market pricing for Amazon EC2 instances is even less predictable, as the forum post discusses.

At the end of the day, it’s difficult to be convinced that this is truly “spot market” pricing when only one party controls the supply side of the market. I’m left with the feeling that playing the spot market for Amazon cloud servers is like gambling against the house – only one party is truly in a position to win.

While this may sound like I’m slamming Amazon as a competitor, the reality is that we rarely compete.  Amazon has different goals, market and business plan for their cloud servers than we do. Users design to the Amazon cloud to leverage the automation capability, and thus need to buy into their system architecture. Clients leverage our easy-to-use, high availability cloud servers for mission critical applications that they want to run over the long haul.

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