It’s been interesting to see the amount of attention spot instances have been getting lately. Several cloud technology and service providers - including Amazon - have been offering them. The theory behind spot instances is that unused capacity from a service provider is offered up at a discounted rate. In some cases, you can bid on this capacity and name your own price. In others, the goal is to create a commodity trading platform so that when looking across providers, you can see the best deal for your VM instance. Of course the latter, more lofty goal does assume a high degree of interoperability between clouds to make it a reality (or as in today, one technology used in many clouds).
What I find interesting is not one of the customers I've spoken to has ever raised this as an issue or even asked about the concept – and I speak to a lot of customers, prospects and partners in the course of a week. It’s just simply not an item for discussion.
What does come up frequently however - and I think could be extremely more valuable - is the concept of being able to buy your virtual machines in a retail mode (per VM with hourly commits) and also a wholesale mode -- a bulk buy with some longer term commit. This is something Carpathia has been doing for a while and getting a lot of attention from our customers.
Let’s say that a majority of your infrastructure required a fixed amount of capacity, with just a few apps that truly require elasticity. It certainly makes sense to negotiate a discount for the infrastructure that is static and buy it using the wholesale model and gain some savings. Even with the low CPU hour rates out there, it still adds up, especially if you don’t switch off your VM’s. This also helps the service provider by allowing some degree of predictability from a capacity planning point of view and in turn allows us to provide greater discounts.
Maybe at some point, the value of wholesale purchases could be split by retail customers? Could we ever see GroupOn for cloud purchases? Now that would be an interesting prospect!
With that said I'm off to Costco to stock up on supplies for the holidays…