Your Spot instance is launched when your bid exceeds the current Spot market price, and will continue run until you choose to terminate it, or until the Spot market price exceeds your bid. The Spot price fluctuates based on the supply and demand of available EC2 capacity. Spot instances let you bid on spare Amazon EC2 instances to name your own price for compute capacity. The Spot price, or the hourly cost of running a Spot instance, is specific to each instance type and availability-zone and is decided by Amazon's secret algorithm which factors in supply and demand of this spare compute power. They sell any excess compute power for ridiculously low hourly rates - usually 80% - 90% off the on-demand price for each supported instance type (not all instance types are available as Spot instances). Spot instances are Amazon's solution to this problem - it is essentially a stock market for spare compute power. Imagine you had to file in a request for on-demand instances and wait a few hours until AWS manually plugged in and provisioned more physical servers in its data centers to fulfill your request! That wouldn't be much fun. There will always be spare compute power in the AWS cloud, waiting for clients to utilize it.

This creates a situation where tons of EC2 compute power is being actively wasted - physical servers just sitting there doing absolutely nothing, wasting precious resources and money for Amazon (electricity / hardware / cooling / etc), as they wait for clients to utilize them by starting up on-demand instances. Since AWS will probably always be ready to grant you your on-demand instances when you need them, they have to provision the hardware in advance and keep it running to support your request in a moment's notice. They need to be prepared for when their clients decide they want to spin up 1,000 m4.large instances within a few minutes time, without any notice in advance. Why does AWS offer the same underlying hardware for much less, without any upfront payment? Here's why.ĪWS provisions millions of physical servers in advance for their on-demand EC2 instance service. Also, they are not a new type of offering - they actually exist for quite some time now, and yet, most AWS customers still don't take full advantage of them. Their name is a bit misleading - they are pretty much regular EC2 instances, but simply priced much lower (usually), up to 90% off the on-demand price, and with different life expectancy. Whether you utilize Reserved Instances or not, there's another nifty trick you can take advantage of to get up to 90% discount on the on-demand EC2 instance price, without paying anything in advance!Įven if your organization doesn't seem to care about optimizing the AWS monthly bill, I'm sure they'd appreciate the huge savings you could harness by utilizing Spot instances correctly! You might even be able to convince the management to organize a company-wide recreational day with the money you save on the monthly AWS bill. But this pricing model isn't applicable to most startups and small businesses as they may shut down abruptly in a moment's notice. If your organization knows it'll be around for years to come, you've probably already purchased Reserved Instances to attempt to lower the cost (by paying in advance for instances which leads to up to 75% cost reduction, depending on how long you pay in advance for). Is the majority of your AWS monthly bill made up of thousands of on-demand EC2 instance hours, steadily increasing month by month?

Save up to 90% on Your AWS Bill with Spot Instances Jul 1, 2016

Ec2 pricing history