As reported on CNET, Amazon Web Services has announced a new pricing option that lets its customers take advantage of spare capacity within the EC2 infrastructure at variable, supply-and-demand-driven pricing.
The news has taken the cloud community by storm. For some, it represents the beginning of a long-anticipated move to market pricing for core IT infrastructure services.
(Credit:
Wikimedia Commons)
While there is some truth to the importance of AWS spot pricing to the history of cloud computing, let's keep things in perspective: this pricing is set by Amazon, not any market. We are a long way from a true commodity market for any form of cloud computing service.
Before I go any further, let's review how the feature works:
Each customer sets a maximum price he or she is willing to pay for "spot instances."
Amazon sets a "spot price" for instances hour-by-hour, based on available supply and demand.
Customers pay whatever the spot price is up to their maximum price. So, if someone bids $0.07/hour, and the spot price is $0.05/hour, the person pays $0.05/hour.
If the spot price exceeds the customer's maximum price, the customer's instances are terminated.
Spot pricing is the third EC2 pricing option, joining existing on-demand and reserved instance options. The first two options targeted two critical-use cases for cloud computing: reserved instances for mission-critical apps where capacity must always be available to meet demand, and on-demand pricing for just about everything else.
However, the success of both options likely left Amazon with a big problem: excess capacity. The success of reserved instances means that Amazon has to keep around enough capacity to guarantee that it can handle any spike in demand that might come along. The success of on-demand pricing means that Amazon has to build out new capacity fast enough to stay ahead of the voracious demand curve.
So, what to do? Enter spot pricing. Amazon's new pricing is an incredibly creative way to encourage consumption of unused data center capacity, by providing that capacity at clearance sale prices on the condition that Amazon can take it back at a moment's notice. For the right kind of applications, it's a true win-win situation.
Why not profit from what would otherwise be a liability?
Note, however, that this feature is not market-based pricing. Amazon determines the spot price and can raise that price enough to gain back capacity at will, at no real cost to itself. There is no competition. There is no commoditization. There is just consumption of what is not being used.
The truth is, real commoditization of infrastructure services--or any other cloud service, for that matter--isn't in the best interest of Amazon or any other service provider.
Regardless, commoditization can't happen without open standards that allow easy portability and interoperability of data and code, as well as security, control, service-level assurance and compliance systems. Those standards are coming, but it is impossible to predict when they will arrive. I only hope Amazon embraces them when they do.
In the meantime, we can watch with admiration how the success of Amazon Web Services allows it to explore the future of IT with the enthusiastic help of a customer base that truly benefits from each success. I can't wait to see how customers choose to take advantage of spot pricing.
On their blog today, Rackspace's cloud division, Mosso, shows off a study they did where they compared the costs and performance of Amazon Web Service's S3 storage service and CloudFront Content Delivery Network (CDN) against Mosso's combination of CloudFiles and their partnership with CDN provider, Limelight Networks. The blog post presents five common use cases, and compares the cost of CloudFiles/Limelight with the Amazon offerings, both with and without Amazon's support option.
I spent some time on the phone yesterday with Mosso co-founder, Jonathan Bryce, and Senior Cloud Architect for Rackspace's cloud division, Erik Carlin, discussing what they found. The short-short version is that, for the five use cases they analyzed, they claim (not surprisingly) that Mosso beats Amazon's offerings in simplicity, cost and performance, especially when support is taken into account.
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The original title of this post was going to be "Why isn't Google App Engine successful?" You see, I've been frustrated of late at the lack of followup press about the PaaS offering since Google's announcement about it last April. I was beginning to think that no one but a few Facebook application providers were using it, which makes it kind of irrelevant for the enterprise.
Compare Google's coverage to that of Amazon Web Services. Since its announcement in July 2002, the various services contained under the AWS umbrella have received a steady stream of press and accolades. Much of that is due to marketing (and the phenomenal technology evangelism program Amazon put into place), but part of it is also that successful start-ups are passing on their own success stories independent of Amazon.
Two quick examples of this are SmugMug and Animoto. Both are stories that were originally broadcast by the customers themselves, and then evangalized by Amazon. Almost everyone in the "cloud-o-sphere" knows about these guys as a result. In fact, Animoto's story is the most prevalent case study of the value of elasticity in Web applications today.
So, where is the Google equivalent? I've heard about a few Facebook widgets being developed on App Engine (and that is sort of cool), but I certainly haven't heard any other type of start-up trumpet the importance of App Engine to their success. Furthermore, there are zero examples of non-Web businesses using App Engine to change the nature of their IT processes. (See Eli Lilly's story for an AWS counterpoint.)
So, all of this might lead you to believe I'm anti-App Engine, or at least not confident that it is important except as a PaaS example. And until yesterday, you would be right. However, I spent the day yesterday at the Cloud Connect conference, hosted at the Computer History Museum in Mountain View, Calif. Google was much more visible here (in part because they were a "platinum sponsor"), and perhaps more importantly, the "how to" sessions they hosted Wednesday afternoon were packed by interested developers and technologists.
... Read moreRandy Bias, chief technology officer of ServePath cloud offering GoGrid, penned a post recently that raises an interesting distinction within the once uniformly defined infrastructure-as-a-service space.
To briefly recap the cloud market for context, commercial cloud computing has traditionally been seen as consisting of three distinct offerings:
- software as a service (SaaS): Complete application systems delivered over the Internet on some form of "on-demand" billing system. Examples include Salesforce.com, WebEx, and Workday.
- platform as a service (PaaS): Development platforms and middleware systems hosted by the vendor, allowing developers to simply code and deploy without directly interacting with underlying infrastructure. Examples include Google AppEngine, Microsoft Azure, and Force.com.
- infrastructure as a service (IaaS): Raw infrastructure, such as servers and storage, is provided from the vendor premises directly as an on-demand service. Examples include Amazon Web Services, GoGrid, and Flexiscale.
What Randy is arguing, however, is that there is a clear distinction between the service ecosystem approach of Amazon Web Services (which he calls an infrastructure Web service) and a more utilitarian infrastructure-focused cloud service such as the ones many of the hosting companies-turned-cloud providers have produced, including GoGrid, Flexiscale, and Rackspace CloudServers. He calls those companies providers of "cloud centers."
... Read moreMike Culver, technology evangelist for Amazon Web Services, on Thursday announced the availability of a Web-based AWS management console.
This first release, focused on its Elastic Compute Cloud, provides a laundry list of supported functions, including:
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There has been significant discussion over the short life of the term "cloud computing" about how little it differs from concepts like managed hosting and ASPs. And there is some truth to these observations; if you really look closely, what are the key differences between EC2 and a more traditional managed hosting provider? Some would say multi-tenancy, self-service and pay-per-use (including billing and elastic capacity). With specific regard to EC2, I would tend to agree.
(I would also hasten to point out that Amazon provides some very PaaS-like services in conjunction with EC2, such as Simple Queuing Service (SQS) and SimpleDB.)
However, if this is the great "paradigm shift" of cloud computing, as offered by smart people like Krishnan Subramanian of CloudAve, then let me offer that these basic extensions to existing hosting models will be peanuts next to a shift that will create one of the most significant market opportunities since the explosive growth of the Internet itself. I'm not dealing in hyperbole here; I honestly believe that there is a clear evolutionary step to the cloud occurring well after stand-alone self-service clouds are mainstream (which they arguably are today) that will inspire massive innovation.
That game changing technology disruption will be the federation of disparate clouds, and the distribution of software, data and billing across commercial and private cloud boundaries. In other words, the introduction of secure, reliable workload mobility in an extension of the Internet itself--an "Intercloud", so to speak.
... Read moreCongratulations to Werner Vogels, the now legendary CTO of Amazon and one of the principle drivers of the Amazon Web Services vision. InfoWorld announced Sunday that Werner earned its CTO of the Year award. The accolades are rolling in from all over, but I think all agree that this was a well-deserved recognition for Werner and his team. In fact, Werner's recognition of the team effort that led to this award just makes him that much more of a class act.
What leaves me shaking my head, however, is that it took this long to see the incredible feat that Amazon pulled off, and the leadership that pushed a retail goods company to see compute capacity as a logical extension of their business.... Read more
Amazon today used the Le Web 3 conference as an opportunity to announce the availability of EC2 in the European Union, along with several associated services. Details are available from the Amazon Web Services blog:
We've created a new region for Europe, separate and distinct from the existing region in the United States. For fault tolerance, data separation, and stability, each EC2 region is an entity unto itself; issues within one region won't affect the other one. This means that Amazon Machine Images (AMIs), security groups, and SSH keypairs must be created anew in each region. We're working on tools to make it easy to move this information between regions. Also, as we learn more about how customers use multiple regions, we will add APIs to make it even easier for them to do so.
With the exception of support for Microsoft Windows and for Amazon DevPay (both of which will be ready before too long), every feature of EC2 is available in the new region, including Elastic Block Storage and Elastic IP Addresses.
This announcement would actually be rather boring if it weren't for the importance of the EU's privacy regulations on cloud computing.
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