Dear Tino Tereshko — I do like the simplicity approach, but wonder whether a flat 80% discount…
Saif Ahmed

Hello Saif,

I agree with the premise that in a fully-transparent and frictionless market, forces of supply and demand meet at the most efficient point, maximizing value for both parties (or at least for the system in aggregate).

However, there’s a number of friction points in play here with Spot Instances:

  • Per-hour billing granularity
  • High number of instance types prevents commodization of asset down to its raw qualities of CPU, RAM, network, etc.
  • Ephemeral non-guaranteed nature of assets
  • Volatility of supply and demand
  • Volatility of pricing.. averages look great, but highs can be very high.

It’s telling that there is a thriving ecosystem trying to smooth out Spot Instance markets.

You are also operating under the assumption that Preemptible VMs suffer from low availability and have large contention on demand side.

So yes, while Preemptible VMs aren’t hyper-efficient in terms of distributing value, they’re simple and predictable. You know what you’re getting, and our clients tell us that’s pretty important.

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