Ultimate Guide to Spot Instances on AWS, Azure, and Google Cloud

What Are Spot Instances?

Spot instances are a type of cloud computing resource available at steep discounts compared to traditional on-demand rates. They represent unused computing power that a cloud service provider wants to sell off at a lower price to ensure maximum utilization of its resources.

Learn more in our detailed guide to spot instances vs on demand.

Spot instances are unique as they work on a bidding model. Companies bid for these instances, and when the bid is higher than the current spot price, they get the instances. However, these instances can be taken away when the spot price goes up beyond the bid price—the instances are then shut down with advanced notice of a few minutes or seconds (depending on provider).

Due to the short-lived nature of spot instances, they were traditionally used for applications that are fault tolerant or insensitive to disruption (for example, batch jobs). However, with automation and advanced cost optimization technology, it is possible to use spot instances even for mission critical applications.

This is part of an extensive series of guides about IaaS.

In this article:

Benefits of Using Spot Instances
Spot Instances on Different Cloud Providers
Spot Instances Pricing vs. Other Pricing Models
Suitable Use Cases for Spot Instances
Strategies to Optimize the Use of Spot Instances

Benefits of Using Spot Instances

Cost Savings

Cost savings are one of the most significant benefits of using spot instances. Spot instances can offer savings of up to 90% when compared to regular on-demand instances. This is because cloud service providers would rather rent out their spare capacity at a lower price than let it remain idle. It is an opportunity for cost-conscious businesses to leverage high-capacity instances at a fraction of the cost.

The fact that you only pay for what you use makes spot instances even more attractive. If your spot instance is terminated by the provider, you won’t be charged for the partial hour of usage.

Scalability

Spot instances offer high scalability, at least in some situations. Since they are based on unused capacity, there are often large amounts of spot instances available. This means businesses can scale their operations up or down quickly, depending on their needs.

Scalability is especially crucial for businesses with variable workloads. For example, a retail website may need extra capacity during a significant sale event like Black Friday, and spot instances can provide this additional capacity at a lower cost. After the event, the company can simply release these instances, ensuring they only pay for what they need.

Flexibility

Flexibility is another crucial benefit of spot instances. Businesses have the freedom to choose when they want to run their workloads, which instance type to use, and how much they are willing to pay. This flexibility can help businesses optimize their costs even further.

For instance, a business could choose to run non-urgent workloads during off-peak hours when spot prices are typically lower. Moreover, businesses are not locked into a contract and can start or stop using spot instances whenever they want.

Spot Instances on Different Cloud Providers

Amazon Web Services (AWS): Spot Instances

Amazon Web Services (AWS) was one of the first cloud providers to introduce the concept of spot instances. AWS Spot Instances allow you to bid on spare Amazon EC2 computing capacity. Since the pricing is based on supply and demand, the costs can vary. However, it can go as low as 90% less than the on-demand price.

AWS also offers a feature called Spot Instance Advisor, which helps users understand the trends in spot price and interruption rates. This can aid in making more informed decisions about when to bid for a spot instance and how much to bid.

Learn more in our detailed guide to AWS Spot Instances

Microsoft Azure: Spot Virtual Machines

Microsoft Azure offers Spot Virtual Machines (VMs), their version of spot instances. Azure Spot VMs provide access to unused Azure compute capacity at significant cost savings. You can use Spot VMs for various workloads similar to AWS, but the pricing model is slightly different.

Instead of bidding, you simply set a maximum price (in USD) you’re willing to pay per hour for the VM. If the spot price goes above your maximum price, your VM will be de-allocated. However, you can always choose to pay the current spot price, even if it’s higher than your maximum price.

Learn more in our detailed guide to Azure Spot VMs

Google Cloud: Spot VMs

Google Cloud Spot VMs offer the same machine types and performance metrics as regular compute instances but at a discount of up to 91%. Google aims to minimize the pricing instability of spot instances by making pricing adjustments no more than once a month, and guaranteeing a minimum discount of 60%.

Spot VMs integrate with Google Kubernetes Engine (GKE), making them well-suited for containerized workloads. Additional features include per-second billing, graceful shutdown options, and the ability to quickly recreate instances through managed instance groups.

Learn more in our detailed guide to Google Cloud Pricing (coming soon)

Spot Instances Pricing vs. Other Pricing Models

Let’s compare spot instances pricing with other common cloud pricing models.

Spot vs. On-Demand

On-demand instances (also known as pay-as-you-go instances) offer computing power with a fixed hourly cost, making it a predictable and straightforward pricing model. However, Spot Instances, which allow bidding on spare computing capacity, can offer the same power at a fraction of the cost.

While on-demand instances provide assured availability, Spot instances can be interrupted when the spot price exceeds your bid. Despite this potential interruption, the cost savings with Spot Instances can be substantial, often up to 90% compared to on-demand pricing.

Spot vs. Reserved Instances

Reserved instances are another type of discounted cloud resource. However, unlike spot instances, they require a long-term commitment, typically one or three years, and might require upfront payments for some or all of the period. Cloud providers may offer discounts of up to 70%, depending on time commitment and upfront payment.

While reserved instances can be an excellent choice for predictable, steady-state workloads, spot instances offer more significant savings for flexible, fault-tolerant workloads. Moreover, with spot instances, you aren’t bound by long-term commitments. You pay for what you use, making it a more flexible and scalable option.

Learn more in our detailed guide to spot instances vs reserved instances.

Suitable Use Cases for Spot Instances

While spot instances offer impressive cost savings, they aren’t suitable for all workloads due to potential interruptions. Here are the common use cases of spot instances.

Batch Processing

Batch processing involves executing a series of non-interactive jobs all at once and is typically flexible regarding when the jobs are executed. Spot instances, with their potential for interruption and cost savings, are perfect for such workloads.

Even if a spot instance is interrupted during processing, another instance can take over, ensuring that the batch processing continues. Moreover, the cost savings with spot instances make them a financially sensible choice for batch processing tasks, which typically involve substantial computing power.

Testing and Development

The testing and development stage of software development can utilize a significant amount of computing resources. However, these stages can often tolerate interruptions, making spot instances a suitable option.

Spot instances provide an affordable way to scale testing and development environments. Even if an instance is interrupted, the work can be resumed on another instance, ensuring continuity. Further, the cost-effectiveness of spot instances can make a considerable difference in the overall cost of development infrastructure.

Big Data Analysis

Big data analysis involves handling vast amounts of data, requiring substantial computing power. These tasks can often be time-consuming and expensive when using traditional pricing models. However, spot instances can offer a cost-effective solution.

Many big data tasks can be broken down into smaller tasks, each running on a separate spot instance. Even if one instance is interrupted, the others continue their tasks, ensuring the completion of the overall job. The savings with spot instances can be substantial, considering the high computing power required for big data analysis.

Stateless Applications

Stateless applications, which don’t save client data generated in one session for use in the next session, can effectively utilize spot instances. Since these applications don’t require continuity, they can tolerate interruptions, making spot instances an ideal choice.

Spot instances offer a cost-effective solution for running stateless applications, which often require a significant amount of computing resources. Despite potential interruptions, the stateless nature of these applications ensures that there is no loss of data or functionality.

Running Mission Critical Applications on Spot Instances

Traditionally, organizations could not use spot instances for mission critical applications that require continuous availability. However, advances in cloud automation are making this possible. In particular, Elastigroup, a cost optimization solution from Spot by NetApp, can allow you to run mission critical applications on spot instances with zero interruptions.

Learn more about Elastigroup

Strategies to Optimize the Use of Spot Instances

Utilizing spot instances effectively requires strategic planning and execution, which will be covered in the following sections.

Monitoring and Notifications

By keeping a close eye on your spot instances, you can respond quickly to changes and make necessary adjustments to maintain performance and cost-efficiency.

Monitoring can include tracking the performance of your spot instances, keeping an eye on pricing trends, and watching for any changes in demand. By monitoring these factors, you can make informed decisions and take proactive steps to optimize your Spot Instances.

Setting up notifications can also be useful. Notifications can alert you to changes in price, demand, or the status of your spot instances. By receiving timely notifications, you can respond quickly to changes and avoid potential issues.

Using AWS Spot Fleet and Similar Technologies

Amazon offers Spot Fleet, a collection of spot instances, optionally mixed up with on-demand instances, that are launched to meet a specific target capacity. The Spot Fleet attempts to maintain its target capacity by launching additional spot instances as the market price changes. Other cloud providers offer similar mechanisms.

One of the key strategies to optimize spot instances is the effective management of a Spot Fleet. This requires a deep understanding of your application requirements and the ability to align these needs with the performance and pricing dynamics of spot instances. By strategically managing your Spot Fleet, and distributing workloads to align with the strengths of your spot instances, you can achieve significant performance and cost improvements.

Diversifying Across Instance Types and Availability Zones

Diversification is a key strategy in optimizing spot instances. By diversifying your spot instances across different instance types and availability zones, you minimize the risk of interruption and ensure a more stable and reliable service.

Each instance type offers different performance characteristics, and by understanding your application requirements, you can determine which instance types are best suited for your needs. By diversifying across different instance types, you can take advantage of the unique strengths of each type, optimizing performance and cost-efficiency.

Similarly, distributing your spot instances across multiple availability zones can significantly reduce the risk of interruption. If one availability zone experiences high demand or a service disruption, your application can continue to run smoothly in the other zones.

Taking Spot Instances to the Next Level with Elastigroup

Elastigroup from Spot by NetApp enables users to scale workloads on spot instances in AWS, Azure, and Google Cloud, with guaranteed availability, to see a dramatic cost reduction with maximum efficiency for both stateless and stateful workloads. With Elastigroup, users can:

Optimize their compute costs and realize up to 90% cost savings compared to on-demand instances
Intelligently distribute their incoming traffic across cloud resources to achieve maximum instance utilization and ensure high performance
Automatically scale infrastructure needs and avoid overprovisioning resources based on workload requirements

“With Elastigroup we can confidently run thousands of spot instances for our core technologies without needing to touch any aspect of our deployment.”
– Or Arnon, DevOps Team Leader, ironSource

Learn more about how Elastigroup can help you save on cloud costs and increase utilization with spot instances.

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