Hot on the heels of its first successful AWS-laden earnings announcement (www.cloudcomrade.com/2015/04/25/amazon-boss-says-aws-soaring-ahead/), Amazon is making moves to protect its market. It has just announced the acquisition of a start-up company called ClusterK that uses its technology to help reduce costs when it comes to using Amazon EC2 Spot Instances. This clever management system can reduce users processing costs by up to 90%, compared to using Amazon’s regular service costs, and can help other start-ups keep costs low, or help bigger enterprises reduce their cloud computing bills.
Amazon says it plans to integrate its technology into AWS, but doesn’t really say whether it will keep prices that low, or will limit the possible savings to protect its margins, while still offering users a way to reduce their current costs. The deal is rumoured to have cost between US$25-$50 million, which is a drop in the ocean for Amazon’s near $6 billion cloud business.
ClusterK works by checking current prices and predicting future prices for various Spot Instances across most AWS markets, finding the cheapest and then distributing that low-cost processing capacity to customers, while maintaining fault tolerance, but helping users to avoid sudden rises in prices or paying over the odds for capacity.
Amazon could have big plans for Spot Instances, which remain a relatively untapped market compared to some of AWS’s more popular services, and the ClusterK deal will help make them more attractive. ClusterK had seen around $1.5 million in investment, so looks to be coming out well ahead of the deal. The company was founded in 2013 to overcome the issue of costly cloud prices for heavy uses (its founders from Stanford University worked on cloud DNA decoding tasks). Products include ClusterK Balancer to orchestrate tasks and ClusterK Cirrus, a grid-based platform to manage them.
Customers should watch for Amazon’s integration of these technologies and be prepared to take advantage of them when available. They can help reduce the costs for intensive cloud users, such as big data businesses, science and engineering teams, and other heavy uses. As ClusterK steps out of the market, it is possible other startups could attempt similar systems to reduce AWS costs for customers.
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