Date Added: Oct 2011
Cloud providers possessing large quantities of spare capacity must either incentivize clients to purchase it or suffer losses. Amazon is the first cloud provider to address this challenge, by allowing clients to bid on spare capacity and by granting resources to bidders while their bids exceed a periodically changing spot price. Amazon publicizes the spot price, but does not disclose how it is determined. By analyzing the spot price histories of Amazon's EC2 cloud, the authors reverse engineer how prices are set and construct a model that generates prices consistent with existing price traces. They find that prices are usually not market-driven as sometimes previously assumed.