Embracing failures and cutting infrastructure costs: Spot instances in Koobernaytis
November 2018
The last decades have seen a global shift from on-premise data centres to the provisioning of Virtual Machines (VMs) from mainstream cloud providers such as Amazon Web Services, Azure, Google Cloud Platform.
Running and managing your own physical machines is hard and costly; chances are you'll never be as successful and efficient as any of the top cloud providers. And what's not to love when you can leverage a mature platform and features such as:
- Vertical scalability - You can get instances of different sizes
- Horizontal scalability - You can get (almost) as many instances as you want
- Flexible pricing - You only pay for what you use
- Logistics cost - You don't have to physically maintain any server (heat control, electricity, backup, storage cost, fire prevention etc…)
- Availability - Provision VM in separate data centres
- Reliability - If you pay for an instance you'll keep it until you are done. Should it go down you'll immediately (+- 5min) get a replacement
In this article, we will explore the different pricing models of a typical cloud provider. We will focus on one strategy and see how it could cut your bill by up to 80% if you are willing to trade in reliability.
Finally, we will see how Koobernaytis makes that lack of reliability irrelevant and allows you to run a cheap yet highly available cluster.
Pay-as-you-go: flexibility comes at a price
The typical pricing model for cloud providers is based on a pay-as-you-go scheme.
Compute resources come in different sizes (i.e. memory, CPU, disk etc..) and an hourly cost. You get billed for the amount of time the instance is running.
This flexibility of pricing is excellent and fair, but you have to be careful with what you consume. If you leave instances running while you don't need them anymore, you'll be throwing money out of the window.
However let's say you can foresee utilisation of a VM for a whole year. Shouldn't you be able to get a bulk discount on your bill?
Get a bulk discount with Reserved Instances
With reserved instances, you need to commit to compute resources for at least a whole year, and if you really love commitment, up to five years. You may decide to pay an amount of the bill upfront.
The discount that you get will depend on how long you are willing to commit and how much you can pay upfront. For example on Amazon Web Services, the m4.large instance type can be discounted as follow:
| Pricing Model | $/hour | Instance/year | Total 1 year |
|---|---|---|---|
| Pay-as-you-go | $0.111 | $960 | $3847 |
| 1 Year reserved 100% upfront | $0.071 | $615 | $2460 |
As you can see, the discount offered from reserved instances typically range from 30% to 40%.
With reserved instances, you are basically trading flexibility for cash.
Though 30% to 40% might sound like reasonable savings, it might not always be worth it.
Are you able to forecast your compute resource utilisation for the next 1 to 5 years? If you are building a cutting-edge startup in the cloud can you accurately predict what your traffic will be like in a few years?
If it sounds like a gamble, it is. Perhaps commitment and upfront payment is not the only way you could save on your cloud bill.
Spot Instances: when cheap is better than reliable
Amazon calls them Spot Instances, Azure Low-priority VM and Google Preemptible VM.
We will call them "spot instances" as it seems to be the most common terminology.
Though their inner workings differ a little, they stem from the same rationale.
A typical cloud provider buys loads of powerful servers organised in large data centres. To maximise the utilisation of hardware, they divide those computers into smaller virtual machines.