Maximize ROI in Spot Instances with CloudSpend

In our fast-paced tech world, the need for scalable and budget-friendly cloud resources is unprecedented. AWS is the frontrunner in providing organizations with a wide range of computing services. Through its Amazon EC2 Spot Instances program, often known more simply Spot Instances, AWS offers a cost-effective alternative plan to address an organization’s resource-intensive workload requirements.

Spot Instances 101

Spot Instances are unused EC2 capacity that AWS makes available at a discounted price. This cloud computing services program was developed by Amazon to allow organizations to save up to 90% of the cost of Amazon EC2 On-Demand Instances. The prices of Spot Instances fluctuate based on supply and demand. When the demand is high, Spot Instance prices can be higher than On-Demand prices. Otherwise, when the demand is low, Spot Instance prices can be significantly lower than On-Demand prices.

How does a Spot Instance work?

When you request a Spot Instance, AWS will allocate an instance to you if the current Spot Instance price is below your maximum bid price. You can cancel a Spot Instance at any point of time. If the Spot Instance price rises above your maximum bid price, AWS will terminate your instance and send you a two-minute warning. This is called a Spot interruption.

Spot Instances are a good fit for workloads that can be interrupted, such as batch jobs, rendering jobs, and are not a good fit for workloads that cannot be interrupted, such as production databases and critical applications. Spot Instances are a game-changer for organizations looking to optimize their cloud computing expenses without compromising on performance.

A Spot Instances use case

A financial institution that uses AWS for its batch processing jobs can use Spot Instances to save money on its AWS costs. It can request Spot Instances for its batch jobs and set a maximum bid price that is below the On-Demand price.

If the Spot Instance price rises above the company’s maximum bid price, the AWS Batch service will automatically terminate the job and restart it on a Spot Instance with a lower price. This way, the financial institutions can save up to 90% on their batch processing costs.

Batch, develop, test, and more

Spot Instances are ideal for tasks such as data analytics, batch processing, and simulations. These workloads often involve heavy computational requirements and can run cost-effectively using Spot Instances. The instances in testing and development environment are often left unchecked which leads to cost overruns.

Using Spot Instances can be a cost-efficient choice that lets your provision resources and dispose of them when the task is completed. Often scientific and engineering applications that demand significant computational power can benefit from Spot Instances. By bidding for spot capacity during low-demand periods, you can run HPC workloads at a fraction of the cost.

How CloudSpend can help you optimize Spot Instance costs

Let us consider a scenario where an engineering leader is provisioning his team with development environment with Spot Instance to save marginal costs. CloudSpend, a cloud cost management tool, allows engineering leaders to utilize budgeting capabilities to establish custom budgets for your tasks, services, and other resources. They receive notifications when spending exceeds predefined limits, enabling proactive Spot Instance cost management.

CloudSpend’s reports features allows them to stay well-informed about their Spot Instance expenses and make data-driven decisions to streamline costs. With CloudSpend’s granular-level tagging, your Spot Instance resources can be categorized based on attributes like application, environment, and department. This facilitates precise cost attribution to specific business units, projects, or teams.

With ManageEngine CloudSpend, you can define departments or teams as business units. This feature aids in precise cost allocation, allowing you to assign resources to specific business units and independently monitor their Spot Instance expenditures. Such functionality promotes improved innovation and better cloud financial management.