19 March 2014

(You might want first see the introduction to this series of posts if you jumped in here randomly.)

How to use spot instances

I’m going through a couple of topics related on how to use spot instances:

  • Suitable applications and workloads for spot instances
  • Bidding automation and bidding strategies
  • Minimizing effects of price spikes

Determining whether your application can benefit from cost savings using spot instance is quite straightforward to analyze — it’s a cost vs. cost analysis. There is quite a lot of information on bidding strategies and cost spike mitigation, but information in bidding automation is sparse as companies using spot instances generally do not publish their bidding engines or its parameters.

Suitable applications and workloads

Here’s a list of applications suitable for spot instances according to the source itself:

  • Batch processing
  • Hadoop
  • Scientific computing
  • Video and image processing and rendering
  • Web / Data crawling
  • Financial (analytics)
  • HPC
  • Cheap compute (“backend servers for facebook games”)
  • Testing

The common theme in all of these is loss of an instance is not a catastrophe. You can influence the likelihood of an instance loss through the bid price (see instance availability in previous post), but unless you are willing to face potentially absurd costs to guarantee 100% spot instance availability you’ll have to come to face with the fact that:

You have to be able to recover from sudden spot instance termination.

Whether you would want to use spot instances and whether you can use spot instances is determined by three factors:

  1. Potential savings gained by using spot instances.
  2. Costs of a spot instance failure. For example loss of profit and money and work required to recover.
  3. Costs required to either completely avoid failure in face of spot instance failures, or to mitigate the risk to acceptable levels.

The firsts two are recurring (you get savings continuously, but spot instance failures also occur continuously) whereas the third one is mostly one-off cost.

And face it, if you are using spot instances you have to be prepared that many of them fail at the same time. You can have some influence over the number of lost instances by using multiple availability zones and tiered bidding (see moz.com developer blog for excellent insights) but however you slice and dice you still come to the fact that:

You have to be able to recover from sudden spot instance termination.

How you deal with instance termination is affected by what are your costs to fail and costs to prevent failure. Consider a few cases:

  • Spot instances as build slaves. Your CI automatically provisions build slaves from spot market as needed (and tears them down when demand goes down). So now suddenly all your build slaves went away — so what? Jobs failed, builds lost, but it’s not going to kill your devtest.

    The recovery method in this case would be simple: first of all, the CI instance launcher might already have built-in balancing from many zones (meaning it’ll bid in multiple availability zones). Even if that wasn’t the case you could go and manually change the bidding parameters to a higher bid price (maybe you accept a bit higher costs while thinking of some other solution), use another zone or use another instance type. You might equally well just wait a while to see if the price just spiked and would go down soon.

    In this case it is likely that the cost to prevent interruption of CI jobs would be higher than productivity losses so it is reasonable just to wait it out and handle any aftermath manually.

    (Just do not run your build master in a spot instance.)

  • Hadoop cluster. Assuming you are using your Hadoop cluster semi-continuously (ground radar signal processing, mobile game user analysis etc.) there are a few possible scenarios. For the most part Hadoop will automatically re-assign map-reduce jobs from failed nodes, so loss of some nodes isn’t a biggie for Hadoop at all. Mahujar’s post Riding the Spotted Elephant is an excellent article discussing various pros and cons on different ways to use spot instances with Hadoop. Essentially this boils down to:

    It is possible to run a Hadoop cluster using spot instances where sudden price peaks will have only a limited effect (delaying completion of some jobs) sans force majeure situations.

    In this case you could be hedging your bets by using a hybrid cluster, some on-demand instances and some spot instances, potentially with tiered bidding. This will increase the running cost but will be highly likely to prevent massive failures.

  • Financial analysis. (I’m not a financial market wiz, so bear with my unbelievable scenario here, please.) You’re running a financial modeling job nightly using spot instances. The job will take 4 hours to complete and the time window to run it is six hours. It must not fail.

    Okay, if it must not fail then you should not be running it using spot instances in the first place. So let’s reword the requirement. “Must not fail with nightly operating costs less than X.” That is, if the cost of not failing would be over X you can fail.

    You’ll need three things: bidding automation, provisioning automation and checkpointing. The first one is to try to keep your instances alive as much as feasible. The second one is to try to acquire complementary resources (on-demand instances, other types of spot instances, another region — whatever it takes) in case you start losing spot instances and the third one is to ensure that when you get replacement instances you can quickly continue from where the analysis stopped without having to re-do everything from scratch.

    In this case the cost of prevention is large — setting up the required automation and testing it to death will itself require a large effort, not to speak about the costs that will come after the automation kicks in. But then again, the failure to run to completion would be expensive too.

The less time-critical and more resilient your computing requirements are the easier it is to move them over to use spot instances.

If you are using AWS in a large scale then you should already have disaster recovery plans for situations that would affect your service such as a whole availability zone going out (or a whole region in case you are Netflix). When using spot instances you’ll need to factor in plans for persistent spot price increases. If spot prices go up, for how long are you willing to “wait it out” to see if they drop back down? What will you then do when you decide they’re not coming down?

To recap:

  • Don’t use spot instances if your requirements include “must not fail”
  • Do a cost-benefit analysis:
    • Estimate savings
    • Estimate cost of failure
    • Estimate cost of avoiding failure
    • Compare

Bidding automation and bidding strategies

If you are using spot instances now and then for one-off tests you should do bidding manually. In this case you should bid higher than the current market price (see what I wrote about instance availability in previous post) to prevent small price fluctuations from terminating your instance. Just remember — don’t bid higher than you are willing to pay!

For simple use cases a using auto scaling for provisioning automation and setting the spot instance bid price (in auto scale launch configuration) is sufficient. This can’t alone guarantee availability of a service, but it will be enough for less than 24/7 operations.

If you had provisioning automation (automatic scale-up and scale-down) before then adding spot instances brings in a few complications:

  • Launching spot instances takes a longer time than on-demand instances (bidding process itself takes extra time).

  • Spot market price can will vary over time, including potentially large spikes. You have to decide how to deal with spikes.

  • Your spot instances can all just vanish with a sudden spot price spike.

Writing a spot market bidding and provisioning engine is thus more complicated than for scaling up and down with on-demand instances. Do make sure that you put in hard limits to your bid prices. Remember the poor sod who paid $999.99/hour for his/her spot instances.


Depending on your application requirements you can apply several different provisioning and bidding strategies. Here’s a video that discusses various strategies AWS has detected its customers using:

  1. Optimizing costs. These customers bid at reserved instance pricing level with the goal of gaining RI-level costs without their up-front costs. Needless to say, bidding at this low level you are facing loss of all spot instances during a price hike.

  2. Optimizing costs and availability. These bid at a level between reserved instance price and on-demand instance price. This will not protect from sudden price hikes, but will prevent smaller fluctuations from terminating instances.

  3. Capable of switching to on-demand instances. These customers have provisioning automation that can automatically shift from bidding for spot instances to provisioning on-demand instances when it detects that spot prices have increased >1x price level. These typically bid at on-demand price level or a little higher.

  4. High bidders for availability. For these they are interested in getting average savings from spot instances, but put a large value on availability of their spot instances. These will bid significantly higher than on-demand price.

    I think this is a reasonable strategy to deploy interrupt-sensitive application using spot instances with the caveat that you must be able to later move to cheaper resources (on-demand instances, reserved instances, other zones, other instance types, other regions) without service interruption. If you cannot move over, then permanently bidding high in hope of getting both savings and availability is gambling, not a strategy.

  5. High bidders for resources. There’s another reason to bid high. At 4:00 in the video there’s a description about BrowserMob’s provisioning strategy where they put a very high value in getting the resources they need. When BrowserMob’s system determines it needs more capacity, it’ll first bid at spot market (the video doesn’t say but I’d guess at on-demand price). If it can’t get resources from the spot market, it’ll try to acquire an on-demand instance. If that fails, it’ll start bidding in the spot market at a high level.

Note that bidding high is a workable strategy only as long as most don’t bid high.

Bidding over the on-demand price

I want to emphasize the following:

Contrary to a lot of comments in the Internet bidding over on-demand price is an entirely rational bidding strategy in certain cases. Consider the two graphs below:

c1.xlarge spot price medium volatility across zones in us-east-1 c1.xlarge cost at availability in us-west-1

c1.xlarge in us-west-1. Left graph shows market price where solid line is daily average and lightly colored boxes are the daily maximum price. Right graph shows what would have been the total cost to achieve certain availability target. The light vertical bar is 1/4x on-demand price.

The table below shows what you would have had to bid (again, this is post hoc analysis, you would not have been able to know these values beforehand) to gain 100% availability and what it would have cost you had you bid at the given level.

ZoneRelative Bid PriceRelative CostAvailability
Zone 1 1.293 0.201 100%
Zone 2 17.241 0.267 100%
Zone 3 17.241 0.193 100%

Bid prices and total costs relative to on-demand prices for c1.xlarge instances in us-west-1 over the same time period as with earlier graphs. The cheapest zone ended being zone 3 with the required bid being >17× on-demand instance price. Yet the zone with the lowest maximum bid price (zone 1) ended up being more 4% more expensive than zone 3.

I think this make it clear that bidding over the on-demand price can be entirely sensible strategy in some cases. It just isn’t a strategy you should be doing blindly. If you can’t handle interruptions nor you can move your workload to other zones, other spot instance types, or on-demand instances and are bidding high, then you are in a very, very bad place when the price goes up for an extended period of time.

To summarize the last point: unless you have good automation that can shift your workload seamlessly from high-priced spot instances then you should stick to one of the three first bidding strategies. They at least have a known failure model (e.g. you lose instances).

Minimizing effects of price volatility

Since spot price volatility is a given, is it then possible to somehow control the effects of that volatility? The basic approach is to reduce the probability of that volatility causing problems and secondarily to limit the impact of any problems encountered.

Tiered bidding and multiple zones

There are few other tricks noted elsewhere that you can use to restrict the severity of price hikes:

  • Bid in multiple tiers. Add some randomness to your spot bids. If you determine that you should bid your resources at X, then bid at X, X + 5%, X + 10% and X + 15%. This means that if the spot price peaks at X + 4% then you’d lose only 3/4 of your spot instances. (You can elaborate this further and match the bidding structure to some “reasonable” estimates of price volatility based on history etc. etc.)

  • Bid in multiple availability zones, but in different bids. Don’t blindly use the AWS’s behavior of picking the cheapest zone when you specify multiple zones in a bid. If you have bid automation, don’t blindly always bid in the “cheapest” zone either.

  • If your application can automatically handle new instances (self-registration, autodiscovery etc.), you can live short price spikes through with persistent bids. Persistent bids stay in the bidding pool and will be filled at any time the spot price is below the bid price — even if the bid “lost” its instances due to a price spike.

AWS allows you to specify multiple availability zones in a single bid. In this case AWS will pick the cheapest (lowest spot price) zone at that moment where the spot request can be fulfilled.

If you continuously put your instances into the cheapest zone the majority of your instances are likely to end up in a single availability zone. Take a loot at the graph below showing m1.small spot prices in multiple availability zones. There is always a possibility that a single zone has a long stretch of relative tranquility and low prices.

m1.small instance prices in us-east-1

m1.small in us-east-1. Notice how zones 1, 2 and 4 have a long history of low prices and low volatility, yet zones 2 and 4 have sudden spot price level changes.

Yet that tranquility can always end suddenly. I haven’t looked at time correlations between zone prices, but from a look at the graphs I think there is sometimes correlation (e.g. if spot price raises in a zone for an instance type it is likely to go up in another zone), but similarly sometimes there is no such correlation.

So you should ensure that your spot instance bids are distributed over multiple availability zones if that is feasible for your application. See Bryce Howard’s commentary on moz.com crawler outage and how it was primarily caused by placing spot instances in a single availability zone.


A very common advice is to not run all your infrastructure on spot instances. This is a very good advice. It is not always sensible to go after the highest savings. A good strategy is to use a healthy mix of reserved instances, on-demand instances and spot instances.

Keeping state, checkpointing, job subdivision

This is a topic I’m not going to go deeply, but the core idea is simple:

  • Periodically save the state of whatever your spot instance is doing (checkpointing) so that if it is terminated, another instance can continue from the last saved checkpoint.

(Edit 2015-01-06: AWS announced a two-minute termination notice available via instance metadata. You still can’t prevent termination, but you do not get a short notice before it occurs.)

Extension of this is to store the state continuously, but there are tons of tradeoff and what’s a good choice depends on your goals and your applications. Computation tasks that split naturally into iterations or queueable jobs are easy, those that have gigabytes of state or require a lot of I/O to store temporary results are more difficult.

Keep in mind that AWS will not charge for a partial hour on spot instances it terminates. This means that you should consider checkpointing only for long-running jobs and those where job completion time is an important factor. If your jobs take less than an hour then a loss of a spot instance will only delay the job, but that delay won’t cost you anything in instance charges either.

(You can play chicken with spot instances where after you’re done with the instance you won’t actually terminate it immediately, but wait to see if AWS does it before the full hour. Sometimes this gives you the instance-hour for free…)

There is some research into checkpointing and spot instances. See for example Monetary Cost-Aware Checkpointing and Migration on Amazon Cloud Spot Instances (Yi, Andrzejak and Kondo, 2012) and Reliable Provisioning of Spot Instances for Compute-intensive Applications (Voorsluys and Buyya, 2012). I’m not myself aware of systems that use heavy-handed state checkpointing. There are quite a few that use spot instances as worker nodes (with <1hour jobs) where the real difficulty boils more into detecting failures and tuning retry timeouts than bothering with any form of checkpointing.


It is relatively easy to understand the behavior of spot instances in itselfBid < Price ⇒ Terminate. The difficulty of using spot instances lies in the fact that it is a market (at least that’s what we’re led to believe) driven by supply and demand and a lot of mostly rational bidders.

We can know how our spot instances behave when the spot market price changes. But we cannot predict the spot market itself.

This means that although you can influence the likelihood of spot instance termination through bidding strategy, you still have to be able to recover from sudden (and massive) spot instance termination.

Did I get that through?

Further reading

Here’s the next post in the series.

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