Cloud Spot Markets are Not Sustainable: The Case for Transient Guarantees

Computational spot markets enable users to bid on servers, and then continuously allocates them to the highest bidder: if a user is “out bid” for a server, the market revokes it and re-allocates it to the new highest bidder. Spot markets are common when trading commodities to balance real-time supply and demand—cloud platforms use them to sell their idle capacity, which varies over time. However, server-time differs from other commodities in that it is “stateful”: losing a spot server incurs an overhead that decreases the useful work it performs. Thus, variations in the spot price actually affect the inherent value of server-time bought in the spot market. As the spot market matures, we argue that price volatility will significantly decrease the value of spot servers. Thus, somewhat counter-intuitively, spot markets may not maximize the value of idle server capacity. To address the problem, we propose a more sustainable alternative that offers a variable amount of idle capacity to users for a fixed price, but with transient guarantees