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Great answers, thank you. Economically, because the price is fixed and everyone has the same status, wouldn't that have the effect of oversubscription if that

Great answers, thank you. Economically, because the price is fixed and everyone has the same status, wouldn't that have the effect of oversubscription if that price is always below amazon spot price? Are you eg legally prevented from using a spot-like bid? I'd imagine spot would balance supply and demand better.

jacques_chester 10y ago
My suspicion is that Google's unit economics for compute and network are better than Amazon's, because they've never historically had the ability to push costs onto a customer. It all fell to their own bottom line. If they can sustain a lower price, picking a fixed discount gives them a marketing edge, even if AWS would come out lower overall. Most humans will pay a premium for certainty -- the certainty effect or "taxicab effect".
- boulos 10y ago
  There are certainly particular instances in particular regions or zones that are cheaper than the preemptible price we've set. If you look at larger instances, we often are drastically cheaper. Add in the per-minute versus per-hour pricing, and some customers have seen massive wins (I recall one at nearly 10x less). The distinction, as you've surmised, is that predictability is awfully useful. This 220k run (and Drew's quick 400k run last Sunday) had a predictable price. I doubt that such a run on Spot would have left the market price untouched ;). That said, we absolutely have excess capacity that maybe having an auction clearing mechanism would fill. But I don't think it's worth the customer pain. Moreover, even Drew has come to us from Spot, suggesting that simplicity at a usually-fair/good price can take market share away (and reminder this is a fast growing market!).
  - jacques_chester 10y ago
    Right. The basis of budgeting and capacity planning is that everybody who participates in a free market secretly wishes they didn't have to.
boulos 10y ago
No, we could have done an auction-based pricing model (Google's ads business is clearly a big fan). But I pushed for flat rate and won ;). However, just a note that you don't get oversubscription but rather a "first come first served" result which has its own downsides.
- asher_ 10y ago
  Excellent! One of GCPs many advantages (outside of it's technical ones) is it's simpler pricing model.

jacques_chester 10y ago

My suspicion is that Google's unit economics for compute and network are better than Amazon's, because they've never historically had the ability to push costs onto a customer. It all fell to their own bottom line. If they can sustain a lower price, picking a fixed discount gives them a marketing edge, even if AWS would come out lower overall. Most humans will pay a premium for certainty -- the certainty effect or "taxicab effect".

boulos 10y ago
There are certainly particular instances in particular regions or zones that are cheaper than the preemptible price we've set. If you look at larger instances, we often are drastically cheaper. Add in the per-minute versus per-hour pricing, and some customers have seen massive wins (I recall one at nearly 10x less). The distinction, as you've surmised, is that predictability is awfully useful. This 220k run (and Drew's quick 400k run last Sunday) had a predictable price. I doubt that such a run on Spot would have left the market price untouched ;). That said, we absolutely have excess capacity that maybe having an auction clearing mechanism would fill. But I don't think it's worth the customer pain. Moreover, even Drew has come to us from Spot, suggesting that simplicity at a usually-fair/good price can take market share away (and reminder this is a fast growing market!).
- jacques_chester 10y ago
  Right. The basis of budgeting and capacity planning is that everybody who participates in a free market secretly wishes they didn't have to.

boulos 10y ago

No, we could have done an auction-based pricing model (Google's ads business is clearly a big fan). But I pushed for flat rate and won ;). However, just a note that you don't get oversubscription but rather a "first come first served" result which has its own downsides.

asher_ 10y ago
Excellent! One of GCPs many advantages (outside of it's technical ones) is it's simpler pricing model.