This article originally appeared at The WHIR
Amazon has acquired Palo Alto-based software company ClusterK this week for a reported $20-$50 million. ClusterK optimizes AWS infrastructure and helps significantly lower the cost of compute.
As public cloud providers continue to drop prices to stay competitive, AWS will integrate ClusterK’s technology into its EC2 Spot Instances in order to offer instances at a fraction of the price, according to a report by VentureBeat.
ClusterK has two products: ClusterK Balancer, which leverages the AWS Spot Market to achieve up to 90 percent savings; and ClusterK Cirrus, a cloud-native HPC grid scheduler.
The Amazon EC2 Spot Market allows customers to name their price for compute capacity, and is made up of hundreds of smaller compute markets with real-time supply and demand-based pricing. “At this price point we fundamentally believe the total cost of ownership for cloud compute is materially cheaper than even the most efficient enterprise data centers,” the company says on its website.
While any single Spot Market “can be highly volatile and, in isolation, not appropriate for mission critical applications…ClusterK automates the use of multiple instance types, across multiple availability zones to create a highly available platform ideal for mission-critical applications.”
ClusterK’s team will relocate from Palo Alto and work in Amazon’s Seattle office, VentureBeat said.
“We firmly believe that market based mechanisms such as AWS Spot is the future of cloud computing which will lead to better resource allocation, better data center utilization by cloud providers and lower cost of ownership for customers. We design software and solutions to enable our customers, ISVs, and cloud providers efficiently and reliably use market based pricing mechanisms at scale,” ClusterK said.
For many startups and bootstrapped companies, price is still a main factor in determining their cloud infrastructure provider. By keeping an eye to technologies that can help lower compute costs, cloud providers will appeal to a wider range of cloud consumers who are more budget-conscious.
Cloud hosting providers that leverage AWS infrastructure may also be interested in ClusterK’s technology as they may be able to pass the savings onto their customers.
Even by offering users a price break, AWS will likely still maintain its cloud lead as its usage grows faster than revenue. AWS revenue in the year’s first quarter grew nearly 50 percent year-over-year, reaching $1.57 billion.