Amazon Cloud Revenue Heads Higher as Google Plays Catch-Up: Tech

Amazon.com Inc.’s Web Services division, whose server farms generate the processing power the retailer sells to heavy corporate data users on the cheap, has grown so large that the unit routinely finds itself with thousands of spare machines.

So the e-commerce giant created a supply-and-demand-driven market called Amazon EC2 Spot Instances that lets clients rent processors for as little as 10 percent of Amazon’s standard cloud-services fees. To use Spot Instances, companies bid for the rights to a certain number of servers. Winning bidders are billed by the hour, as long as the market price hasn’t risen above an upper bound they specify.