Amazon Web Services allows users to sell reserved instances

The company hopes to make reserved instances more attractive by increasing flexibility

Amazon Web Services (AWS) has announced an online marketplace where users of its cloud computing services can sell their reserved server instances to other companies, the company said on Wednesday.

Reserved instances allow avid cloud users to lower their cloud costs by making a one-time payment to reserve compute capacity for a specified term, and in turn, receive a discount on the hourly charge, Amazon said.

For example, a standard Linux instance costs from US$0.08 per hour, while a reserved instance with a one-year term and light utilization costs $69 plus $0.039 per hour. That cost divided by the discount means that it is a good deal after running the instance for more than 70 days.

The introduction of the new maketplace is about making reserved instances more attractive by increasing flexibility for both sellers and buyers.

Users that want to move their instances to a new region, change to a new instance type, or sell capacity for projects that end before the term expires are now allowed to do that, according to Amazon. It will also mean that companies that anticipate increased website traffic for a short period of time, for example, will be able to buy reserved instances with shorter durations, it said.

Only the one-time payment is part of the transaction and the discounted hourly rate remains unchanged.

Using the AWS management console, buyers will be able to search for instances that fit their needs with respect to location, instance type, price, and remaining time.

The management console is also used to sell capacity. Via the user interface, users can list what they want to sell and set the upfront payment they are willing to accept for it. A month-over-month price drop for the listing can also be set.

A seller continues to own and get the pricing benefits until an instance is sold. After the sale the instance can still be used, but is charged for at normal hourly rates.

Amazon charges all sellers a 12 percent service fee on every transaction.

A reserved instance can be listed for sale after it has been owned for at least 30 days. A U.S. bank account is needed to sell capacity, and sellers will have to complete an online tax interview if they plan on doing 200 or more transactions or surpass $20,000 in sales, according to Amazon.

Besides reserved instances, there are today two other ways to buy capacity from Amazon: on demand or from its spot market.

On-demand billing is the traditional cloud model of paying per hour for the capacity used, while the spot market allows users to bid for unused capacity. When the current spot price for the desired instance type is at or below what a user has bid, the instance will run, according to Amazon.

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