Short Term Price Prediction for Preemptible VM Instances in Cloud Computing

Amazon utilizes its free capacity by launching a special type of VMs known as spot instances in Amazon Elastic Compute Cloud (EC2). Users can get these instances by placing bids. These instances are low-cost resources with the risk of reliability. There is a trade-off between cost and reliability in the use of spot instances. So, there is a scope of research in the efficient use of spot instances. The prices of spot instances vary with time, so, one can efficiently utilize spot instances by accurate prediction of prices before bidding. In this article, an algorithm has been proposed for short term prediction of spot prices. The algorithm uses probability between price transitions from the observed history and it can predict the price for next epoch. One can get the short-term price prediction for a particular instance type and product type in a specific region. We have compared the proposed algorithm with other existing prediction algorithms.