Amazon Acquires ClusterK; Deal Worth up to $50M

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ClusterK is an innovative application that enables businesses to save up to 90% on their cloud compute costs. Cloudwedge did a report on ClusterK when the startup received its last big investment back in February 2015.
ClusterK’s app can be used for finding low cost spot instances on Amazon Web Services. ClusterK works by using an algorithm that predicts the spot price of virtual machines on Amazon. ClusterK then gets input from the user, and builds out a virtual machine farm based on the spot price the customers are willing to pay for server instances.
AWS must have been impressed by ClusterK’s innovation. Some sources have said that AWS has reportedly paid between $20M and $50M for the young startup. As AWS looks for ways to beat out its competition, picking up ClusterK seems like an easy decision as Amazon.
By giving AWS customers access to ClusterK, clients of AWS can save even more on their cloud computing costs without having to shop around for the lowest price. ClusterK gives businesses an alternative to the traditional pricing methodology that cloud IaaS providers are currently offering.
Amazon will likely continue to promote its spot instance platform with the acquisition of ClusterK. AWS could tout ClusterK as being a method in which organizations can cheaply and rapidly deploy apps on infrastructure while ensuring a much lower price than its competitors. This is a win-win for both parties, as the business will get a great deal and Amazon will be able to more quickly sell underutilized data center servers.
Although the idea of using spot instances to power a organization’s infrastructure sounds tempting, the ClusterK website warns that, “Any single Spot Market can be highly volatile and, in isolation, not appropriate for mission critical applications.”  Spot instances are perfect for development environments or applications that only need to be temporarily used.
ClusterK received over 1M in funding in February. An investor involved with ClusterK’s last investing round is quoted as saying, “They did have quite a bit of traction before in saving POC [proof of concept] guys just a ton of money, like, $500,000 or $600,000 a year.”