Wednesday, March 29, 2006

Commodity pricing

Sun's Grid is priced at $1 per CPU hour. So you might expect that you could run 60 jobs each taking a minute for $1 - right? Unfortunately, as Clint Combs discoverd, this would actually cost $60! Instead of adding up the aggregate CPU duration for the day/week/month, the system currently rounds each job up to the nearest hour (i.e. dollar).

This might sound unimportant, but it fundamentally changes the market of potential Sun Grid customers. For example, my Site Stats business generates between 500 and 1000 web traffic reports per day for customers. If I could submit them all to the Sun Grid for processing, and it took say 5 hours of CPU time then I would like to pay $5, rather than $1 per report - a whopping $500 to $1000! I believe my scenario is typical for thousands of other small businesses.

Sun are looking to change their grid pricing, so those Web 2.0 start-ups can run a much finer granularity of grid job over the network. Imagine if your electricity provider charged you 10c per KwH, with a minimum charge of 10c for every light you switched on. Now that wouldn't be commodity pricing would it? To really follow Jon Schwartz' electricity analogy, it's time to start billing for aggregate usage over a period of time.


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