Disclosure: I work on Google Cloud (and launched Preemptible VMs).
Economically, because the price is fixed and everyone has the same status, wouldn't that have the effect of oversubscription if that price is always below amazon spot price? Are you eg legally prevented from using a spot-like bid? I'd imagine spot would balance supply and demand better.
If they can sustain a lower price, picking a fixed discount gives them a marketing edge, even if AWS would come out lower overall. Most humans will pay a premium for certainty -- the certainty effect or "taxicab effect".
The distinction, as you've surmised, is that predictability is awfully useful. This 220k run (and Drew's quick 400k run last Sunday) had a predictable price. I doubt that such a run on Spot would have left the market price untouched ;).
That said, we absolutely have excess capacity that maybe having an auction clearing mechanism would fill. But I don't think it's worth the customer pain. Moreover, even Drew has come to us from Spot, suggesting that simplicity at a usually-fair/good price can take market share away (and reminder this is a fast growing market!).
The basis of budgeting and capacity planning is that everybody who participates in a free market secretly wishes they didn't have to.
if I were to launch an instance of Kubernetes (via container engine) with such VMs, would it have an issue? (as in, if I had more load, more preemptible vms would be provisioned automatically based on a previously set max amount and if a vm was removed, another would be assigned based on my minimum amount)
am I wrong in thinking that this is a much better option than running dedicated vms?