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Very interesting, thanks! I've spent a bit of time working on a library to accomplish this, and Boto has been extremely helpful.

The watchdog isn't very sophisticated -- it just checks to make sure that the correct number of instances are running in each auto-scale group.

How did you decide on the right number of instances? The article mentions 20%--is that based on latency, a cost-saving target, or something else?

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We revise the "right number of instances" every few weeks based on latency and traffic numbers. But sometimes when we release updates, we'll find that we suddenly need a lot more capacity (or a lot less if we improved performance). We have automated tools to help us notice performance regressions. Once we decide that we need to change the pool size, we adjust the watchdog configuration by hand.

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