Amazon has acquired a Palo Alto based tech startup ClusterK to increase the efficiency of its service for its clients. The startup offers a software that enables the users of AWS(Amazon Web Services) use a more economical AWS product in place of a relatively expensive one.
Amazon has confirmed the deal but declined to give specifications like the amount and stake.
While some might tout the startups as a competitor of AWS, the latter claims that it isn’t so. Amazon’s interest in the company is clear, as ClusterK’s software technologies have devised a way to rely on Spot Instances — these are the spare Amazon EC2 (Elastic Compute Cloud) instances for which users decide their price on Amazon Web Services (AWS) — to run applications for 1/10 of the cost of using Amazon’s far more popular on-demand services.
The deal was concluded yesterday with Amazon paying around $20-50 million for the startup,according to VB. The ClusterK team is set to move in to Amazon headquarters in Seattle and ClusterK Founder and Chief Executive Dmitry Pushkarev will be taking on a prominent role at AWS.