Cloud computing offers computing and storage services which can be dynamically developed, composed and deployed on virtualized infrastructure. Cloud providers possessing excess spare capacity, incentivize clients to purchase it by selling them in a market (spot market), where the prices are derived dynamically based on supply and demand. The cloud providers allow clients to bid on this spare capacity by granting resources to bidders while their bids exceed a periodically changing dynamic spot price. In this paper, a generalized second price auction is proposed for the spot market by viewing the spot instances as heterogeneous units. The concept of heterogeneity has been introduced into the spot market by considering the inter-price time of spot prices. © 2013 IEEE.