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Mobile micro-clouds are promising for enabling performance-critical cloud applications. However, one challenge therein is the dynamics at the network edge. In this paper, we study how to place service instances to cope with these dynamics, where multiple users and service instances coexist in the system. Our goal is to find the optimal placement (configuration) of instances to minimize the average cost overtime, leveraging the ability of predicting future cost parameters with known accuracy. We first propose an offline algorithm that solves for the optimal configuration in a specific look-ahead time-window. Then, we propose an online approximation algorithm with polynomial time-complexity to find the placement in real-time whenever an instance arrives. We analytically show that the online algorithm is 0(1)-competitive for a broad family of cost functions. Afterwards, the impact of prediction errors is considered and a …