Amazon is very smart in advertising the price of their virtual servers in dollars per hour. 32 cents per hour of a large instance really does sound cheap, but only until you multiply this by 8760, that is, by the number of hours in a year. $2800 per on-demand server per year is not cheap! For this money, you could not only buy the server yourself, but you get it hosted for a year, too. Even if you go for a reserved instance it costs $1340 per year, which is approximately the price of bare metal. If your startup requires non-negligible computing power on a continuous basis I’d really recommend you to augment your AWS instances with dedicated servers owned by you. At Zemanta, we constantly move between the AWS and our dedicated servers, depending on the availability of our hardware and the cost of Amazon servers. By doing this, we manage to substantially reduce our AWS bill, which makes Škrat very happy.
So, while Amazon has delivered on its promise of delivering elastic computing cloud, it has not delivered yet on the promise of cheaper computing. AWS is composed of some 500K servers, which means it should have a substantial negotiating power against hardware vendors. I wonder when will come the day, when buying a virtual server at Amazon will be cheaper than buying your own hardware.
There are very few tech startups these days that don’t rely, in whole or in part, on Amazon Web Services. The power of the elastic cloud means small startups with limited resources and employees can scale quickly to great size.
- Amazon S3: 905 billion objects stored and counting (zdnet.com)
- Amazon Web Services Explained (arnoldit.com)
- Why Zynga loves the hybrid cloud (tech.fortune.cnn.com)