[This is from a comment I left on “Jonathan’s blog”:http://blogsiegel.blogspot.com.]
I have to admit I am disappointed at the pricing of EC2. At this rate it costs $72/mo for a not so hot machine, without persistent disk storage, and without bandwidth. Once you add bandwidth and storage you easily exceed the costs of a dedicated server at a decent hosting company
Compare this to S3 where you have to pay at least 2x for anything remotely similar. With EC2 there is no such 2x factor.
So the only advantage over another hosting company is that if the thing fails you have a higher chance of being able to get a new box up and running within minutes, and if your usage skyrockets it’s quick to get more machines online. But we really don’t know about the reliability and scalability of EC2 since Amazon doesn’t reveal any details whatsoever. At this point it could well be that they have all of EC2 in a couple of racks at a single location…