Amazon EC2 Reserved Instance Pricing – Beware Dedicated Hosting Companies

I think Amazon just fired a major show across the bow of dedicated hosting companies like ServerBeach and ServePath with their new reserved instance pricing.

I just ran the pricing numbers again and Amazon EC2 is almost the same as we’re currently paying if we pay up front for the year. Of course we’d require more hardware (about 2x more servers) and this might yield more maintenance costs on our end.

This might not be fair of course because our current provider doesn’t require us to pay up front. If we did we could probably get another 10-20% off or so…

That said, with EC2 you have the ability to dynamically expand the size of your cluster and add new machines.

Rackspace, ServePath, and others are flirting a bit with virtualization and cloud services so maybe these guys are a step ahead of the curve.

I think one major caveat for dedicated hosting and cloud hosting is that you can’t deploy custom hardware.

No SSDs, no large RAID storage arrays, etc.

This stuff sounds expensive but deploying a slightly different architecture can have significant savings. For example, I really want to buy storage arrays with 15 1TB drives for our bulk storage arrays.

The new Intel SSDs also look pretty interesting. The only way to know for sure is to purchase and deploy this stuff.


  1. Another problem with hosting is the network. I really care that I have gigabit bandwidth between all my nodes. Most hosting providers don’t have enough bandwidth between their switches, and won’t keep your instances together.

    A third problem is resource ratios. A provider that only sells a fixed ratio of memory to disk to cpu to network isn’t going to make you happy if you need a lot more of one of these.

    Hosting probably works great for non-demanding applications.






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