Amazonaws S3 and EC2 are transforming the landscape for small businesses. Take cheap hosting from a reseller to host your business site and enhance this with cheap storage and video serving space payable on demand to Amazon.
Now they are enhancing their EC2 services as this recent news release shows.
“We are excited to introduce Reserved Instances, an additional pricing option for Amazon EC2 that gives you an option to make a low, one-time payment for an instance to reserve capacity and further reduce hourly usage charges. As with On-Demand Instances, you will still pay only for the compute capacity that you actually consume, and if and when you do not use an instance, you will not pay usage charges for it.
Customers of all sizes continue to enjoy our existing, pay-as-you-go pricing for On-Demand Instances, but some have told us that they are ready to reserve capacity in order to achieve even lower costs. Reserved Instances give you the option to make a low, one-time payment for each instance you want to reserve and in turn receive a significant discount on the hourly usage charge for that instance. After the one-time payment for an instance, that instance is reserved for you, and you have no further obligation; you may choose to run that instance for the discounted usage rate for the duration of your term, or if and when you do not use the instance, you will not pay usage charges on it.
Reserved Instances are complementary to existing Amazon EC2 On-Demand Instances and give businesses even more flexibility to reduce computing costs. Because Reserved Instances function identically to existing Amazon EC2 On-Demand Instances, you can now plan for an anticipated amount of capacity using Reserved Instances and then instantly spin up On-Demand Instances if your compute needs exceed you reserved capacity. Of course, you can also choose to handle all of your capacity needs using only On-Demand instances or only Reserved Instances — it’s entirely up to you. Reserved Instances are available in 1-year or 3-year terms.”
Obviously you need to do a small calculation to check that the cost of the up front payment is covered by the ongoing savings on the amazonaws usage charges.