Fun to look through old EC2 email from back in the day (from 2007):
> We have an account at that is nearing its EC2 limit - we need to be able to create more than 20 instances, preferably as many as you can give us. Our application is exploding - we're doing well over 5M page views / day and it's doubling every 2 or 3 days, so the request is rather urgent. Can you have someone call or email us right away?
I remember at that time that it was just so much more expensive than physical servers at iWeb. Sure it was convenient, but the performance per dollar was something like 1/3 or 1/4. Crazy.
The value in EC2 has never been in straight up cost, it's been in wild fluctuations in scale. In sites like Reddit, where your peak traffic can be 10x or 100x what your average traffic is, the ability to scale up to handle the top 5th percentile without paying a hundred times more year-round is where savings come in.
Now, though, the benefit in AWS is all the add-ons that you can manage through the same system; DNS, messaging, databases, firewalls, load balancing, etc.
That said, we massively overprovision our servers at my company and it's still probably less than half of what we'd pay at Amazon. That pays for my time to take care of the servers, at least.
actually renting servers is cheap.
however renting a stable network isn't.
when you rent servers you either need a overlay network via a VPN or you end up renting a rack (1/3, half, full) and connect it yourself. but as you might guess you are now inside a single datacenter, if it burns or somehow looses it's connection you are offline. that's not a big deal for some sites, but some stuff will suffer from that.
AWS and Clouds are more about networks and traffic spikes than just a bunch of servers. It's also easier to just replace the system in a outage than on most other services where you mostly try to heal it up. On Clouds you just trash it.
We have some small sites on 3 AWS Small instances and a AWS RDS Master-Slave. Whenever one instance breaks or AWS makes a notice that this instance will be recycled we just reprovision it. We are also on AWS Frankfurt which didn't have a real outage yet. Google pricing would be in favor but no RDS Postgres yet, same for Azure (even when we get 130 € per month on 7 accounts for free (startup program) for 3 years or so).
however our software is sold to customers as hardware and not designed to run on a cloud (yet), mostly because of sensitive data.
> I remember at that time that it was just so much more expensive than physical servers at iWeb. Sure it was convenient, but the performance per dollar was something like 1/3 or 1/4. Crazy.
> We have an account at that is nearing its EC2 limit - we need to be able to create more than 20 instances, preferably as many as you can give us. Our application is exploding - we're doing well over 5M page views / day and it's doubling every 2 or 3 days, so the request is rather urgent. Can you have someone call or email us right away?
I remember at that time that it was just so much more expensive than physical servers at iWeb. Sure it was convenient, but the performance per dollar was something like 1/3 or 1/4. Crazy.