A note in my inbox this morning announced that Amazon’s EC2 virtual computer hosting service now supports “micro instances” for $0.02/hour ($0.03/hour if you’re confused enough to want to host a web site using Windows):
Instances of this family provide a small amount of consistent CPU resources and allow you to burst CPU capacity when additional cycles are available. They are well suited for lower throughput applications and web sites that consume significant compute cycles periodically.
- Micro Instance 613 MB of memory, up to 2 ECUs (for short periodic bursts), EBS storage only, 32-bit or 64-bit platform.
Pricing
$0.02/hour = $0.48/day =~ $14.50/month.
A small standard on-demand EC2 instance is $0.085/hour (~$61.50/month), so this is a huge price drop for web sites that don’t really need much computing power, who make up a very long tail). The most obvious target is ISPs who offer shared hosting for low-traffic web sites for $10-20/month.
Competing with free
A less obvious, but perhaps more important target for Amazon EC2 micro instances is Google App Engine. As I explained in a previous posting (Costing out Google App Engine, July 2009), Google can afford to offer free hosting up to about 5 million pageviews/month — enough traffic to pay a modest salary from ad revenue — because they know that most sites will use Google AdWords, and Google will get a cut of the advertising revenue. Amazon EC2 can’t offer free cloud hosting the same way, because it would still be Google getting the advertising revenue.
Four other kinds of “free”
By offering such a low price tier, Amazon is probably gambling that people are willing to pay <$15/month for four freedoms that Google App Engine doesn’t deliver:
- Freedom to use languages/environments other than Python and Java.
- Freedom to install out-of-the-box software like MySQL, Apache, PHP, Drupal, and WordPress, etc.
- Freedom from having to mess around in the App Engine sandbox with the data store, etc.
- Freedom to move the application to a different ISP without major modifications.
I suspect that for many users, the ability to just drop in an app without having to spend weeks messing around with JVM-limited language ports like JRuby will be outweigh the price of three beers each month. Of course, thousands of ISPs already offer that freedom through shared hosting accounts, often at a lower price and with decent personal technical support. What else does AWS offer this group that the ISPs don’t?
Quoderat 
You also need to factor in the US$0.10 per GiB per month and the US$0.10 per million I/O operations for Elastic Block Storage (replicated raw hard disks) if you want a drop-in replacement. Amazon says a “medium-sized web database” with 100 GiB would probably cost another US$36 per month in EBS charges, so that’s $50/month, plus S3 charges for backup (you can back up EBS disks to S3 in compressed form). Still cheap and scalable, but not quite as cheap as it sounded before.
Great point, John. 1 GB would probably be more database storage than most small apps need, but I’m not sure about traffic.
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My take (admittedly I’m biased, since I’m on the App Engine team):
One of App Engine’s major advantage is that you don’t have to spend weeks messing around with server configuration, replication, failover, backups, monitoring, and so forth – it’s much more drop-in than a bare server offering can be.
I think, though, that most of the advantages of the new micro instances will be complementary to App Engine, not in competition. Two things spring immediately to mind:
1. Micro instances provide a perfect hosting platform for TyphoonAE, an independent implementation of the App Engine platform. Users wanting to move low traffic apps off App Engine can set up a micro instance running TyphoonAE, and avoid having to modify their code.
2. Micro instances also provide a perfect platform for doing ‘offline work’ for App Engine apps at relatively low volumes. Suppose, for example, that your app generally fits well on App Engine, but you have a few things, such as image recognition or processing, or video transcoding, that require facilities not available on App Engine. A micro instance may be exactly what you need in the way of minimal, low-cost server resources to perform this batch work.
Hi David,
Just came across this comparison of yours between Amazon EC2 vs Google App Engine. Great article. Wanted to know if you’d like to feature it on getcomparisons.com? A project we’ve started to house all the best product comparisons on the web under one roof. You can back-link to this original article of course. Check it out, and if you’re interested, I will send you an invite.
Cheers,
Akshay Arabolu, Founder
Too many copmlmintes too little space, thanks!
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