Amazon EC2 is too expensive for startups

I’ve just read this article regarding the Amazon Web Services Startup Challenge and I was all eager to give EC2 a try. To be honest, I have heard about Amazon Web Services for quite sometime now, but finally I thought it was time to have a look. The motivation was the fact that I have tried Stax Cloud and noticed it is build on top of Amazon EC2 (Elastic Compute Cloud). I quickly signed up using my existing account hoping there would be a trial or some sort of free access for developers, I was wrong. As soon as I tried to signup for EC2 & S3 I was asked to confirm my credit card details, so I stopped there and had a quick look at the pricing.

Using Amazon’s pricing calculator I tried to enter the same specifications offered by a PoundHost A2 dedicated server and to my shock Amazon EC2 monthly pricing was three times that of PoundHost A2 dedicated server. So what I don’t understand is how would a startup be able to afford using a more expensive service such as EC2?, may be it’s the buzz word ‘Cloud’ and lots of cash coming out of VC funding rounds!

Personally I think Amazon is still got a great deal to do in regards to pricing if they want to compete with the dedicated server hosting market.

  • Stax is free during the beta, but we still believe that we can offer options for bringing monthly charges for EC2 inline with standard hosting by taking advantage of application elasticity.

    To get an application deployed on EC2 24×7, you need to allocate a full EC2 server for the month, which will cost you $70 at a minimum. However, with an elastic platform like Stax, your Java applications can be deployed for 24×7 operations, in a way that allows your application to only use a portion of a server during low-use hours, or none at all during completely idle periods.

    If your application load is always steady-state, cloud elasticity won’t help you much, but if it has peak/non-peak load variation, it could dramatically reduce your costs since you won’t need to pay for a fully dedicated server all the time, which offering you the flexibility of elastic scalability as your load grows overtime.

  • Who the heck does that make sense for? I mean besides traditional users of batch processing? I read that AWS is now a billion dollar income for Amazon – (bout time Bezos.) But I actually thought they were charging for CPU time – that is access time. Nope – that’s a flat per-hour charge for sitting there 24/7/365 that makes the whole thing ridiculously expensive.

    EVEN IF I could allay some of those charges, I’m starting out with a 3:1 handicap minimum over a shared host server. That’s a lot of screwing with. I am suddenly knocked stupid – and what looks stable to me is to have the best of all worlds except for latency and scalability, hosting my own server suddenly looks like the little people’s pot of gold. If I can find an amenable ISP. From there I will keep Amazon in mind only for high-volume spot processing at 1/3 the cost of static use – to bring that site back down to normal.

    This means the target setup is to have a full time host server like NearlyFreeSpeech (.net) where you can serve up static pages and links for NO resting server charges (no monthly fees) and minimal storage and xsfr costs, run your apps on your own server with one or two instancess of XAMPP 24/7 and put up with any latency, or (of course) through free-tier hosted services, and storage.

    I was almost tricked. After 10 hours of study I hadn’t gotten this from anybody. The spot use pricing might change that formula if it’s reliable access – it might just be Amazon’s provision for outrageous-charges at the bottom tier to overflow. Bezos is no dummy.