Recently, Amazon announced the launch of a new virtual computing service called "Elastic Compute Cloud" or EC2. The company claims the solution offers easily scalable computing on demand to developers. The service works in conjunction with another service that the company launched in March, Amazon's Simple Storage Service or S3.

Each virtual server instance is equivalent to a 1.7Ghz Xeon CPU with 1.75GB of memory, 160GB of local disk, and 250Mb/s of network bandwidth. Amazon claims the new service will reduce the time required to obtain and boot a new server and allow for scaling.

And of course, a person can get as many as they like. The price? Well, you only pay for what you use, and the current published rate seems to be $0.10 per instance-hour consumed. At first, that doesn't sound too bad. But, when you start doing the math, that translates to about $72 a month. And that doesn't include data transfer yet! Data transfer is going for $0.20 per GB of data transferred outside of Amazon (i.e. Internet traffic). Data transferred within the Amazon EC2 environment, or between EC2 and S3, is free of charge.

The company lists the following information on their Web site:

Amazon EC2 Functionality

Amazon EC2 presents a true virtual computing environment, allowing you to use web service interfaces to requisition machines for use, load them with your custom application environment, manage your network's access permissions, and run your image using as many or few systems as you desire.

To use Amazon EC2, you simply:

• Create an Amazon Machine Image (AMI) containing your applications, libraries, data and associated configuration settings. Or use our pre-configured, templated images to get up and running immediately.


• Upload the AMI into Amazon S3. Amazon EC2 provides tools that make storing the AMI simple. Amazon S3 provides a safe, reliable and fast repository to store your images.


• Use Amazon EC2 web service to configure security and network access.


• Use Amazon EC2 web service to start, terminate, and monitor as many instances of your AMI as needed.


• Pay for the instance hours and bandwidth that you actually consume.

Service Highlights

• Elastic - Amazon EC2 enables you to increase or decrease capacity within minutes, not hours or days. You can commission one, hundreds or even thousands of server instances simultaneously. Of course, because this is all controlled with web service APIs, your application can automatically scale itself up and down depending on its needs.


• Completely Controlled - You have complete control of your instances. You have root access to each one, and you can interact with them as you would any machine. Each instance predictably provides the equivalent of a system with a 1.7Ghz Xeon CPU, 1.75GB of RAM, 160GB of local disk, and 250Mb/s of network bandwidth.


• Designed for use with Amazon S3 - Amazon EC2 works in conjunction with Amazon Simple Storage Service (Amazon S3) to provide a combined solution for computing and storage across a wide range of applications.


• Reliable - Amazon EC2 offers a highly reliable environment where replacement instances can be rapidly and reliably commissioned. The service runs within Amazon's proven network infrastructure and datacenters.


• Secure - Amazon EC2 provides web service interfaces to control network security. You define groups of instances and their desired accessibility.


• Inexpensive - Amazon EC2 passes on to you the financial benefits of Amazon's scale. You pay a very low rate for the compute capacity you actually consume. Compare this with the significant up-front expenditures traditionally required to purchase and maintain hardware, either in-house or hosted. This frees you from many of the complexities of capacity planning, transforms what are commonly large fixed costs into much smaller variable costs, and removes the need to over-buy "safety net" capacity to handle periodic traffic spikes.