Amazon has a new web service in limited Beta, Amazon EC2 [techcrunch take here], a compute-on-demand facility that’s very interesting and different from the standard hosting models already out there. You pay for exactly the computing power you need: $0.10/CPU-hr [correction: it's a bit more at $0.10 per uptime hour], plus Amazon S3‘s storage pricing: $0.15/GB/mo storage, $0.20/GB transfer. An “instance” (the Xen VM your app runs in) is resourced like a 1.7Ghz Xeon CPU with 1.75GB of RAM, 160GB of local disk, and 250Mb/s of network bandwidth (bursting to 1Gb)
This looks particularly interesting for a small web business like leancode. Why? Because there’s so much variability in how much computer power I might need. I’m trying to attack niches — meaning, I’m throwing small pieces of spaghetti at the wall. If I deploy with EC2, and the service doesn’t take off, I pay very little. If the service does take off, EC2 scales transparently up to (the equvalent of) the computing power of a dedicated server, with all the connectivity and hardware reliability of a large entity like Amazon. At that point, the pricing is more expensive than having a dedicated server — but I only pay if I’m already succcessful.
On the business side, what’s so interesting here is how this can lower the barriers to entry for small, yet-unproven web services. We can launch them, be set up for success, but have less downside (at least in computing cost) for failure.
On the technical side, Amazon is pioneering another interesting element — you set up the server by creating a filesystem image (called an AMI-Amazon Machine Image) which is ultimately loaded into a Xen Virtual Machine running on Linux boxes at Amazon. Unlike true VM hosting, Amazon does not guarantee the persistance of anything other than the original image. If you want to save something, you can’t just save it to the filesystem. You have to save it via web services to the S3 service or something else.
But my first project here — chartpart — does not require any persistant storage yet (other than a cache), EC2 is already a fit, and a very attractive one. If they get out of limited beta, I’ll seriously consider the move. Amazon EC2, along with the other Amazon Web Services, are successfully leading a potentially radical shift in how we think about computing resources as a true, scalable cloud of services. And that will create lots of opportunities, for those large and small alike.