
Lower Pricing for Amazon EC2 Reserved Instances - peter123
http://aws.typepad.com/aws/2009/08/lower-pricing-for-amazon-ec2-reserved-instances.html
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mdasen
As a basis of comparison:

For $40/mo, you can get a 1.7GB server from EC2 with one year commitment or
$31/mo with a 3 year commitment.

With the Rackspace Cloud (formerly Mosso), you can get a 1GB server for $44/mo
or a 2GB server for $88/mo.

Likewise, a 7.5GB EC2 instance is now $161/mo with one year commitment and
$125/mo with 3 year commitment.

Rackspace charges $350/mo at their 8GB level.

15GB EC2 - $322/mo 1-year; $250/mo 3-year. 15.5GB Rackspace - $700/mo.

So, that's a substantial savings over the provider most like EC2 - bandwidth a
la carte, SLA, hourly pricing - if you're able to commit.

 _The sad part of this is that it only applies to newly purchased EC2 reserved
instances._ If you bought a reserved instance yesterday, you're in at the old
pricing. And that's kind of crappy of Amazon. That's my hesitance in locking
in for a 3-year term. As technology progresses, you're locked in. Granted, the
rates are wonderful, but it would be nice if Amazon promised that we wouldn't
get passed by on changes like this.

~~~
DenisM
> If you bought a reserved instance yesterday, you're in at the old pricing.
> And that's kind of crappy of Amazon

You're not thinking it through. Suppose the cost of the machine declines over
time as a series over 5 months: 9,8,7,6,5. They could charge you those numbers
each month, or they could charge you $7 each months on upfront commitment.
Either way they recoup the cost and you are paying the same.

However, with monthly plan you have try to predict hardware price declines in
your business plan and you bear the consequences of getting it wrong. With
commitment plan, you can lock in the expected savings immediately and put it
into your business plan. If Amazon gets it wrong they eat the cost, if they
get it right they win.

This is a classical risk swap, and it allows you to focus on your business,
not tracking the changing environment.

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chipmunkninja
Gaaaa! And so soon after I just purchased a 3 year lease on my server.

But even at the old rates, it's such a good deal, I'm really not that upset
about it :)

