| Sure. They probably followed a similar reasoning (example with fictional numbers, but probably close to reality): * They have 64GB RAM hosts. * They want to dedicate only up to 85% of the RAM to the Xen instances (keep 15% for the host OS, buffercache, etc). * The Operations/Management team decides to target an overall rate of $1.82/hr per host to achieve desirable profits. * The AWS marketing department has a requirement that instances be priced $.xx/hr (no fractional cents) to evoke "simplicity". * At a first pricing attempt, they see they have the choice of charging $.02/hr and assigning 65536 * .85 / (1.82 / .02) = 612MB per instance * ...or charging $.03/hr and assigning 65536 * 0.85 / (1.82 / .03) = 918MB per instance * They select the first option (612MB/instance) because it is deemed sufficiently smaller than the existing "small" 1.7GB instance offering, whereas 918MB was not small enough. |