[ksec]

Let's be fair, you are actually paying extra for elastic capacity. I.e You expect to have a 2nd Server Ready when ever you need. Not to mention the Cloud is suppose to add a little redundancy, so in case your server fail you could switch on another in an instant.

So in reality I will always times the cost of server ( over X months period ) + colocation / month by 2.5. And Double that to give them Margin for support etc.

That is roughly 5x the cost. And in most cases seems to be what AWS is charging for.

Not saying I agree with their pricing.