[rkalla]

Just a reminder to everyone that prices out the flat On-Demand rates of Amazon, a 3-year reserved instance price is 48% cheaper than OnDemand.

So if you know what your deployment needs are, take the On-Demand price and roughly divide it in half for your real cost-per-month (with a majority paid up front).

If you don't know what kind of deployment you need, then yes, running everything on-demand can be pricey compared to alternatives.

[ridruejo]

In addition to reserved instances, there are a couple of other ways you can achieve cost-savings for common situations. If you need to run background tasks (like video encoding, reports, etc) you can try running spot instances at a fraction of the cost of an on-demand instance. You run the risk that the instance is terminated, but you can always spawn a new one without affecting the main service, since basically you do not care if the task finishes a couple of minutes later. Another one is scaling up and down base on demand. If you run, say, a SugarCRM instance for your sales team, you can have it run in a Large instance during the week, 9-5pm, when it is going to be in full use by multiple people. Then, the rest of the time you can scale down to a small or micro instance. It is still going to be available, but at a smaller cost.

[sorenbs]

Is that a fixed price for the next 3 years then? I would expect normal prices to at least be cut in half 3 years from now as hardware gets cheaper.

[ridruejo]

You pay a fixed price for the reservation and then per-usage fees. Usage fees will drop as Amazon reduces them, but the reservation is a one-time deal