Question: I started out with Amazon EC2 as a monthly host for my project. I am running a 'small' Windows 2k8 instance with SQL server. This is the HW that I am getting:

```
1.7 GB memory
1 EC2 Compute Unit (1 virtual core with 1 EC2 Compute Unit)  [2.7 GHz CPU]
160 GB instance storage
32-bit platform
I/O Performance: Moderate

```

Now I tend to see people stating that they I can get better deals with a VPS, which implies a good deal less than the $90/month I currently pay for EC2... However, this does not seem to be the case. VPS offerings of similar specs (Win2k8/sql/1.7GB etc.) are almost identical in cost, but don't give me the lock-in free advantage of EC2. So, am I missing something?

Answer: 
[Spot pricing](http://aws.amazon.com/ec2/spot-instances/) is another really good way to save costs on EC2, assuming that you don't mind some unexpected downtime (i.e. not the best solution for production apps). Based on recent pricing history, you could cut the monthly cost for an m1.small Windows instance down to about $60 / month using a spot priced instance.
Did you look into Rackspace Cloud (rackspacecloud.com) or Slicehost (slicehost.com)? Both are owned by Rackspace, but they have different pricing structures that might meet your needs better.

For my needs, I only spend about $11/month + bandwidth for my own cloud hosted server. For me it seems so close in price that having the flexibility of spinning a new server at any time is preferred. VPS usually requires a monthly contract.