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: 
See this similar question regarding going cloud or vps.

[About to go live: virtual dedicated server or cloud?](https://serverfault.com/questions/139495/about-to-go-live-virtual-dedicated-server-or-cloud)

EC2 really is a VPS, just the pricing model is structured differently.

When you are talking about single instances running 24/7, my comparisons have come out similar to yours, they work out pretty close to the same. Although, you do get some flexibility with EC2 in cases like needing low processing but high disk storage, or vice versa. A lot of the VPS packages are all or nothing, you need more storage, you get more ram and cpu too and pay for them all.

The benefit you get from EC2 is when you only need an instance running M-F 9-5, or you load balance between multiple instances only keeping one up 24/7 then bring others into the pool during peak usage.

And many other scenarios where it's not just run X instances 24/7.
[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.