As you probably know, Amazon Elastic Compute Cloud (EC2) offers a new way to purchase computing power - you rent a virtual server instance for 10 cents/hour versus buying an actual server.

The usual assumption is that EC2 should be cheaper than buying a real server. But, lately, I’ve been wondering why we make that assumption?

Below are 3 reasons why I think EC2 should actually be more expensive than a real server.

1. Convenience - even the fastest hardware vendor will take days if not weeks to deliver a new server. With EC2, you can have as many servers as you would like, and they will be ready in a few minutes. We are accustomed to paying more for convenience like this (i.e. express shipping, home delivery, etc), so why should computing be any different?
2. No buyer remorse - how often have you purchased the wrong server? Maybe it is more powerful than you need? Maybe it is less powerful than you need? Usually we just buy as much as we can afford and live with the consequences. With EC2, there is no buyer remorse. You can choose amongst a set of hardware archetypes to meet your needs - you are billed hourly, so you can literally ‘trade in’ your server whenever you need to without any kind of penalty. That seems like a benefit that we often overlook.
3. Portability - a real server might be close in cost or even cheaper in the long term than EC2. But, what happens if you need to move it to another data center? Or another continent? With EC2, you can move your server instance between zones (i.e. data centers) and regions (i.e. continents) with a few clicks of your mouse.

Thanks!

Eric.

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