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I have a rackspace linux server with 512 MB of RAM and a Linux Micro instance on EC2 (it has 613 MB of RAM).

I wanted another bulkier instance for a new web app our company is deploying. I am planning to go with Amazon standard instance (which has 1.7GB memory, costs ~$10 if reserved for 3 years). A server with the same amount of RAM would cost me lots of money on Rackspace Cloud(costs $87), I don't understand why there is such a difference, Am I missing something?

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Are you looking for reserved instances, or cloud services? It looks like you may be confusing the two. –  Andrew M. Dec 14 '10 at 5:59
    
I am looking for reserved instances –  Khaja Minhajuddin Dec 14 '10 at 6:27
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3 Answers

I think Amazon is just a better deal all around. They're always releasing new features and enhancements, have much more capacity and more flexibility when it comes to customizing a server to meet your needs. when you factor in that they are also less expensive, it becomes a no brainer.

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up vote 1 down vote accepted

I guess I didn't understand the amazon pricing model very well, I actually brought a new reserved instance, and it seems the $350 upfront charge for a 3 year term of a reserved instance is just one part of the equation. Amazon still charges $0.03 per hour for your instance.

Bottomline: For a 1.7 GB ec2 instance you end up paying (350 + (0.03 * 24 * 365 * 3))/(3*12) = ~$32

Still amazons $32 against rackspace's $87 is a bargain :)

Found a few resources which discuss the same:
- http://aws.amazon.com/ec2/reserved-instances/#4
- http://stackoverflow.com/questions/3821324/how-to-reserve-a-running-amazon-ec2-instance
- http://news.ycombinator.com/item?id=1966352

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You are comparing apples to oranges when it comes to prices. First you always get a better deal when paying in advance which is the case with Amazon. Rackspace does not offer anything like AFIK.

When you look at them head to head EC2 comes out slightly cheaper (not as large as you mention, its like $62 compare to $87) but then you need to remember things like EBS you will need to pay for if you want the server to survie a crash or data survivability. You also have some technical difference with some claiming better performance with Rackspace Cloud compared to EC2. Also Rackspace is rolling out Managed Cloud Server which if they use the support from their current Manage server will be great (also will cost a lot more then EC2 but their I get the feeling I am on my own).

There are a lot of pros and cons of both that I wont go in to (google can answer that) but they both provide unique things that the other does not.

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