Amazon today announced addition of EC2 micro instances which is their smallest instance size coming with 613 MB RAM and priced at $0.02/hour. You can read more about the announcement here
http://aws.typepad.com/aws/2010/09/new-amazon-ec2-micro-instances.html
There is a wrinkle though. There is no local (ephemeral) storage so you need to use EBS backed volumes. EBS is charged at $0.10/GB per month along with the charge of $0.10/1 million I/O requests to the volume. That is actually a reasonably good idea since it likely cuts down on I/O subsystem abuse since if you start abusing I/O it will cost you. That said I thought I would run a quick cost analysis to determine how much would it cost to actually run an instance. I have a personal server I use for handling my family’s e-mail, blog and personal web sites. It gets little traffic. I use roughly 30 GB of storage. To find out the number of I/O ops I ran following command
> cat /proc/diskstats | egrep "sd[a-b] " | awk '{print $4" "$8}'
154756 3576927
773387 1844813
This lists number of both read and write ops for both drives in my machine. It adds to about 6 mil iops. Machine was last rebooted 7 days ago making this 25 mil iops per month. On the outbound network traffic side I have consumed 5 GB of traffic so far so => 20 GB per month (charged at $0.15/GB).
Thus the cost breaks down like this per month
Instance cost (3024$0.02) = $14.40
EBS storage charge ( 30 * $0.10) = $3.00
EBS I/O ops charge ( 25 * $0.10) = $2.50
Outbound network traffic ( 20 * $0.15 ) = $3.00
Total: $22.90
Not too bad. A word of warning though. Since these micro instances come with only 613 MB of RAM if you load even a handful of services such as a mySQL database, web or app server you may end up swapping causing your EBS I/O ops charges to go up. I doubt these would be enormous however depending on the level of swapping they could be 25, 50% or 100% higher than what you planned for. Obviously EBS has some nice features such as persistency, snapshotting and ability to boot instances automatically after a failure however it may come with unanticipated cost.
Update: Some have pointed out that instance costs can be even lower if you reserve (assuming 1-yr commit micro instances are $115/year vs. $172 non-reserved). That is true however as I point out the biggest X factor in the whole equation is EBS charges. It’s nothing that will break the bank however I prefer having idea upfront what the cost is. If your use case is a DNS server, mail server, Nagios checker than this fits the bill well however if you plan to use a ticketing system, wiki that uses a DB backend you will likely exceed memory footprint and start swapping.