The first thing I did after a closer look at Amazon’s Elastic Compute Cloud (EC2), was to check-out its pricing. I have read everywhere that cloud computing is such a cost saver, so I was curious to know how much it would actually cost to run a virtual server at EC2.

At first, prices appeared to be quite low to me. I mean, $0.10 per hour for a server appears to be pretty cheap. My coffee consumption seemed more expensive, or so I thought. But when I calculated its yearly price, it became clear that even I can’t drink that much coffee! The story could end here, if I didn’t stumble upon Amazon’s Simple Monthly Calculator.

I realized that I must have somehow missed the fact that there are other available options other than an hourly rate (virtual server). However, quite a few other cost factors come into play here that you should be aware of. In fact, the “simple calculator” looked extremely complicated to me. I was unfamiliar with many of the terms used, even though, I have read quite a bit about EC2 on Amazon’s web site.

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In my last post I complained about Amazon EC2’s complicated pricing structure. Today, I will chat a little about my pricing experience with my own server. Before I continue I should say that my somewhat negative remarks about EC2 in recent articles don’t mean that I dislike Amazon’s cloud. On the contrary; I like Amazon almost as much as I am a MS fan boy. Cloud computing is still in its infancy, so it is only natural that things have to mature.

Okay, let’s start with Amazon’s Simple Monthly Calculator. When you open the page, you will recognize that Amazon S3 (storage) is the only service that is already checked. The reason why this service is often essential for other services is because you always need a place to store your data. Hence, you have to include it in your price calculation.

S3 is needed for EC2 if you want to bundle AMIs (store OS images). Thus, S3 is not really necessary to run an EC2 instance (virtual server), but I think most EC2 customers are using this feature. There are five different factors that determine your monthly S3 costs: storage (GB-months), data transfer-in, data transfer-out, PUT/LIST Requests, and other requests.

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In my last article in this series, I discussed the storage for my virtual server in Amazon’s cloud. Today I will focus on the bandwidth and instance costs. As we will see, things are getting a bit more expensive now.

Amazon EC2 bandwidth costs

One of the things I really dislike about EC2 are the bandwidth costs. One GB inbound data transfer costs $0.10 and one GB outbound traffic costs $0.17. This doesn’t seem to be much. However, in my case the bandwidth costs are a significant part of the overall monthly fees. In September, I paid about $15 for data transfer, which corresponds to approximately 90GB. I enabled HTML encryption in Apache after I moved to EC2, but this didn’t really help because most of my traffic comes from the screenshots. I also download backups of the database and the screenshots every day, which equals up to 15% of my monthly bandwidth costs. In my view, external backups are absolutely necessary because if someone hacks your Amazon account , then you might lose all your data even if you have backups within cloud.

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