No catch, you've just discovered how ridiculously expensive EC2 is.

Then why do so many startups (and even established businesses like reddit and Netflix) use EC2?

Reddit and Netflix have entirely different models at their 'web-scale'

They actually DO need to be able to scale servers up and down based on demand-usage, time of day, growth patterns, etc.

For them, the extra EC2 cost is negated by being able to spin up an extra 400 instances in the evenings, and turn them back down after everyone goes to sleep.

Under the dedicated server model they'd ALWAYS need to have an extra 400 dedicateds to handle that peak load (and in fact would need to have far more to handle additional spikes, projected growth, etc.) Those dedicated servers would sit idle, costing them money most of the time.

This is the difference between 'web-scale' and your typical startup's usage pattern.

> They actually DO need to be able to scale servers up and down based on demand-usage, time of day, growth patterns, etc.

Cost wise, your best scenario is usually going to be dedicated or colo + EC2 or similar for overflow / peak.

If you do just dedicated hosting you need to leave enough spare capacity that you feel comfortable handling the spikes for whatever the worst case provisioning time your host has.

It's still cheaper than EC2.

But if you do dedicated + ability to spin up EC2 to take peaks, you can go much closer to the wire with your dedicated hardware, and increase the cost gap to EC2 massively. You don't need as much spare capacity to handle peaks any more. You don't need as much spare capacity to handle failover.

It's rare for it to pay off to spin up EC2 instances to handle inter-day "normal" load changes, though - most sites don't have differences that are pronounced enough over short enough intervals for it to be worth it. If you do the dedicated + EC2 model, your EC2 instances needs to be up no more than 6-8 hours or so on average per day before it becomes cheaper to buy more dedicated capacity.

Also, reddit used to have different budgets for servers (lots) and people (very little), so anything that reduced system administration was a win.

I don't think you'll find that reddit actually spins up extra instances though. They simply run 240 instances (right now). So it still seems like an odd choice, given they could probably reduce that to about 50 instances of dedicated hosting.

Also, they probably get much better rates from Amazon than you or I.

Thanks for the explanation. This comment (and indeed this whole thread) has been very useful to me.

You should not make your own technology judgements based solely on what other people are using. There's too many people jumping on the cloud bandwagon who have no clue what they're doing.

Making technology decisions based on what others are doing is the fastest way to make minor decisions. There's immense value in asking "what does company x do?" choosing that option, and moving on. In my experience time deliberating is time wasted--it's better to make a decision and move on. You can (and should) change later.

> Making technology decisions based on what others are doing is the fastest way to make minor decisions.

Sure, but a minor decision is who prints your business stationery or what kind of toilet paper to buy.

What hardware/networking platform to build your service on is not a minor decision. It will fundamentally affect the architecture of your entire system, and getting the decision wrong will potentially be expensive-with-a-capital-Failed-Company.

Reddit very much regretted using Amazon EC2 EBS disks for their site according to their blog. It killed their site for almost entire days, many times, for a long time. It's taken them months to undo that decision.

That was just EBS, not EC2 or any of the other AWS products. Most of AWS is fairly solid AFAIK, just expensive at certain scales.

Because of the cloud fad. People have always made bad IT decisions based on the flavor of the month. They still do.

Paying $140-$190 per month is already ridiculously expensive.

I pay about $3 per month for a very low-end xen VPS. Sure, I'm not running anything at all resource intensive on it.. but if I was maybe I'd spring for a higher-end VPS for $6, or if I really wanted to get crazy I'd find a really solid one for about $20 a month.

At $140-$190 a month, you'd better be getting a bunch of high-end dedicated servers and fantastic support, or you are getting seriously ripped off.

Hell, given the very modest needs of most small startups, having to shell out even $20 a month is a ripoff.

$140 for a second gen i5 and 8GB of ram is pretty reasonable.

A $20 VPS is only for pet projects. For a startup it's worth it to invest in a/some dedicated server(s). Having some redundant firepower of dedicated servers so that you don't have to worry about the upgrades for a while presents a sweet spot between saving cost and scalability.

My hoster of many years charges for a similar setup 60 EUR, "unlimited" bandwidth (whatever you can pump though 100Mbit within a month), RAID10, etc, 75 GB external backup, as a managed server. And at another big hosting company you get an even bigger package for 45 EUR, not managed though.

However, I remember that hosting in the US is surprisingly expensive for some reason, and has been for many years. Don't know why.

What company are you using?

It may be Hetzner (Germany). They have a 45 € root server with i7 quadcore, 16 Gb RAM, 2 x 3 Tb Disk (link: http://www.hetzner.de/hosting/produktmatrix/rootserver-produ...). I'm very content with what they provide, even good/friendly support.

In my opinion a very good choice. I run a EX4 Box there and i'm more than satisfied with the service they provide.

Recently i fired up a Support Request around 5am and got a response 6am when their support team picks up work. during the day you usually don't have to wait longer than one hour for a support response.

They have awesome hardware for reasonable prices... i migrated everything i own from ec2 to one EX4 box with 8 cores and 16 gig of ram for less than i payed at EC2...

Also have a look at OVH's Kimsufi brand: http://www.kimsufi.com/fr/

i7 + 24GB RAM + 2TB disc + 100Mbps for €50

(they geo-restrict their plans, and I think only the French get unlimited bandwidth; UK people have to survive on "just" 15TB/month, for example)

http://www.kimsufi.co.uk/ is showing unlimited for all three plans when I visit (from a UK IP address). I might have to get one of the lower spec (celeron/atom) machines for myself, do you have personal experience of the company?

Careful of the small-print: "The traffic is unlimited. If you exceed 5TB/month for the Kimsufi 2G, 10TB/month for the Kimsufi 16G or 15TB/month for the 24G Kimsufi the connection will be limited to 10 Mbps." My understanding is that if you do get restricted, the restriction isn't automatically lifted the next month. You might want to check with pre-sales to find out exactly what the process is.

I have had a box with them on and off (more on than off) for the last couple of years. I'm not doing anything critical there, but have also had no issues. Everything seems rock solid (which it should be -- Wikipedia says that "The company has six datacentres housing more than 100,000 machines.") You can reinstall from the web control panel, they rent KVMs, not sure what else to add.

The major things people tend to bring up in forum postings are:

Kimsufi is the "non-professional" brand, and hardware support is slower than the OVH parent. Nothing ridiculous, but you aren't going to get a bad drive replaced within a couple of hours either.

OVH has "low quality bandwidth". Of course, people making this complaint never quantify exactly what they mean by this. I just tested on my "24G" box, and see 30-40MB/s to cachefly, 90MB/s to Leaseweb in Amsterdam, 75MB/s to Linode in London, 3-4MB/s to Linode in Newark and Atlanta, 12MB/s to SoftLayer in Dallas, 10MB/s to SingleHop in Chicago, 11MB/s to Joe's Data Centre. (Of course these are large test files.)

If you're interested, there's no setup fee and no minimum contract length (check this for yourself, obviously), so I'd say go for it.

I might be interested at that.

5Tb as a limit really shouldn't be a problem for what I would use it for.

Then again for what I currently do 10Mbit would not be much of an issue either to be honest, though I'll ask about the procedure to reset this if I do set a sudden bandwidth spike one month.

There is VAT on top of that listed price, but even with that it is still a good deal if the kit and company are up to scratch. Last time I looked there was an extra cost for paying monthly, but that seems to have been removed.

> You can reinstall from the web control panel

That sounds interesting for a dedicated box. Are they using some for of SAN rather than each machine having its own local drives (so they can "reimage" your machine just by dropping its volume on the SAN array and creating a fresh one from template)? Or is this less instant (more like: make the request via the control panel and in X hours a passing support tech will plug a USB stick in and reboot to reinstall)?

Local hard drives, and I guess the (re-)install just boots from the network.

You can customise the partition layout, but otherwise get a standard set of packages for whichever distribution. There's a choice of the usual Linux suspects in 32- and 64-bit, FreeBSD, Open Solaris and Windows Server 2008.

The process is fully automatic and a CentOS install takes about 20 minutes.

I am using netclusive, but I think they only have a German language site. Others and with English site are Server4you or Hetzner.

No; you can get a VPS with those specs in that price range too. It's EC2 that's extremely expensive. I moved $1000/mo in fully utilized EC2 instances to dedicated servers for half the cost.