This is a great signal to Amazon AWS customers that EC2 is endorsed for large enterprise use. I'm not saying that it is ready or that it's actually endorsed. However, that's what Blue shops will think.

I wonder if existing Websphere/DB2 users will see value in switching over given that they've already paid for their licenses. Will IBM cut a three-way deal with Amazon to reduce per-hour costs?

It's not likely that organizations considering EC2 for new development will choose IBM on EC2 -- forward thinking folk aren't too keen on $20K/server licenses when the Open Source stuff is better.

So, I'm left to conclude that Amazon is the winner here. They get credibility with organizations that value what Big Blue says, and those organizations might choose to deploy non-Blue systems on EC2.

The entry-level editions of DB2 and WebSphere Application Server are both free. They aren't open source, but you certainly don't have to pay $20K. DB2 has far superior XML support than any open source database, so forward thinking developers can get a lot of value there for certain applications. http://www-01.ibm.com/software/webservers/appserv/community/ http://www-01.ibm.com/software/data/db2/express/

I agree on the merits of DB2 -- I've used it before, and it seems pretty nice.

The free versions are great until you want to scale vertically:

    * Processor: 2 cores
    * Memory: 2 GB

That's the limits unless you pay for support. It goes up from there.

A quick way to increase your cloud expenditure by 64x - run WebSphere Portal on your EC2 instances :)

ahh no AIX on the cloud??

got my hopes or fears up

As an AIX user/victim for a long time I was hoping/fearing to see that as well. :)

Ah, AIX isn't too bad if you get the GNU utilities installed.

I'm sure mainframes by the hour are in the pipeline.

It's my understanding that they've been there for years. IBM will install a mainframe with N cores even if a company only wants to pay for N/2 cores initially. Then, the company can ask IBM to turn on the switch (or just turn it on themselves and be honest?) and increase its capacity. No idea if they can throttle back, say after Christmas, though. Of course, it's not a perfect parallel as IBM parks the whole thing in the customer's own datacenter. I think there may also be some pay-for-mips options as well.

IBM still charges big banks CPU time on the bank's own hardware.

Big bank backend apps are written to sleep as much as possible, and then do everything all at once in order to save on CPU costs.