But as far as AWS micro is concerned, it was an example for starter size. These are easily scalable I believe either through Elastic Beanstalk tools or manually. On RDS for example (which I am more familiar with) if you have a small DB instance that is hitting CPU limits, you right click & hit modify... about a minute later it is now whatever size you want. And I think their instances get large enough that you would have to be running a reallll heavily-trafficked app to actually hit a wall. (I haven't read enough about EB which is why I asked the question but I think it is auto-scaling)
Again, maybe not as cost effective as dedicated but I think at this point it may be a good compromise between the two while the container community works out some deployment hurdles.
We use Elastic Beanstalk + RDS in a production environment. Its okay, but expensive and the performance is lackluster. We'll be moving to physical hardware shortly.
I think these are all "noisy neighbor" issues and I would gladly leapfrog up from one host to another so long as the process isn't much more complicated and the performance is more reliable.
Using AWS Micro instances will not solve your problem, no matter how many you have. It's also worth noting that AWS costs around 5x more than a good dedicated server, which is a factor for many people.