An Amazon m2.4xlarge instance (High-Memory Quadruple Extra Large Reserved Instance) with Heavy Utilization on a 3-year commitment costs $9'660 for the 3y term and 3 * 365 * 24 * $0.454 = $11'931 in usage fees, which means a $21'591 total, $7'197 per year or $600 per month (EUR 458 per month at the current exchange rate).
458 EUR versus 49-60 EUR is 9x more expensive at full-time usage. (instance type and price data extracted from http://aws.amazon.com/ec2/instance-types/ and http://aws.amazon.com/ec2/pricing/ ).
If you were to consider just the Amazon Heavy Utilization term commitment for 3 years, that's still $9'660 / 3 / 12 = $268 (EUR 205) each month.
The EX 4S looks like a very compelling alternative for many use cases but saying that its 9x cheaper is comparing apples to oranges.
You can rent 3 Hetzner servers to deal with 300% load spikes or improve reliability. And you're still 3 times cheaper then EC2.
Or as others have written you can buy 3 boxes at hetzner and scale 300% ;)
Solution?
A long term contract is the perfect comparison because it's a similar service, you know you'll be using the capacity so you pay up front to have it 'reserved' and in exchange receive reduced prices. Normally with EC2 you'd buy 1 instance and then spin up 8 more on demand, with hetzner you just buy 9 machines and pay the same price you'd pay for 1 AWS machine. When your load spikes you've got 8 extra machines to handle the load. Voila, "auto scaling".
I don't know very many businesses that need to scale beyond 8X capacity for an afternoon. If you really think you need the EC2 API to add and remove machines on demand just install UEC.
It may be comparing apples to oranges but I can tell you that when I need fruit if apples are a $1/lb and oranges are $9/lb I buy apples.
Personally, I think the XS29 @ $299 per month would have been a much better comparison, with 15 drives you could push through some serious IO which would make it suitable for running a database on.
Some would say this isn't fair because you're not including elastic scaling which AWS supports, however you can't elastically scale with a 3 year commitment. Further its hard to estimate how much scaling you'll need because that's a highly variable figure.
But you can say that you will need to keep some number of servers up and running 24/7 for your service.
I think it would be a more perfect comparison to compare AWS's on-demand price to Hetzner with the built in higher performance of the 4S considered as a hot standby for scaling. (I don't know how long it takes Hetzner to provision extras, though I hear its relatively fast.) Since servers are cheap (at Hetzner, at least) it seems reasonable to have 1 or 2 extra spun up if you really have spiky traffic.
Since I'm planning to get a cluster of Hetzner boxes to support a Riak distributed cluster, and each Hetzner box is over provisioned for my needs (if I get a 4S I think they will be way over-provisioned, leaving a lot of headroom for this "elastic scaling" issue)... I think I'll compare the price of the same number of each boxes. (The AWS box has less performance, but I can elastically scale if I need to, and I'll just give the cost of those short term scale-ups to Amazon for free in this example.) The results may not be a perfect example for whatever others are considering, but it is a reasonable comparison for my purposes. (my service is a big data service, involving a lot of map reduce, requiring a cluster for operational simplicity and reliability as well as the ability to scale to millions of customers. I don't know if we'll get millions of customers, but one of our closest competitors had millions of customers within a few weeks.)
Amortizing the 4@ m2.4xlarge = 4* $600/month = $2,400 (using the $600 for the reserved instance costs from vladd's example.)
4@ Hetzner 4S = $149 Euro setup fee, amortized over 3 years = 4.14 Euro/month Add the 49.58 Euros in hosting = 53.71 euros x 4 servers = 214.87 euros or $282.50 a month.
So, for my cluster, AWS is 8.5 times as expensive.
I think that $282 per month is a lot easier for a scrappy startup to handle than $2,400 as well. This brings "big data" within the realm of undefended mortals.
Many people use AWS for all the extra services that AWS offers. The value of these services is, of course, subjective, as some startups will need them and others won't. But they all are based on a custom Amazon API which means if you build your architecture across many servers at Amazon you've got a fair amount of lock-in.
For me, I'll take the 8.5X reduction in costs, over lock in anyway. If Hetzner starts performing poorly, I can migrate without too much difficulty, and without having to re-architect my service.
Quite apart from the ability to buy by the hour, the Hetzner offering really isn't suitable for processing any data you care about - it's not using ECC RAM, and the processor used doesn't support it.
In one study (http://www.cs.toronto.edu/%7Ebianca/papers/sigmetrics09.pdf), strong correlations were found between age, usage and error rate. Before using a server without ECC RAM, it's worth doing a quick estimate of the amount of data you intend to move around, and whether it's worth it to you (and, more importantly, your customers) to save a little money going with a non-ECC platform.
http://www.hetzner.de/en/hosting/produkte_rootserver/ex6
a little more expensive (69 EUR) and less RAM (16 GB) but using ECC.
[1] http://blog.cloudharmony.com/2010/05/what-is-ecu-cpu-benchma...
The recent buzz is the first time I see them mentioned on US-centric sites though, if memory serves.
As for your question, it appears that many people find the price/performance ratio of the EX 4S compelling.
