Is EC2 really not competitive against a VPS?

Question

I started out with Amazon EC2 as a monthly host for my project. I am running a 'small' Windows 2k8 instance with SQL server. This is the HW that I am getting:

1.7 GB memory
1 EC2 Compute Unit (1 virtual core with 1 EC2 Compute Unit)  [2.7 GHz CPU]
160 GB instance storage
32-bit platform
I/O Performance: Moderate

Now I tend to see people stating that they I can get better deals with a VPS, which implies a good deal less than the $90/month I currently pay for EC2... However, this does not seem to be the case. VPS offerings of similar specs (Win2k8/sql/1.7GB etc.) are almost identical in cost, but don't give me the lock-in free advantage of EC2. So, am I missing something?

Answer 1

I dunno where you live, but here in europe/germany (hosteurope for example):

3 GB RAM guaranteed 
150 GB HDD
no traffic limit
32 EUR

You will get no guaranteed CPU in this package, but usually it's at least 1 core of at least 1.5Ghz which is burstable to more than that (depending on overall server load). The smaller version of this

2 GB RAM guaranteed 
100 GB HDD
no traffic limit
22 EUR

If you don't require windows, Linuxboxes are also available at 17-ish EUR with 2 GB RAM (burstable to 4 GB), 100 GB HDD.

I've had look at Amazon too when I was looking for a vServer and to be honest Amazon just seems quite expensive.

The only pro-amazon thing I can see is S3, EBS and/or the Amazon Cloud Front. However, neither of that I need at the moment, so it wasn't worth for me. Maybe interesting for small companies which know that they will have some good amount of traffic (100-500k pageviews/day with high potential to grow)...