I am a keen follower in news related to Amazon S3. It seems to be reliable, scalable and a cheap service.
However, web hosts do not seem to be overly scared. I have not noticed any major drops in prices since Amazon and Google released their 'Cloud' based platforms.
Is there a reason for this? Or are web developers simply not aware of the possibilities behind Amazon's offering yet?
Amazon S3 is a file storage service, you can't run dynamic sites on it.
Amazon EC2 is a VPS service, requires system administration knowledge and is more expensive.
Google App Engine doesn't offer a relational database.
A typical classical (shared) web host customer can't run phpBB on either of these. I imagine that's why they aren't overly scared. Yet.
I've been using S3 and EC2 for a little while now and the possibilities are just awesome. Imagine that you have an idea for an application that potentially could attract millions of visitors. With traditional hosting you would have to do quite an upfront investment to get hardware that could handle all these potential visitors. But what if those visitors never come? Services like EC2, Slicehost, Rackspace etc. let you easily scale up or down. This is very powerful as you can imagine.
I think traditional hosting companies are still a bit in denial. They've made massive investments in both hardware and infrastructure but their investments don't come close the that of the big guys like Amazon and Google. I think this cloud thing is really going to take of in the next couple of years because it's just the next layer of abstraction from a technology point of view.
Both S3 and EC2 provide slightly different services than the typical web hosting package.
The typical unlimited web hosting you may see advertised is marketed towards users with fairly basic needs. Email, blog hosting, forums, etc.
EC2 is typically geared towards the more advanced users who need to scale on demand. Typical cases might be an ecommerce site during the holiday shopping season or even something like the site for The Masters (golf) during the week of the tournament. With EC2, scaling the compute resources to meet these needs during peak times, and then backing off during non-peak can be very cost effective.
I typically equate EC2 as a competitor for the Dedicated Server hosting packages. You likely do not see a decrease in price, since many of the costs are fixed. (Rack space, equipment cost, power, cooling, etc.) Amazon allocates virtual machines when you reserve resources, which means they get around a lot of these physical limitations by virtualizing the hardware.
Personally, I believe we will start seeing a major shift to the cloud for many hosts because of the advantages virtualization brings.
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