Amazon Offers Low-End EC2 Instances (revised) - Analyst Blog

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Amazon.com Inc. ( AMZN ) recently introduced new cheaper server instances, named T2, for its EC2 cloud computing service. The prices of these instances start at only $0.013 per hour ($9.50 per month), making them the most affordable Amazon EC2 instance option. They are available in the majority of AWS regions, apart from Northern California, China and the AWS GovCloud regions.

These instances are basically designed as per the demands of customers to build low cost applications, for which consistent high CPU performance is not necessary. Instead they offer steady baseline performance and have the ability to scale up to full CPU power upon the application of credits accumulated by normal usage. Amazon believes that these instances are adequate for web servers, developer atmospheres and small databases. Moreover, they can offer high-capability, cost-efficient storage choices to customers when used with Amazon Elastic Block Store (EBS) General Purpose (SSD) volumes.

The latest offering will help Amazon to maintain and increase its share in the fast-growing cloud computing field. The T2 instances will likely help Amazon attract and retain existing developers who require a single independent server only a few times a day for particular business processes. Such developers do not require high-end instances. Therefore, the e-commerce giant can now prevent market share loss to low-end virtual private server providers like Linode and Digital Ocean.

These instances can be launched using the different applications on the Amazon Web Services ("AWS") platform such as AWS Management Console, AWS Command Line Interface ("CLI"), AWS SDKs, AWS Marketplace as well as third-party libraries.

The Amazon Elastic Compute Cloud (Amazon EC2) is an online service and forms an integral part of its cloud computing platform, AWS. It allows developers to configure cloud capacity rapidly with minimum friction and simplifies web-scale computing. It permits developers to use Amazon's computing environment with complete control over computing tools to build applications that are less prone to failure.

It offers features such as virtual computing environments, known as instances along with pre-configured templates for the instances, secure login information for instances using key pairs and many more features to swiftly build and deploy applications.

We remain extremely positive about AWS's growth prospects and also expect Amazon to remain one of the leading players in the fast-growing e-commerce market.

Amazon shares currently carry a Zacks Rank #4 (Sell). Other better-ranked stocks worth considering are Akamai Technologies, Inc. ( AKAM ), Google Inc. ( GOOGL ) and Rackspace Hosting, Inc. ( RAX ), all carrying a Zacks Rank #2 (Buy).

(We are reissuing this article to correct a mistake. The original article, issued last week, should no longer be relied upon.)
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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