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Amazon Introduces A Time-limited But Free Entry-level Cloud Computing Offering

By annie shum | October 23, 2010

To help new Amazon AWS customers get started in the cloud, AWS is introducing a new free usage tier. Will this help to accelerate the adoption of IaaS among SMBs?

“Beginning November 1, new AWS customers will be able to run a free Amazon EC2 Micro Instance for a year, while also leveraging a new free usage tier for Amazon S3, Amazon Elastic Block Store, Amazon Elastic Load Balancing, and AWS data transfer. AWS’s free usage tier can be used for anything you want to run in the cloud: launch new applications, test existing applications in the cloud, or simply gain hands-on experience with AWS.”

Below are the highlights of AWS’s new free usage tiers. All are available for one year (except Amazon SimpleDB, SQS, and SNS which are free indefinitely):

AWS’s free usage tier starts November 1, 2010. A valid credit card is required to sign up. See offer terms. AWS Free Usage Tier (Per Month):

750 hours of Amazon EC2 Linux Micro Instance usage (613 MB of memory and 32-bit and 64-bit platform support) – enough hours to run continuously each month*
750 hours of an Elastic Load Balancer plus 15 GB data processing*
10 GB of Amazon Elastic Block Storage, plus 1 million I/Os, 1 GB of snapshot storage, 10,000 snapshot Get Requests and 1,000 snapshot Put Requests*
5 GB of Amazon S3 storage, 20,000 Get Requests, and 2,000 Put Requests*
30 GB per of internet data transfer (15 GB of data transfer “in” and 15 GB of data transfer “out” across all services except Amazon CloudFront)*
25 Amazon SimpleDB Machine Hours and 1 GB of Storage**
100,000 Requests of Amazon Simple Queue Service**
100,000 Requests, 100,000 HTTP notifications and 1,000 email notifications for Amazon Simple Notification Service**

Carl Brooks, the Technology Writer at, provided the following observations:

A Micro instance is a about half a CPU core and 613 MB of RAM, enough to comfortably run the family website or chug away at a smallish database application without insane Web-scale traffic. In fact, it’s about what a pretty high-end server was capable of 10 years ago; those were enough to get Yahoo and Google going, so no scoffing from the power snobs.

There are a few limits: only 10 GB of impermanent Elastic Block Storage, 5 GB of permanent S3, and a maximum of 30 GB of traffic in and out. But, uh, it’s free. Free, free, free. Why? Who knows. Let’s just say that anyone who has guessed what AWS’ operating margins are (the difference between what it costs AWS to run an instance and what AWS charges for that instance) should let those guesses go, because apparently the answer is infinity. It costs so little to run AWS instances that they are just going to give them away like a never-ending supply of cheese and cracker samples at Costco.

And now, of course, AWS users that joined over the last few years are kicking themselves and wondering why they didn’t hold out just a little bit longer. The news is also a startling inversion on the standard “freemium” business model, where you give a lot away in the hope that people buy it later. Amazon has apparently sold enough stuff for real money that they can now give it away. Hopefully this new trend continues and free garden tools and books start showing up on my porch.

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