>Instead I'm proposing an arbitrage that works one layer up -- on top of S3. Is transfer from s3 to ec2 free? in which case, that might work. Otherwise you'

>Instead I'm proposing an arbitrage that works one layer up -- on top of S3. Is transfer from s3 to ec2 free? in which case, that might work. Otherwise you'd get eaten alive by bandwidth charges between s3 and your compression/uncompression box. >I wouldn't want to compete with Amazon S3. Data safety and uptime would keep me up at night like a mofo. I just wouldn't want to run that company, though I can imagine folks like MS doing it. If you are storing data compressed in your special way on s3, you have the same problems. using non-ecc ram (or ecc ram configured to not crash when bad) and have bad ram on one of your compression boxes? data is corrupted. gone. compression boxes go down? you now have your dreaded uptime issues. Of course, if there is some bug in your compression/deduplication/whatever software, again, you have data loss. I have personally lost much money and reputation trying to make my disk system 'better' by adding complexity and flexibility. After that pain, I now just try to keep the data as simple as possible (mirrors, and stripes of mirrors) I haven't had data loss since I abandoned my SAN. Complexity == admin error == data loss. In a reasonably designed hardware system, data loss is pretty rare without admin error. >I do think there are pieces of cloud storage that will not be commoditized, most notably the peace of mind around data safety and uptime. I wouldn't want to use a small cloud storage provider. Thus: (a) they will be able to charge a premium for a long time, and (b) there will be a smallish number of providers, meaning marketing will be less important in the future than having a good product. If s3 costs keep going down 15% a year (and hard drive costs keep going down 50% a year) s3 will very shortly become a 'premium' provider. While yes, there is room for premium providers, it will be a whole lot cheaper for anyone with significant storage needs to run their own stuff (or to go with a smaller player) I mean, paying premium prices makes sense sometimes, but not all the time. If you are speaking of premium markets, really, I'm the wrong guy to ask; I'm way over on the other end of the spectrum. edit: added more "simple is better"