I agree it doesn't sound very good for Rackspace and I would have really hated the phone signup hoops they apparently make you jump through for no good reason.

I agree it doesn't sound very good for Rackspace and I would have really hated the phone signup hoops they apparently make you jump through for no good reason. > But the prices are a fraction of what it would take to run on EC2. I'm not sure that's true for every use case. When I moved away from MediaTemple in search of a real virtual server, I wanted a major hosting company that gave me a reasonably good web interface and community support, which is why in the end I just had to decide between Rackspace and EC2: On Rackspace you can have a 512 MB RAM instance with 10 GB in and 1 TB out (I'm not sure how much disk space) coming an at $202.70 per month. Now, EC2 is more complicated because they make you pay for things like I/O operations, but base cost for a Micro instance with 613 MB RAM + 10 GB in and 1 TB out makes $175.70 plus some change for I/O. So from where I'm standing they're both in the same league with pricing, and it's not surprising that the major component of each offering is bandwidth cost, both offered at comparable levels. Just the servers themselves cost $22.08 at Rackspace and $5.11 at Amazon. Obviously, this is all with a big YMMV. In my case, I went with AWS, mainly because it felt cheaper and was easier to set up from Germany (this is where the phone verification shenanigans come in the article is talking about). They say EC2, especially the EBS-based Micro instances, are slow and crappy. But my instance is pumping out moderately complex PHP pages to visitors at a rate of about 8 requests/second, with an average speed of 10 milliseconds per request, with a Linux load avg of 0.04. I'm quite happy about that. So that's not a high load scenario but my guess is it's fairly typical for some dude with a couple of low-profile web projects - and EC2 was the right choice for that.