So as I mentioned we don't use EC2, we use another cloud service, but the economics and technical issues are the same. But on EC2 Dedicate Instance (ie single

So as I mentioned we don't use EC2, we use another cloud service, but the economics and technical issues are the same. But on EC2 Dedicate Instance (ie single tenancy) my guess is that if your application (or, business model) relies on each of your nodes being able to utilize more than your equal share on the host then in fact you would NOT want more than one of your instances to exist on the same physical host, in order to maximize the chances that each instance can grab all of the resources on it's given host. If this is your model, having all your instances on the same physical host would be disastrous. In fact, there's (economic) argument for Amazon offering customers the complete opposite - pay to guarantee that no two instances are ever instantiated on the same physical host.