I've run the numbers for our PCI-compliant setup about 1.5 years ago and Amazon was about 3-4x more expensive than the average bid for my RFP for several smalle

I've run the numbers for our PCI-compliant setup about 1.5 years ago and Amazon was about 3-4x more expensive than the average bid for my RFP for several smaller hosting providers for a mix of dedicated and virtual servers. Another thing I've discovered with AWS (again, it was 1.5 years ago) is a horrible network latencies even inside the same data center on the same VPC: on a "normal" gigabit switch in a dedicated setup I would expect stable ping < 0.5msec with spikes to 1-2 msec on a loaded network. With Amazon, the pings were rarely below 10-20msec inside the same data center in the same VPC. It is easy to explain since Amazon probably doesn't allocate virtual servers "together" on the same router thus you have extra delays on going between multiple busy routers. In the same time it is pretty bad for many things (e.g. MySQL Galera Cluster that we use). So, my take on Amazon EC2: you want to use it when you are small (i.e. don't really care about performance) or when you are really big (when you can get "special" deal from Amazon and dedicate a lot of internal resources to make it work). In other cases a better option might be a mix of dedicated hardware (servers and networking stuff) and virtual servers at a managed hosting provider that would allow you to create the setup that works best for your project.