I just wanted to add -- since you're not the first to point out the Rails part -- that I've also run a 42 node Cassandra cluster on a m1.xlarges and did a fair

I just wanted to add -- since you're not the first to point out the Rails part -- that I've also run a 42 node Cassandra cluster on a m1.xlarges and did a fair bit of CPU-bound operations (encryption and compression) on hundreds of TB of data on cc2.8xlarge. I just used the Rails one as an example. In the case of Cassandra, disk I/O was a constant issue. So, we grew the cluster much larger than would be necessary on another provider. We also lost instances pretty regularly. If we were lucky, Amazon would notify us about degraded hardware, but usually the instance would stay up but do things like drop 20% of its packets. Replacing a node in Cassandra is easy enough, but you quickly learn how much their I/O levels impact network performance as well. Nowadays Cassandra has the ability to compress data to reduce network load, but you then run into EC2's fairly low CPU performance. The CPU-bound application I mentioned wasn't so bad, but we paid heftily for that ($2.40 / hour - some volume discount). At the high end the hardware tends not to be over-subscribed. Performance, price, and reliability were all issues in all cases. Those are not EC2's strong suits and haven't been for a while.