The 80% number was for a "dedicated instance". A dedicated instance is not the same as a reserved instance. Dedicated instances, charged on top of the regular

The 80% number was for a "dedicated instance". A dedicated instance is not the same as a reserved instance. Dedicated instances, charged on top of the regular price, are where you are guaranteed not to have anyone else on the same host server as you. Dedicated instances already cost 10% more than their regular counterparts (small/dedicated/on-demand costs 6.6/c hr vs 6c/hr.) At any point, the most you could be "wasting", was the leftover capacity on a host that only had one small server on it (they didn't do micro). Imagine a simplified version of EC2 as per [1], which fits 12 small instances on one physical host, and you could therefore be wasting 11 slots that you could run a m1.small in. They can't sell these to any other customer. If you buy a second instance, they put that on your first host; you are now wasting 10 slots. Carry on down to when you fill up your first host and spill over onto a second, back to wasting 11 slots. Previously they were charging $10/hour for those wasted 11 slots, which you could have filled by paying 72.6c/hr. Now, they're only charging $2. [1] http://perfcap.blogspot.co.uk/2011/03/understanding-and-using-amazon-ebs.html http://perfcap.blogspot.co.uk/2011/03/understanding-and-usin...