Drupal on a dedicated servers vs. Amazon AWS/EC2

With the "Cloud" being in vogue currently, we see a lot of clients asking for cloud solutions, mostly Amazon AWS. Sadly, this is normally done without really doing a proper evaluation into whether the cost is reasonable, or the technology is suitable for their specific needs.

Amazon AWS provides some unique and compelling features. Among those are: instant provisioning of virtual servers, billing for used resources only, ability to provision more instances on demand, a wide variety of instance types, and much more.

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Is it suffering from server resources shortages?
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