Amazon announced reserved instances and this is expected to give momentum to on demand or auto scaling architectures. Amazon also offers a reduced pricing for the reserved EC2 instances. There are 1 year to 3 year model pricing models and after making this one time payment hourly rates are reduced to $0.03 from $0.1 in the case of standard, small on demand instances. More information on pricing is here
It looks like Amazon will have to have announce data transfer rates along with computing time to pass on the real benefit of reserved instances to the end user.
Associated Links
more information:
reserved instances money saver calculator:
http://gevaperry.typepad.com/main/2009/03/amazon-reserved-instances-do-they-make-business-sense.html
details on the TOS
http://cloudsecurity.org/2009/03/15/amazon-reserved-instances-always-read-the-label/
more information on reserved instances:
how to purchase an Amazon EC2 reserved instance
http://aws.typepad.com/aws/2009/04/how-to-purchase-an-ec2-reserved-instance.html
The reduction of pricing was expected as the initial pricing was too costly and was disappointing for the customers.