I’ve just moved my site off of Rackspace to AWS EC2 after having been able to experiment with EC2 at work for the past several months. The biggest difference I note is with SSD drives serving the database and files – this offers a lightning-speed improvement! A micro-tier server (1 CPU, 1 GB RAM) should run around $20 or less per month, metered at an hourly rate for 750 hours per month.
These are the articles I had to reference when migrating my site from Rackspace Linux hosting to AWS EC2. There are a few “gotchas” and caveats with EC2 that make it best suited for technical folks (programmers, server admins, etc.). You need to be good with the command line – what you get is “dedicated” hosting, relative to shared tenancy hosting like BlueHost and GoDaddy, that is so much faster, for almost the same price!
AWS EC2 Ubuntu setup for WordPress (in reverse order, start at the bottom)
Amazon EC2 WordPress Not Cropping or Resizing Images Fix
sudo apt-get install php5-gd
Increase file upload size
THE BEST THING ever!
Locating user name running Apache (www-data)
Create new user in MySQL and give it full access to one database
How To Install WordPress On Amazon EC2 Ubuntu Instance