Amazon EC2 just rolled out a new sudo pre-payment plans for all its instance sizes. With this new plan you pay a flat up front fee for a one or three year term. In exchange for this pre-payment you receive discounted per-hour price. A lot of people are using EC2 as a permanent web host and dont need to scale up like other services with possibly hundreds of instances being created or terminated at any given time. So what Amazon did here was give their consistent users a break with this new pricing structure.

This is a table with the pre-payment fees and what discount you get with them.

Actual costs. Pre-payment 1/3 year vs none.

Instance	Pre-Payment	Per-Hour Cost	Per-Month Cost	1yr Cost	3yr Cost	3yr Per-Month Cost
Small	None	0.1	$73	$876	$2,628	$73
Small	1yr $325	0.03	$21.90	$587.80	$1,763.40	$48.98
Small	3yr $500	0.03	$21.90	$429.46	$1,288.40	$35.78

Currently the reserved instance pricing is only available for Linux/Unix instances.

[Via Techcrunch]