I agree with the author, EC2 seems really expensive compared to other clouds. One of the comments suggested DigitalOcean, which has much better pricing, and you can do flexible by the hour pricing and it has a rest API to bring up/down servers.
I've had a rather spotty experience with DigitalOcean unfortunately. Some times you can't create instances, it just hangs there waiting forever. You can't replicate snapshots between regions. I click the button but nothing happens... I've also had an order of magnitude worse network bandwidth sending backups to S3, both in Amsterdam and NY.
It's ok for a dev box or playing around, and it's definitely cheap, but I wouldn't trust any production servers on it. _Yet_. I do see they improve at a very impressive pace, with new features becoming available regularly, so things hopefully change for the better... It's still nowhere near being a match to AWS, or even Linode.
Whenever someone says $CLOUD costs less than EC2 it's always a very limited cloud with a small number of customers with a tiny fraction of a fraction of the features of AWS. It's never an Azure or a Rackspace.
/shameless shill + happy DO customer
https://www.digitalocean.com/pricing
https://api.digitalocean.com/