Amazon Web Services users can now take advantage of the Elastic IP Addresses to set up static IP addresses, making it easier to host websites, Web services and other online applications using Amazon EC2. Users can map the static IP addresses to any of their instances, making it easy to recover from instance failures.

Users are given a five Elastic IP Address limit, although they can ask Amazon for additional IP addresses. And to ensure that customers use the Elastic IP Addresses associated with their account, Amazon will charge customers $0.01 per hour when they fail to map each IP to an instance.

Meanwhile, the introduction of Availability Zones makes it easier and more cost-effective to run a highly available Web application. Availability Zones are designed to act as safeguards from failures in other Availability Zones by distributing an application across several zones to improve protection against power outages or network downtime.

This is certainly not Amazon's introduction into the hosting market; the company's Enterprise Solutions group has worked with a number of high profile sites for a few years. It signed a deal with British retailer Marks and Spencer in 2005, where it was to provide the technology behind the British retailer's website as well as systems for customer service and ordering. Amazon has also hosted the websites of Timex, Sears Canada and Benefit Cosmetics.

And while the complexities behind Amazon's EC2 platform may discourage some website owners from the service, it will undoubtedly appeal to existing dedicated server owners who are looking for further scalability or the higher availability of their website at a reasonable cost.

Amazon's EC2 service is priced according to various factors. A single default "small" instance that includes 1.7GB of memory and 160GB of storage is priced at $0.10 per hour, with additional charges for data transfer and unused Elastic IP Addresses. An extra large instance costs $0.80 per hour and comes with 15GB of memory, 1690GB of storage and four virtual cores.

Internet data transfer costs depend upon the flow of the data. Data that is transfered will cost users $0.10 per GB, while outwards transfers are $0.18 per GB for the first 10TB of data each month, and then $0.13 per GB if the user exceeds 50TB.

Meanwhile, EC2's bandwidth costs are significantly lower than that of many Web hosts, which could give Amazon a competitive edge on the rest of the hosting industry.

Last month, Amazon suffered a major outage that affected thousands of websites that rely on its S3 storage and EC2 cloud computing services including Web 2.0 startups like Twitter, AdaptiveBlue, SmugMug and 37Signals.