I'd been curious about the Amazon's Elastic Compute Cloud or "EC2" before, but I'm twice as curious now: Red Hat and Amazon have knocked heads to provide Red Hat Enterprise Linux as one of the standard offerings for EC2.

For those who haven't followed what Amazon is doing, the Elastic Compute Cloud is a kind of on-demand virtualization system.  Instead of running a virtual machine on your desktop or a given server somewhere, it's run on Amazon's "cloud" -- a big cluster of computers, not any one machine.  You create a machine image, or use one of Amazon's preconfigured images, upload it to Amazon's Simple Storage Service (aka S3), and access it over the network like you would any remotely-hosted machine.  The whole system's designed to be as flexible as possible -- there are no minimums for usage, so you pay for exactly what you use.  Amazon's own tools for setting up an EC2 image are written in Java and so can run pretty much anywhere there's a command line and a Java port.

Red Hat's contribution to all this is in the form of a pre-configured Red Hat Enterprise Linux system image, which you can use in the cloud for a starting cost of $19 a month (plus whatever usage you incur with the system itself).  The way I see it, that amounts to a support subscription for the software alone for around $230 a year.  Considering that a RHEL 1-year subscription for a two-socket system is $349, that's a pretty sweet deal, and leaves plenty of room to pay for whatever grade of computing you need from the cloud.  (There's three basic tiers of computing service, each designed to emulate a different level of machine performance; you can start small and work your way up as you need.)

Obviously, nothing's stopping anyone from not using RHEL as their platform of choice here.  In theory you could run Fedora (or some other Linux distribution) and pay nothing for the software at all.  There's even a tutorial that describes how to run a Windows Server 2003 server (using an emulator, admittedly) in the cloud.

But many people are clearly happy to pay Red Hat for their services and support, and EC2 makes for a novel way to pay for both RHEL support and the hardware to run it on.