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Amazon servers, starting at 10 cents an hour

The Elastic Compute Cloud service, from Amazon's Web services division, pipes processing power over the Internet. announced on Thursday a service to provide computing power on demand over the Internet.

This hosted service, called Amazon Elastic Compute Cloud (EC2), is in limited beta testing and is aimed at software developers writing Web applications.

The service is offered to developers, who can tap into the server-processing service to quickly meet their application's changing needs. Rates start at 10 cents per "instance-hour" consumed--a dime for the use of a guaranteed minimum amount of computer capacity running particular server software.

This utility computing service works with Amazon Simple Storage Service (S3), which Amazon introduced earlier this year.

"Amazon EC2 reduces the time required to obtain and boot new server instances to minutes, allowing you to quickly scale capacity, both up and down, as your computing requirements change. Amazon EC2 changes the economics of computing by allowing you to pay only for capacity that you actually use," Amazon Web Services said Thursday on its Web site.

The Amazon Web Services division of the retail and technology company is a big proponent of the idea of building Web applications on top of hosted services. It has rolled out a number of services--available via XML-based application programming interfaces (APIs)--that essentially constitute a development environment for Web developers.

In addition to its storage and server lineup, Amazon Web Services has introduced services for messaging, search and e-commerce.

With Amazon EC2, developers set up or choose an Amazon Machine Image, which contains the software needed to boot up an instance of a server. Writing to the published APIs, developers can automate the process of adding and subtracting more server capacity as traffic to their Web applications changes.

Each instance provides the equivalent processing power of a 1.7-gigahertz Xeon server with 1.75 gigabytes of memory, 160 gigabytes of disk storage and 250 megabits per second of network bandwidth.

In addition to the 10 cents per instance hour per server, users pay for bandwidth traffic and storage at hourly rates.

Sun Microsystems earlier this year launched its Sun Grid, a service that lets people purchase computing power at $1 per processor per hour.

Other large outsourcing companies, including IBM and , have sought to offer usage pricing for hosted processing power.