I remember reading something about how AWS is pretty much running very close to at cost (super razor-thin margins, just like the Amazon shops themselves),but seeing these numbers seems to imply otherwise (20% is a big chunk of change).
It is predicted that Amazon AWS runs at a huge margin [2]
Of course it's possible that these number are skewed by some Irish Whiskey Double Dutch Vegemite Sandwich tax avoidance system.
[1] http://venturebeat.com/2013/10/24/red-is-the-new-green-for-a...
[2] http://venturebeat.com/2013/09/05/amazons-mountain-of-margin...
Compare the Amazon price with other VPSs.
It's a different service, yes, but it's not even close, not even if you reserve the instances (it's been a while since I did the math though)
But for small scale, I recommend strongly against AWS