EC2 is generally very expensive for CPU. RAM and storage are okay but CPU is crazy.I'm leaning towards becoming an EC2 apologist on here, but just running quick benchmarks on a t2.micro versus both the $5 and $10 Droplets.
sysbench --test=cpu --cpu-max-prime=40000 run
$5 Droplet ("2.0Ghz", bogomips 4000)- 99.4981s
$10 Droplet ("2.4Ghz", bogomips 4800) - 88.3740s
(I can't find any actual documentation detailing the $10 option being faster, so perhaps this is just random luck on instantiation)
t2.micro ("2.5Ghz", bogomips 5000) - 69.5248s
Now of course the t2.micro won't let you run that around the clock, which for many workloads is entirely fine: as a standard blog host and the like, or the overwhelming majority of server implementations, bursty CPU is exactly what most natural workloads look like.
Add comparisons of the CPUINFO for each-
Both droplets (identical cpuinfo flags) -
flags : fpu de pse tsc msr pae mce cx8 apic sep mtrr pge mca cmov pse36 clflush mmx fxsr sse sse2 syscall nx lm rep_good nopl pni vmx cx16 popcnt hypervisor lahf_lm
Amazon t2.micro-
flags : fpu vme de pse tsc msr pae mce cx8 apic sep mtrr pge mca cmov pat pse36 clflush mmx fxsr sse sse2 ht syscall nx rdtscp lm constant_tsc rep_good nopl xtopology eagerfpu pni pclmulqdq ssse3 cx16 pcid sse4_1 sse4_2 x2apic popcnt tsc_deadline_timer aes xsave avx f16c rdrand hypervisor lahf_lm xsaveopt fsgsbase smep erms
Of particular relevance is that the Amazon instance (E5-2670) exposes SSE4 and AVX to your VM, which for many workloads could dramatically increase its advantage.
I guess the whole point of this is that the vague CPU terminology that the various cloud vendors use is seldom really comparable. However to your core question, Amazon becomes a value proposition when you are using all of the parts -- S3, load balances, elastic IPs, shared volumes, availability zones, security zones, VPCs, private networks...it is all multipliers to the value of the platform.