Even with virtualization - how many virtual instances can you possibly fit on a single blade server to give reasonable performance? I'm guessing 4 to 8?
A quick calculation shows that electricity costs for a 200W machine is 3 cents. Cooling costs same. So that's 6 cents/hour for just these two.
I think it is a lot more than 4 to 8. The probably have between 16 and 64 GB of RAM per machine, and if they are 512MB instances, they fill it up. So figure 32 to 128 instances per machine. Those machines may use more than 200 watts, and the "reasonable performance" may be not that good.
Has anyone here ever tried out the Ubuntu Enterprise Cloud ?
These numbers look right. For low-end VPSs, I've seen a rule of thumb of 4-5 VMs per core. Amazon's Compute Units are probably close to (but not quite) 1 core/hour. Since they later launched micro instances, even one core must have been overkill for many customers.