Many reasons why, but we had an example of one yesterday. An employee who was allowed to use their MacBook was leaving a client company, and we were asked to log on and remove all their data from the machine (they are particularly sensitive to data loss). In this case the employee was leaving through voluntary redundancy, and was completely compliant.
However if the employee had left under a cloud there would have been a bit of a sticky situation. The client company may well have owned the data on the Laptop, but would have no rights to seize it or remove it. I’ve no idea what the legal consequences would have been, but the simple solution is to supply all your employees IT. That way if someone leaves you simply remove it from them.
This service allows you to rapidly provision hosted servers. Mostly this is aimed at the big boys. The idea is that if you know that your web site for example is going to have a huge spike in activity, the EC2 cloud has tools that allow you to provision and boot extra servers on demand to cope with the rush. Once the rush is over you decommission them, and you only pay for them whilst they are running, for a minimum of 1 hour.
The sort of development that would go into scripting web services to do that kind of thing automatically is not small.
So what is the benefit to smaller companies? Best thing I can see is for playing. If you need to test a new service or piece of software then you can rapidly provision a new server out on the Internet, do your testing and then kill it off. As prices start at $0.135 for European hosting for short term rents it is probably cheaper than buying an in house server for testing (keep in mind electricity, air con, space, licensing etc).
I need to demo hosted Sharepoint for a client soon, and I’ll definitely consider spinning up an EC2 server to install and run it on for the duration.