Where's he colocating those servers? Last time I dabbled with colocation, the bandwidth costs per-server were by far the dominant cost. I found it difficult to get anything at all for small quantities of servers.

Looking at he.net at the moment, I see they have a deal for $1/Mbps. Presumably someone like Jeff Atwood can get twice as good a deal as that, so he'd pay around $500/month for bandwidth for those servers. Going by the cheat sheet (https://blog.cloudvertical.com/2012/10/aws-cost-cheat-sheet-...), that is within a factor of 2 of a yearly-reserved h1.4xlarge ($2263/month * 0.47 savings = $1199). It's almost equal to the three-year reserved machine ($2263 * 0.30 = $678).

Edit: He probably only needs 1 Gbps for all 4 machines, driving his bandwidth costs down by a factor of 4, but we could start to take power/space/cooling costs into account at that point.

So is he getting a better deal than that? I'd love to know where.