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How about for those that just want a small instance system. I just do the smallest linode setup for some personal projects. From my understanding, AWS is expensive for that type of use case?

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I second that question, and expand it a little. AWS is likely a more secure and trustworthy option given the recent controversy, but it really is comparing apples to oranges; they're both hosting solutions (fruit), but fundamentally very different.

Is there any service close to Linode that provides a similar service for a similar price? I know of DigitalOcean, but their CPUs are very underpowered in each plan compared to Linode's (especially after recent upgrades).

AWS Free Tier is...free.

I'd probably go with http://prgmr.com/xen/ for low end above that.

How do people expect prgmr.com compares with linode in terms of security?

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