Source: Amazon EC2 Wikipedia
Amazon Elastic Compute Cloud (EC2) is a central part of Amazon.com‘s cloud computing platform, Amazon Web Services (AWS). EC2 allows users to rent virtual computers on which to run their own computer applications. EC2 allows scalable deployment of applications by providing a Web service through which a user can boot an Amazon Machine Image to create a virtual machine, which Amazon calls an “instance”, containing any software desired. A user can create, launch, and terminate server instances as needed, paying by the hour for active servers, hence the term “elastic”. EC2 provides users with control over the geographical location of instances that allows for latency optimization and high levels of redundancy.