Amazon Web Services is offering its customers the chance to rent out “physical servers fully dedicated for your use” via a new service called EC2 Dedicated Hosts.

The new service gives companies the option of running licensed software on multiple AWS virtual machines cooked up in a single server. It’s a big difference from the traditional way AWS offers up VMs, which users can access but will never know exactly where they hosted.

According to AWS chief evangelist Jeff Barr, the big advantage of a dedicated server is it gives admins more power through the ability to “exercise fine-grained control over the placement of EC2 instances”.

Dedicated Hosts might well appeal to the numerous kinds of enterprises that wish to move their IT infrastructure to the cloud but are unable to do so because of software license restrictions. Programs like Oracle Database, SUSE Linux Enterprise Server, Windows Server and Windows SQL Server are somewhat notorious for being tied to a server with a specific number of physical cores or sockets, which means the software licenses cannot be transferred.

With its Dedicated Hosts, AWS believes that some customers will be able to bring their software license because it offers “visibility into the number of sockets and physical cores that are available so that you can obtain and use software licenses that are a good match for the actual hardware”. Another target customer for AWS could be those compliance-conscious companies that believe they need to be able to pinpoint the exact location of their servers to satisfy the relevant authorities.

Certainly, the new service makes AWS look even more appealing when compared to the rivals it already outpaces, especially Microsoft Azure. The move will also come as a blow to IBM, which has often touted similar capabilities with its SoftLayer cloud as a differentiating factor.

For starters, AWS’ dedicated servers are only available to rent by the hour, but the company is promising to offer “reservations” for the service with discounts of up to 70 percent of the on-demand price.

Looking at the prices, companies may well find a reservation is worthwhile. For example, running a bog-standard M4 instance with a 2.4 GHz Intel Xeon E5-2676 v3, a pair of vCPUs and 8GB of RAM on a Dedicated Host will set you back $3.049 per hour on-demand ($26,079 a year).

Customers will be able to choose the region in which they want their dedicated host to reside. Currently, they can choose from US East in Northern Virginia, US West in Oregon, US West in Northern California, Europe in Ireland, Europe in Frankfurt, Asia Pacific in Tokyo, Asia Pacific in Singapore, Asia Pacific in Sydney and South America in Brazil.

The Dedicated Host service is available for more than 30 different instance types in the M4, C3, C4, G2, R3, D2, and I2 range, and can run Amazon Linux, Red Hat Enterprise Linux, SUSE, Ubuntu and Windows Server.

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