Seconded, I have been eying off their cloud service as a way to manage our server costs as we have some pretty wild but predictable swings in load throughout the day/week. We currently have dedicated hosting with Softlayer so a cloud in the same data centre as our existing databases etc would be great.
This however has made me pause, we are a small team and I like my sleep. A response would be awesome.
I've had great luck with Softlayer dedicated hosting in the past -- just as good as rackspace dedicated, and about half the cost. The only limitation was not being able to do custom VLANs between servers in multiple cabinets (which I needed for a multicast logging solution). I've never tried their cloud product, though (they should offer discounts to the hackernews affiliated organization...)
Disks seem to be the real weakness of all cloud solutions so far. Local storage is the only cost effective way to have high performance disk, and that makes provisioning cloud instances much harder. There might actually be some stuff to do in this space using dual-ported SAS or SATA with dual port SAS drives, purely for failover.
Yes, their dedicated servers hosting is just awesome - the best I've seen! But their cloud stuff is terrible and this is what made me really frustrated and guess about it being a 3rd party service poorly integrated - their cloud offering sucked, they could not offer any reasonable support for it, etc.
We were in a similar situation. We were extremely happy with their dedicated server, virtually never had to use their support and never had to worry about the server going down.
But their cloud offering is a whole different story. I lost track of the number of time, we just could not connect to the server. This was not a disk problem but a network problem. Twice we raised support tickets and once it took around 6 hours to resolve and the other time it took 3 hours to resolve. In all that time all we only got generic replies that asked us to wait for updates. These two major incidents were in addition to at least three times where the server was not accessible for like 30-40 minutes each time, where we did not raise a support ticket. All this in a span of less than a month.
We moved to the cloud for the same reason, in terms of cost and usage. But the pain of not being able to access a server when you need it is just not worth it. We are testing out Rackspace. Hopefully that will be a better experience.
My data on SL Cloud is about 6 months old now - but it's seriously far behind their dedicated offerring. A poor control panel lacking vital functions, frequent downtime, and slow io mire it.
This however has made me pause, we are a small team and I like my sleep. A response would be awesome.
ps. pretty happy with Softlayer over all btw.