Amazon EC2 is a server-on-demand service which allows you to scale up your operation seamlessly and in a cost-efficient manner.
By creating an EC2 server instance you have root access to a full machine which you can manipulate as you would a normal machine. You can use custom or pre-made Amazon Machine Images (AMI) to create a server which meets your needs and containing your own applications.
It works in conjunction with Amazon's S3 service, which is a storage system controlled over webservices. Amazon have produced a way of scaling any application on-demand. They specifically mention databases and webservers....