Amazon has unveiled a limited beta of its new Elastic Compute Cloud service. 

The service provides access to computing power through the internet, an offering that is commonly described as a grid. Users pay only for the resources that they actually use, saving them the investment of building a data centre.

"This frees you from many of the complexities of capacity planning, transforms what are commonly large fixed costs into much smaller variable costs, and removes the need to over-buy 'safety net' capacity to handle periodic traffic spikes," the company claimed on its website.

The grid is part of Amazon Web Services, which aims to provide online developers with the resources to build online applications.

The service also includes Amazon's S3 online storage and Amazon Mechanical Turk, in which individuals perform simple tasks that cannot easily be automated. 

Elastic Compute Cloud costs $0.10 per hour and $0.20 per gigabyte of internet traffic. Clients pay $0.15 per gigabyte per month for storage through the S3 service.

Clients will be given access to a 1.7GHz Xeon powered server with 1.75Gb RAM, a 160GB hard disk and up to 250Mbps of bandwidth.

Users can create a standard image with all their applications, libraries and data and apply those settings to a new machine within minutes.

Amazon's latest offering resembles Sun Microsystems' retail Grid, which rents out computing power at a rate of $1 per CPU hour. 

Amazon positions its service as a way to instantly commission new servers, while Sun is focusing on data crunching applications such as video rendering and voice processing.

At the official launch last March, Sun touted an application that transforms the morning newspaper into a podcast that commuters can listen to on a portable music player.