Jeff Barr, Amazon Web Services Senior Evangelist, just finished giving a talk at "The AWS Start-up Event – San Francisco" in which he showed slides listing upcoming plans at AWS, including support for Windows Server.
This is an exciting development, as Windows Server / ASP.Net make for a fantastic if potentially expensive platform. Now Microsoft has to step up to the plate and come up with a pay-as-you-go, per-cycle or per-cpu-hour licensing scheme.
One of the things that makes ASP.Net interesting is that it lives in a nice middle ground between Java, which is extremely fast (in EC2, this means less expensive per transaction) and has great "enterprise" capabilities but is cumbersome to develop with, and, say, Rails, which is quite slow and has poor enterprise app cred but is very pleasant and lightweight to develop with. ASP.Net, especially with the MVC framework and forthcoming support for Python and Ruby in addition to C# and the other .Net languages, seems to combine extreme performance, easy development, and access to as much "enterprise" as you need while offering lightweight alternatives like LINQ and SSDS.
My point isn't to make a commercial for ASP.Net, but to point out that if Microsoft can get their licensing in order, they might catch up in the cloud world through fast, cheap development cycles plus faster (and hence cheaper) runtime operation on a given machine instance than some competing platforms.
Just to be fair, cloud vendor enomalism has run Windows Server on EC2 before, by virtue of the Qemu emulation software (on top of Linux). But if we're talking about maximizing efficiency, wasting cycles on another layer of emulation (EC2 instances are of course virtual to begin with) doesn't sound like the way to go.