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I am planning to install Hudson on Amazon EC2 using Ubuntu image. The code I am going to test does not have a big memory overhead - I will be executing mainly python unit tests.

Which EC2 instance should I use? Would micro instance be sufficient (have enough memory) or should I use a bigger instance?

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Try running Jenkins master on a micro, however, start up a small instance for actual tests. That will give you plenty of memory and a decent CPU plus it will be cheap as well.

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