medium utilized reserved "m1.large" instance, which has 7.5Gb of RAM + 2*420Gb of local storage costs $1272 a year max (less if you don't use it all the time). If you go with heavy-utilization instance it's even cheaper. see https://aws.amazon.com/ec2/pricing/#tabm1
Rackspace's 8GB/320GB instance costs $4200 a year.
The Rackspace instance you are referencing has 4 vCPUs in it - the m1.large on Amazon has 2. Also, don't forget the prepay amounts on EC2 reserved instances in your calculations! The prepay for 1 year on the m1.large is $243, making a reserved m1.large $1434 a year (365 days * 24 hours * $0.136/hour + $243).
Also, don't forget that the heavy reservation is billed for every hour in the term, not when you have it turned on.
> With this RI [Heavy], you pay a little higher upfront payment than Medium Utilization RIs, a significantly lower hourly usage fee, and you’re charged that lower hourly rate for _every hour in the Reserved Instance term you purchase_.
medium utilized reserved "m1.large" instance, which has 7.5Gb of RAM + 2*420Gb of local storage costs $1272 a year max (less if you don't use it all the time). If you go with heavy-utilization instance it's even cheaper. see https://aws.amazon.com/ec2/pricing/#tabm1
Rackspace's 8GB/320GB instance costs $4200 a year.
That's quite a difference