TLDR version for a busy startup founder: participate in startup beauty contests, get affiliated with startup incubators and accelerators.
If you are a founder of a technology startup and you are trying to save money on everything, free hosting can be part of your funding strategy. In the last two years every noteworthy startup contest I went to was sponsored by Microsoft, Rackspace, Amazon or some other cloud hosting provider and a free year of hosting was always one of the prizes. When we started working on Citybot the founders were practically bankrolling our hosting, which was just few hundred dollars per month on AWS. AWS provided us with all the hosting resources we needed for development and experimentation, but the cost was slowly climbing up and getting hard to bankroll. Back then it did not even occur to us that we could be getting all that hosting for free.
Our first free hosting came rather unexpected from Rackspace. As soon as we had a barely working prototype of our app we signed up for a demo table at Pitch SF. It was a wild day of pitching and demoing till we dropped and lost our voices. The event was also great for user testing, for in one day we got to see dozens of people using our app right in front of us (painful but enlightening experience for engineers). Sometime during the event a raffle took place where one of the prizes was 1 year of free hosting from Rackspace for up to $2K/month! We didn’t pay much attention to the raffle, as we were busy pitching and user testing. Few days after the event I got an email from Rackspace saying that we wont the raffle! Wow! $2K/month of hosting! We weren’t even spending that much yet on AWS… I felt like a kid in a candy store. We signed up right away, thanks Rackspace!
A month after PitchSF, we got accepted to the Founder Institute incubator (read more about our experience at FI here). A year later, as our Rackspace all-you-can-eat hosting was running out, Microsoft started giving away free hosting packages on Windows Azure as incentives for startup incubators. Founder Institute was among the first incubators to get the partnership and, as a recent graduate, Citybot was awarded a free year of hosting on Azure for up to $5K/month. We waited for our Rackspace deal to run out, wrote some tools to help us migrate the infrastructure and moved to Azure.
Months went by and we kept participating in events like Founder Showcase, Amazon Global Startup Challenge, Silicon Valley Open Doors, VentureBeat Startup Contest at SXSW, etc. Some times we would get nothing, some times we would get a bunch of useless services, and at SXSW 2013 we got another year of free hosting from Nephoscale for up to $2K/month! At that time we had much better understanding of our hosting needs and better control of the cost, so $2K/month was enough. Better still, Nephoscale provides both bare metal and cloud servers, so for couple hundred extra $$ we were able to get high performance servers on the same network as free cloud servers.
Few months later, EvoNexus (THE startup accelerator in San Diego) got a patnership with Microsoft and we received another year of free Windows Azure. In fact, what we got was not just Windows Azure, but the whole BizSpark Plus package with a bunch of free software licenses.
So, overall we got 3 years of free hosting and we still have some months left. We did have to pay for some services, such as augmenting slow Azure instances with faster machines from Liquid Web until we migrated to Nephoscale. We also never fully migrated off of Amazon S3 and SQS, but our AWS bill fell bellow $20/month. You can read more technical details and comparisons of different cloud hosting providers in my other post Racing the Clouds.