I wish to install a website PHP and a Tomcat application on a single Amazon EC2 instance primarily to save the cost. Is it advisable to do so?
What can be the drawbacks of doing so?
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Depends on the instance type, load you expect and webserver. Generally there are no obvious drawbacks. Try to run one webserver only (this might even save you some resources). On shared hosting this is done all the time, and usually, tomcat/php only use resources when there is stuff to process, so you can think of it as “resources tomcat usually uses plus resources php usually uses”.
Just go ahead and try it.