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So your theory is not that they have a better deal in the backend, but that they are using less CPU cycles? Or perhaps that the development and maintenance cost

So your theory is not that they have a better deal in the backend, but that they are using less CPU cycles? Or perhaps that the development and maintenance costs are lower?

michael_dorfman 16y ago
You seem to be under the illusion that pricing has a direct relationship to cost. That's backwards. Pricing is based on the perceived value to the customer, not the cost to the producer. Dropbox and GitHub are offering very different services, and are therefore pricing their services differently, based on what they believe the market will bear. If you're trying to price a new service, I recommend you think about the value you are offering your customers, and how they perceive it. That will tell you what you are able to charge.
- brazzy 16y ago
  However, if the price is much higher than the cost, it means that you're very vulnerable to competition undercutting you, unless there are entry barriers.