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That’s my concern. I would 100% sign up at this price, but I’m doing the math in my head: They offer 4GB VMs; Assuming they’re oversold and using a good backbl
by GauntletWizard 6y ago
That’s my concern. I would 100% sign up at this price, but I’m doing the math in my head:
They offer 4GB VMs; Assuming they’re oversold and using a good backblaze-pod like design, they can fit ~32 drives per U. 32 * $5/mo is $160; Assuming they’re paying $50/U and the customer’s guaranteed bandwidth is included in their colo cost, that gives them $110 gross margin. Cost of drives is retail - If they have a better supplier that’s a few $ more, but not a lot. The hardware to run that is another real cost. I doubt it costs less than $2000/U to outfit the hardware; It doesn’t have to be beefy but SATA slots add up.
That gives a payoff time of ~18 months. Doable, but not amazing. At a scale of a few dozen racks, this could be a lifestyle business, but it’s sorta marginally so. Assuming a hardware lifetime of 3 years, you start breaking even halfway in. Lifetime margin is about the cost of the hardware - $2000/u. If this is a single man show, about 2 racks (= ~3000 customers) gives a reasonable “salary”, but the upfront costs are high.