4 ms·

I think you might be underestimating how cheap bandwidth and hardware has become at scale. If anything, because of the nature of how VPS work, you can make good

by pavs 13y ago

I think you might be underestimating how cheap bandwidth and hardware has become at scale. If anything, because of the nature of how VPS work, you can make good money as server hardware gets faster and cheaper.

jjoe 13y ago
There's the people aspect in all of this. What's reasonable pay for a good sysadmin/programmer hybrid? 70k - 100k/yr? How many do you need to keep things running smoothly and build new tools? How many do you need full time for remote hands and provisioning? Hardware prices don't drop so much at this scale unless you're buying in extremely large quantities. Even then and they don't drop as much as bandwidth (except for out of lease equipment and I doubt DO does this).
- pavs 13y ago
  With newer, more powerful servers they can cram more VPS in to single server. Usually users rarely have continuous CPU usage on small CPUs like that, so in theory you can cram more VPS in a server, without causing any performance issue to other VPS. VPS in general is insanely profitable, if you know what you are doing. The employee aspect will always be there, DO can still make money by not taking outrageous profit margin like AWS and Rackspace.
  - jjoe 13y ago
    I run a similar business (fully managed though). I know for certain that hardware and bandwidth costs are the tip of the proverbial iceberg. Remember there's also colocation, power, contracts, networking equipment (2x10G), and DDoS costs. You don't really charge a client for the bandwidth costs incurred during a DDoS if you choose to absorb the attack. You don't charge a client when a RAID controller fails and you need to restore xTBs of data (xx man hours). Oh and you need to purchase backup nodes, which you're not getting any immediate return on. You need an office. You need to factor in travel costs. Overtime pay. Health insurance, payroll costs, etc. Ads...

by pavs 13y ago

jjoe 13y ago

There's the people aspect in all of this. What's reasonable pay for a good sysadmin/programmer hybrid? 70k - 100k/yr? How many do you need to keep things running smoothly and build new tools? How many do you need full time for remote hands and provisioning? Hardware prices don't drop so much at this scale unless you're buying in extremely large quantities. Even then and they don't drop as much as bandwidth (except for out of lease equipment and I doubt DO does this).

pavs 13y ago
With newer, more powerful servers they can cram more VPS in to single server. Usually users rarely have continuous CPU usage on small CPUs like that, so in theory you can cram more VPS in a server, without causing any performance issue to other VPS. VPS in general is insanely profitable, if you know what you are doing. The employee aspect will always be there, DO can still make money by not taking outrageous profit margin like AWS and Rackspace.
- jjoe 13y ago
  I run a similar business (fully managed though). I know for certain that hardware and bandwidth costs are the tip of the proverbial iceberg. Remember there's also colocation, power, contracts, networking equipment (2x10G), and DDoS costs. You don't really charge a client for the bandwidth costs incurred during a DDoS if you choose to absorb the attack. You don't charge a client when a RAID controller fails and you need to restore xTBs of data (xx man hours). Oh and you need to purchase backup nodes, which you're not getting any immediate return on. You need an office. You need to factor in travel costs. Overtime pay. Health insurance, payroll costs, etc. Ads...