4 ms·

The Hosting Provider Time Machine: Paying 2006 prices in 2009

29 points by RobbieStats 17y ago

dlsspy 17y ago
Linode allows you to upgrade disk or RAM independently. Sounds like it's closer to what he wanted.
RobbieStats 17y ago
I looked at Linode and their offering is pretty competitive with Slicehost (slightly higher price but more storage). Any positive/negative experience with them?
- decklin 17y ago
  I'm quite happy with them. Since I signed up in 2008, they've increased the base storage once: http://blog.linode.com/2009/04/23/33-additional-disk-space/ http://blog.linode.com/2009/04/23/33-additional-disk-space/
- petercooper 17y ago
  I've had a few VPS off them for small projects over the last year and it's all worked great.
- slig 17y ago
  Very positive experience here. Also, they offer 32bits slices, while slicehost only offer 64bits.
- uggedal 17y ago
  I went from Slicehost to Linode a few months ago. Linode has faster boxes. I did a one week performance comparison between Slicehost, Linode, and Prgmr (which I should publish...). Linode won by a large margin.
- idan 17y ago
  +1 linode. Been using them for about 4.5 years. Solid service, knowledgeable staff, consistent improvements. "Just works(tm)".
- idan 17y ago
  Oh, in that time, they've upped my ram and my storage space multiple times, FWIW.
- tasaro 17y ago
  You actually get more resources for the same cost. Also, there is this: http://blog.linode.com/category/upgrades/ http://blog.linode.com/category/upgrades/
lsb 17y ago
1) They're only charging that because people are paying it. 2) What do you need on your Slicehost VPS that you couldn't just dump onto your home storage device?
- RobbieStats 17y ago
  1) I understand, but unless people raise this issue publicly maybe they won't ever change ;-) 2) I can dump it on my home drive just like i could dump it on S3, but I do a lot of parsing on the files and copying them back and forth when needed is a headache I'd rather avoid. And then there is my front-end server that caches large portions of the website dynamically which I can't move to my home drive
tptacek 17y ago
The idea that you should price things based on what they cost you to acquire is the reason engineers are rarely trusted with pricing in established companies. Slicehost can charge whatever it wants for storage, because you can't get storage with a Slicehost wrapper around it anywhere else. This is just an optimization problem. Something to like about this situation: most startups price too low out of the gate, and should be raising prices regularly. Here Slicehost gets a (small) shadow price increase over time, as its costs for storage and compute decrease.
- RobbieStats 17y ago
  You make it sound like this is a highly differentiated market. We are talking about hosting hardware. Sure Slicehost (and others) throw some software in to the mix, but the main thing everyone buys is access to hardware (and not specialized hardware at that). So yeah, price does matter. I think it makes them vulnerable to new entrants into the market that can base their prices on today's hardware. Also, I don't think this is a "small" shadow price increase. Hardware gets cheaper by 50% year-over-year. Even if you cut that in half, a 25% yearly decrease in hardware costs is pretty good for them.
  - tptacek 17y ago
    Yup. That sounds good. I'm still not moving to Linode. Slicehost fucking kicks ass. Everything it claims to do just works, with zero messing around. I have zero time to dick around with Linux kernel builds and drivers and ISOs and who-the-hell-knows. They could charge significantly more and it'd still be worth it to me. Other people value their time and effort differently. Slicehost might not get them. I think they've factored that in. =)
    - RobbieStats 17y ago
      Unfortunately I have to agree with you ;-) My experience has been so good with them that my default option is to shell out more money and keep using them.
calambrac 17y ago
Their customers pay it, their competitors don't undercut it, and they get an increasing profit margin out of it. Sounds like they've found the magic number to me... I'm also curious how you know that their numbers would actually let them drop the price yet. You really think they pay for all their hardware and software with a few month's worth of fees? That after paying personnel/electricity/marketing/rent each month they're going to wipe out the long-term investment numbers each month? I'm willing to bet they have some kind of spreadsheet somewhere and understand where they stand on their pricing requirements much better than you do.
- Andys 17y ago
  I run a small VPS hosting company. You are right; the hardware cost is only a small part of the total outgoings for this type of business. In that regard, the pricing model tends towards how big a slice of the 'pie' each customer gets to buy. The 'pie' is the total amount of hardware available for customer use. So if you want to buy more disk space only, that would reduce the size of the pie for everyone else who wants disk space, so you'd need to reduce the allowed disk space on all plans to leave some 'spare' in case someone wants to expand their disk. Slicehost instead have maximized the amount of disk space per customer and that hasn't left any spare, so you are (in theory) already getting a good deal. Perhaps there's room for a small startup company to arbitrate buying and selling of extra disk space amongst Slicehost customers :-)
  - kragen 17y ago
    So if you want to buy more disk space only, that would reduce the size of the pie for everyone else who wants disk space, so you'd need to reduce the allowed disk space on all plans to leave some 'spare' in case someone wants to expand their disk. Or maybe Slicehost could use some of the money to buy some more disk space and hook it up.
    - Andys 17y ago
      You missed my point: If they give you some more disk space then they have to decrease everyone else's space. What you're suggesting means buying a new "pie", because they've sliced up the existing pie and allocated all of it, completely. This would mean buying more datacenter space, more servers, more networking equipment. When you want to offer disk space to customers as a product, it has to scale, you can't just plug in a USB HDD every time someone emails to ask for more space.
acangiano 17y ago
I think he has a very valid point, and Slicehost should take notice. However, I also think that he has outgrown the VPS space. I would contact SoftLayer if were him.
- petercooper 17y ago
  A big "seconded" for SoftLayer here. I've trusted a lot of stuff to them in the last few years and never had a problem.
patio11 17y ago
I'm also on Slicehost, and have been for a few years now. My spending on hosting goes up every year, my spending on hosting as a percentage of sales keeps going down. This is principally because I spend most of my time figuring out more ways to charge more customers more money (they certainly don't pay 2006 prices any more) and less of my time worrying about servers or trying to shave money off my hosting bill. Now, if you want to treat hard drive space as a commodity, there are many service providers out there who are happy to meet your needs. You'll have to put up with some of the pain associated with dealing with a commodity service. Slicehost (sensibly) has no particular desire to commoditize their offering or price like they have done so.
mdasen 17y ago
There are providers offering better pricing. ChunkHost has 2GB instances for $66/mo. You can get a 512MB instance to try for free during their beta. Prgmr (which is very, very basic and much harder to use) offers 2GB instances for $36. However, their service isn't so automated. The issue is that Slicehost now operates on a premium level - they're a big name. And you're paying for that name. Linode offers slightly more competitive pricing, but again name. People are willing to pay up a little in order to get something they think will have better uptime. But this is one of the reasons that I left Slicehost. When they started, you could get a 512MB dedicated server for around $70-100 with no RAID and crappy reliability. The cost thing is starting to swing back toward dedicated hardware as for $160 a place like Softlayer will give you a 4GB dedicated box or an 8GB server for $210 (both coming with 2,000GB of bandwidth). It's still hard to match on the low-end because when you're dealing with dedicated hardware you have electricity and rackspace which, well, a server has to take up physical space. But Slicehost and other VPS providers haven't cut prices and adjusted as things changed which has made dedicated boxes a lot more attractive. If you have 7 2GB slices, you might want to look at a dedicated box. Buy a box with 16GB of RAM, 4 processing cores, and get your VMs running on it all for around $460. That compares favorably to the $910 Slicehost would charge. Gets even better at 32GB for $660 vs. $1820. Just remember that VPSs aren't the be all and end all. They're a tool. If the pricing of other options is working out better for you, look into that.
smakz 17y ago
Have you looked into EC2 at all? While they have precanned "instance types" as well, they also offer a separate Elastic Block Storage service where you can ask for as much storage as you want, and it acts like a virtual hard disk on your partition. http://aws.amazon.com/ebs/ http://aws.amazon.com/ebs/
reedlaw 17y ago
[F]or hosting providers that do not a) increase their hardware configurations or b) decrease their price on at least a bi-yearly basis, their profit margins are actually increasing over time. Not necessarily. What about inflation? It's remarkable that technology continues to become cheaper while our currency is decreasing in value. It just makes me wonder what we'd be paying if we used hard money instead.

29 points by RobbieStats 17y ago

Linode allows you to upgrade disk or RAM independently. Sounds like it's closer to what he wanted.

I looked at Linode and their offering is pretty competitive with Slicehost (slightly higher price but more storage). Any positive/negative experience with them?

decklin 17y ago
I'm quite happy with them. Since I signed up in 2008, they've increased the base storage once: http://blog.linode.com/2009/04/23/33-additional-disk-space/ http://blog.linode.com/2009/04/23/33-additional-disk-space/
petercooper 17y ago
I've had a few VPS off them for small projects over the last year and it's all worked great.
slig 17y ago
Very positive experience here. Also, they offer 32bits slices, while slicehost only offer 64bits.
uggedal 17y ago
I went from Slicehost to Linode a few months ago. Linode has faster boxes. I did a one week performance comparison between Slicehost, Linode, and Prgmr (which I should publish...). Linode won by a large margin.
idan 17y ago
+1 linode. Been using them for about 4.5 years. Solid service, knowledgeable staff, consistent improvements. "Just works(tm)".
idan 17y ago
Oh, in that time, they've upped my ram and my storage space multiple times, FWIW.
tasaro 17y ago
You actually get more resources for the same cost. Also, there is this: http://blog.linode.com/category/upgrades/ http://blog.linode.com/category/upgrades/

lsb 17y ago

1) They're only charging that because people are paying it. 2) What do you need on your Slicehost VPS that you couldn't just dump onto your home storage device?

RobbieStats 17y ago
1) I understand, but unless people raise this issue publicly maybe they won't ever change ;-) 2) I can dump it on my home drive just like i could dump it on S3, but I do a lot of parsing on the files and copying them back and forth when needed is a headache I'd rather avoid. And then there is my front-end server that caches large portions of the website dynamically which I can't move to my home drive

tptacek 17y ago

The idea that you should price things based on what they cost you to acquire is the reason engineers are rarely trusted with pricing in established companies. Slicehost can charge whatever it wants for storage, because you can't get storage with a Slicehost wrapper around it anywhere else. This is just an optimization problem. Something to like about this situation: most startups price too low out of the gate, and should be raising prices regularly. Here Slicehost gets a (small) shadow price increase over time, as its costs for storage and compute decrease.

RobbieStats 17y ago
You make it sound like this is a highly differentiated market. We are talking about hosting hardware. Sure Slicehost (and others) throw some software in to the mix, but the main thing everyone buys is access to hardware (and not specialized hardware at that). So yeah, price does matter. I think it makes them vulnerable to new entrants into the market that can base their prices on today's hardware. Also, I don't think this is a "small" shadow price increase. Hardware gets cheaper by 50% year-over-year. Even if you cut that in half, a 25% yearly decrease in hardware costs is pretty good for them.
- tptacek 17y ago
  Yup. That sounds good. I'm still not moving to Linode. Slicehost fucking kicks ass. Everything it claims to do just works, with zero messing around. I have zero time to dick around with Linux kernel builds and drivers and ISOs and who-the-hell-knows. They could charge significantly more and it'd still be worth it to me. Other people value their time and effort differently. Slicehost might not get them. I think they've factored that in. =)
  - RobbieStats 17y ago
    Unfortunately I have to agree with you ;-) My experience has been so good with them that my default option is to shell out more money and keep using them.

calambrac 17y ago

Their customers pay it, their competitors don't undercut it, and they get an increasing profit margin out of it. Sounds like they've found the magic number to me... I'm also curious how you know that their numbers would actually let them drop the price yet. You really think they pay for all their hardware and software with a few month's worth of fees? That after paying personnel/electricity/marketing/rent each month they're going to wipe out the long-term investment numbers each month? I'm willing to bet they have some kind of spreadsheet somewhere and understand where they stand on their pricing requirements much better than you do.

Andys 17y ago
I run a small VPS hosting company. You are right; the hardware cost is only a small part of the total outgoings for this type of business. In that regard, the pricing model tends towards how big a slice of the 'pie' each customer gets to buy. The 'pie' is the total amount of hardware available for customer use. So if you want to buy more disk space only, that would reduce the size of the pie for everyone else who wants disk space, so you'd need to reduce the allowed disk space on all plans to leave some 'spare' in case someone wants to expand their disk. Slicehost instead have maximized the amount of disk space per customer and that hasn't left any spare, so you are (in theory) already getting a good deal. Perhaps there's room for a small startup company to arbitrate buying and selling of extra disk space amongst Slicehost customers :-)
- kragen 17y ago
  So if you want to buy more disk space only, that would reduce the size of the pie for everyone else who wants disk space, so you'd need to reduce the allowed disk space on all plans to leave some 'spare' in case someone wants to expand their disk. Or maybe Slicehost could use some of the money to buy some more disk space and hook it up.
  - Andys 17y ago
    You missed my point: If they give you some more disk space then they have to decrease everyone else's space. What you're suggesting means buying a new "pie", because they've sliced up the existing pie and allocated all of it, completely. This would mean buying more datacenter space, more servers, more networking equipment. When you want to offer disk space to customers as a product, it has to scale, you can't just plug in a USB HDD every time someone emails to ask for more space.

acangiano 17y ago

I think he has a very valid point, and Slicehost should take notice. However, I also think that he has outgrown the VPS space. I would contact SoftLayer if were him.

petercooper 17y ago
A big "seconded" for SoftLayer here. I've trusted a lot of stuff to them in the last few years and never had a problem.

patio11 17y ago

I'm also on Slicehost, and have been for a few years now. My spending on hosting goes up every year, my spending on hosting as a percentage of sales keeps going down. This is principally because I spend most of my time figuring out more ways to charge more customers more money (they certainly don't pay 2006 prices any more) and less of my time worrying about servers or trying to shave money off my hosting bill. Now, if you want to treat hard drive space as a commodity, there are many service providers out there who are happy to meet your needs. You'll have to put up with some of the pain associated with dealing with a commodity service. Slicehost (sensibly) has no particular desire to commoditize their offering or price like they have done so.

mdasen 17y ago

There are providers offering better pricing. ChunkHost has 2GB instances for $66/mo. You can get a 512MB instance to try for free during their beta. Prgmr (which is very, very basic and much harder to use) offers 2GB instances for $36. However, their service isn't so automated. The issue is that Slicehost now operates on a premium level - they're a big name. And you're paying for that name. Linode offers slightly more competitive pricing, but again name. People are willing to pay up a little in order to get something they think will have better uptime. But this is one of the reasons that I left Slicehost. When they started, you could get a 512MB dedicated server for around $70-100 with no RAID and crappy reliability. The cost thing is starting to swing back toward dedicated hardware as for $160 a place like Softlayer will give you a 4GB dedicated box or an 8GB server for $210 (both coming with 2,000GB of bandwidth). It's still hard to match on the low-end because when you're dealing with dedicated hardware you have electricity and rackspace which, well, a server has to take up physical space. But Slicehost and other VPS providers haven't cut prices and adjusted as things changed which has made dedicated boxes a lot more attractive. If you have 7 2GB slices, you might want to look at a dedicated box. Buy a box with 16GB of RAM, 4 processing cores, and get your VMs running on it all for around $460. That compares favorably to the $910 Slicehost would charge. Gets even better at 32GB for $660 vs. $1820. Just remember that VPSs aren't the be all and end all. They're a tool. If the pricing of other options is working out better for you, look into that.

smakz 17y ago

Have you looked into EC2 at all? While they have precanned "instance types" as well, they also offer a separate Elastic Block Storage service where you can ask for as much storage as you want, and it acts like a virtual hard disk on your partition. http://aws.amazon.com/ebs/ http://aws.amazon.com/ebs/

reedlaw 17y ago

[F]or hosting providers that do not a) increase their hardware configurations or b) decrease their price on at least a bi-yearly basis, their profit margins are actually increasing over time. Not necessarily. What about inflation? It's remarkable that technology continues to become cheaper while our currency is decreasing in value. It just makes me wonder what we'd be paying if we used hard money instead.