

Ask HN: How does prgmr.com survive? - DaveBuot

How does prgmr.com survive with competition like digital ocean?<p>I ask because before DO was around it was prgmr, linode and slicehost who were the most reputable vps services.  Slicehost went away and linode was always more expensive. prgmr served a portion of the market for those who wanted more control at a fair price. But now with DO the prices have dropped.
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akg_67
Low-end hosting is a stable cash-flow business. You buy/install/operate/manage
the equipment and recover original investment + operational cost + few more
percentage in return over the life of equipment typically 3 years. After 3
years you replace the old equipment with new shiny ones and repeat again.

But low-end hosting offers a good low-cost entry point for companies looking
to enter IaaS/PaaS business like DO. Sooner or later DO will move upward in
IaaS/PaaS vacating the low end hosting. Personally, I don't see DO catering to
low-end for more than 3 years when the need for equipment replacement will
come up to stay competitive.

The competition has to survive couple of years by managing the expenses,
managing customer churn, and extracting some additional life out of equipment.
Once DO equipment ages, the competition can install new equipment investment
and beat up DO on aging equipment and speed and feeds. It is very important in
this business to not replace your equipment at the same time as your
competition because value prop is always speed and feed at reasonable cost.

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PaulHoule
I think there have always been people who run hosting services on a
shoestring.

It's pretty easy to do if you are (1) doing everything yourself (meaning not
paying people who know less than you and don't work as hard as you) and (2)
you don't think about capital investments the way a 'real' business does.

(Some people, with $X in their pocket, will spend it on servers and so long as
the cash flow stays positive after that they aren't going to be concerned
about getting what they 'deserve' for their investment.)

I was the "technical cofounder" for Brazil's #1 chat service back around 2000,
and the nontechnical guy was always finding the cheap hosting service of the
week. (We were always hosting in the U.S. because this was cheaper and it
would have been hard for the Brazillians to stop us from running a competitor
to the state phone company)

We got some incredible deals, maybe 50% or 1/3 the price of "normal" web
hosting, but there were some times when we had the move the site in a hurry,
even once restore it from backup.

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joe_bleau
Better customer support than DO? Maybe some customers just like dealing with
Luke, a fellow HN member?

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slater
Less money spent on employees and marketing would be my guess.

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auriseturaiset
Yep. I'm pretty sure they didn't hire a webdesigner.

