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When pricing a value-add you want to price it linearly, with a volume discount, but such that after the volume discount the line is still steeper than the base cost curve. That way growing customers feel like they are getting a deal vs small fish, and are incentivized to use as much as they need, but you still drive your margins towards what the market will bear, provided your volume is growing. That curve will eventually squeeze out some of your biggest customers, but you can avoid this by cutting deals for them, e.g. Google with Apple.



Traffic is not important for every use case. If you run a store for physical items, how much traffic are you going to use? This is probably going to be less then 5% of your AWS bill, so you don't worry too much about it. If you host heavy images, big JS files (which you shouldn't do anyways) or offer downloads, you should probably use a CDN anyways. For big downloads, latency is not really that important as long as you get proper download speeds, so the CDN is going to be a lot cheaper.

Nor everybody wants to run the next Netflix or Dropbox in terms of bandwidth consumption. Even if you did, keep in mind that Netflix does not host the videos in the cloud.


Cloud, especially AWS is 10+ times more expensive that hosting same stuff on DO, Vultr or Bare metal. And you still need administrators, EC2 are just VPSes like any other service from other companies.


They are pricing themselves out of the market for traffic-intensive small-fish operations that way though.


Why do you think they want any of that action? I think their pricing conclusively demonstrates that they don't. Some of those customers are waaaay more trouble than they are worth. Also Google and AWS have "premium" bandwidth - massive redundancy and lots of peering relationships.


> traffic-intensive small-fish operations

Do you have any examples? It seems like it's always been a grow-and-become-profitable-or-die-fast niche.


I run a few websites with video content which leads to 50TB+ per month. The business is profitable, but clearly I would not waste my money on expensive bandwidth.


Google clearly isn't trying to be a porn CDN


Which is funny because through YouTube they have to have the cheapest raw bandwidth in the world.

They need two traffic prices.... Fast low latency web traffic for the current 10 cents per GB. Slower more laggy CDN type bandwidth for like 10 cents per TB.


Don't Google have a CDN service?

Edit: yes. (https://cloud.google.com/compute/docs/load-balancing/http/cd...) But it's more of a CloudFlare competitor—a distributed caching reverse-proxy with a 4MB object cachability limit. Costs $0.008/GB, which is cheap compared to a real CDN, but expensive compared to CloudFlare's "free."


You miss out something there, I think. The $0.008/GB is for the load balancing. On top of that, you still pay for network egress depending on whether it is internally in GCE or to the internet. Those rates are from $0.20 to $0.08 depending on location. (EDIT: For traffic to the public internet)

And those rates are still in crazy territory compared to most alternatives other than Azure and AWS which have equally messed up bandwidth pricing last I checked.

I build caching solutions for customers that want to store their data in S3 or Google Cloud Storage, because the bandwidth prices at the big cloud providers are so out of whack that as soon as someone uses lots of egress (few TB a month or more), you can often cut your bandwidth costs by 80%+ or more by getting some dedicated cache servers to put in between your users and your cloud storage. That is after the rental and management costs for those cache servers are included.

(the reason for this rather than building storage solutions is that if the above fails you don't lose data. If you trust your abilities or service provider, building a multi-location storage setup with 3+ times redundancy that beats S3 etc. on cost by a large margin is fairly straight forward... But it's often easier to sleep at night if you have other people do the risky stuff..)


Funny guess, but wrong.


If you have time, I'd recommend purchasing dedicated servers in multiple geographical areas and setting up a custom CDN. It's much cheaper, however much less reliable and much more time intensive to manage and diagnose.


Which DCs would you recommend?


you can try finding good deals in areas you are interested (be certain to ask for "test" IPs, then look up their connectivity via _multiple_ looking glasses) on www.oneprovider.com and then pair that with a robust DNS provider such as NSOne and you've got yourself a pretty decent, bespoke CDN. provided you already know how to do reverse caching proxies and all the other "magic" a CDN needs to work.




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