$20/month is prohibitively expensive for one-off side project hosting and there's lots of utility to be had from a cheap low-RAM, low-CPU server. I'd buy 10!
(Note that I'm not intending this to refer to you specifically, since you're already a subscriber anyway.)
Thus when you segment the market by "people who can afford $20-100/month", you are also segmenting the market by the correlating variables "people who are mad at their current host" and "people who can spare several days to migrate their infrastructure".
As a member of that class who migrated to Linode, I can attest that the size of that market is nonzero. But I can also attest that a great many projects start and remain on AWS and lowendbox where the barrier to entry is much lower, and even as a satisfied Linode customer I continue to start and continue to maintain many projects in those environments.
One of the biggest costs of running a SaaS business is support. I'd guess that there's not a whole lot of difference for Linode in the cost of supporting a $10/month vs. $320/month box. In fact, there may be negative correlation -- I wouldn't be surprised if the cheaper customers are more expensive.
Now, your argument hinges on there being a high conversion rate from low-end plans to high-end plans. I'd guess that rate is quite low, in fact. Most accounts probably never upgrade and / or cancel after a few months. Now, the canceling in the first few months is a big problem as well, because for most SaaS businesses, your biggest support cost is going to be concentrated in those first months where the customer is getting set up. I wouldn't be surprised if it takes Linode a few months, on average (not median since support isn't evenly distributed), to get into the black on the low-end accounts.
The variables in that equation are really important in deciding if it's worth putting up with cheap, less knowledgable, high churn customers just in the hopes of upselling them over time, or if it's better to slice off the segment from the beginning that finds $20/month to be onerous.
The hourly, broken-up billing is a smokescreen; for exactly what you get out of a (now) Linode 1024, you'd pay $50+/month or so on AWS. Don't forget total bandwidth, an elastic IP, and so on.
The ongoing TCO of AWS is much higher than Linode, of course. But that's precisely my point: you want to capture customers at birth, incubate them into adulthood, and then charge them a lot of money now that they can afford it.
Although if you want to be pedantic, let's say "actually useful, potentially-production barrier to entry". There. Fixed.
I don't find my cheap t1.micro based IRC bouncer / VPN / reverse SSH endpoint / static-content generation box to be an awful joke at all. They're quite useful for many things.
There are $10 VPS solutions out there, but their poor reputations lends credence to the idea that $10 VPS solutions are not where the money is at.
Its not a smokescreen if you are using AWS for a cloud (e.g., dynamically provisioned according to need) server infrastructure rather than as a simple VPS.
Being unprofitable and not being able to spend $240 / year is a different issue.
The first is about the project being unprofitable. The second is about you being broke or not believing on it to spend even 1/150 of your income (I'm speaking of course for US/EU citizens/wages).
There are however other vendors that have even $5/month plans for VPS (and even offer SSD drives). Try Digital Ocean.
Personally I've started using Digital Ocean for those smaller non-production servers (staging, dev etc). I still wouldn't trust DO for anything production.
The Linode service and support is second to none, and I'm happy paying the price (which now gives effectively twice the value!).
The interesting thing is that linode started out as a cheaper alternative to slicehost, so its ironic that they are now trying to differentiate themselves in much the same way slicehost did back then.
You have that backwards, given that Linode predated Slicehost by upwards of three years.
Linode have been around since 2003. I think Slicehost was founded later than this (in 2006 according to a quick search for their name.)
This is correct. I signed up with Linode in 2005 and there was no Slicehost then. I was moving from another VPS provider (Redwood Virtual) which had twice the resources for the same price as Linode but were really, really crummy (they don't even exist anymore). That experience really taught me the value of considering quality in addition to the price/feature ratio, which is why I'm not jumping ship to DigitalOcean. (I might if/when they establish a solid reputation, but no sooner.)
- Provisioning is conceptually cheap, and this is their killer feature. You click the "Make a new VPS" button, you pick your distro, how much RAM you want, and an SSH key, and they spit out an IP address less than a minute later. `ssh email@example.com`
This is much nicer than eg. finding or downloading a box to mess with Vagrant or taking who knows how many hours to set up your own distribution in VirtualBox. Just a few minutes ago, I spun up a box, messed around with Gitlab, and destroyed it. Completely seamless; has all but replaced VBox for these "one-off VM experiments" that I sometimes try.
There's also an API for automatic provisioning if that's your thing.
- Pricing: Cheap, as you'd expect. 512MB for 0.7¢/hr or $5 a month. There's no difference between monthly and hourly pricing so if you want to pay a buck fifty to rent the 24-core 96GB monster for an hour, have at it.
The thing about DigitalOcean is that they're still such a new service that they haven't gotten everything all polished yet:
- No kernel upgrades. The kernel is kept outside of your virtual machine, which means that if you upgrade your kernel, then you'll get mismatched modules and your network interface won't come back. They've pinned kernel updates in ubuntu so this shouldn't be a problem, but you have to say "IgnorePkg = linux" in your /etc/pacman.conf if you're on arch. Security updates will be a pain though...
- You can't boot into a recovery image/liveCD. If the above happens to you, I assume you'll have to either restore from backup or file a ticket and ask them to pick things out of your VM's hard drive. (You do get raw console access provided by an HTML5 VNC client, which can be useful)
- Payments are weird because you can't see your VM or network usage, so it's unclear how much you'll be charged until they bill you at the beginning of your month. If you select to pay via paypal, you can't pay by a credit card linked to your paypal account (at least for the first transaction any way); I had to give them my credit card information directly. (I imagine they do this to cut down on fraud or spam)
- Services are still a bit barebones. You have to roll your own load balancing. There's no support for mounting an image into another VM to recover files. No internal networks; every VM has a public IP address, which makes me curious to see how they're going to handle IP address depletion if they ever get popular. You have to use your own firewall via iptables or similar.
They will manage your DNS for you though, if you like, and you can ask them to take a snapshot and automatically back up your VM every day or so.
My verdict? I think they're lovely and I really reccomend them especially for personal projects, but as of this writing (early april 2013), you should think about these things before you decide to use them in production.
> There's also an API for automatic provisioning if that's your thing.
Oh, it is, and I wish these comparisons would consider the API more, since deploying a node via Linode's API and DigitalOcean's API are probably comparable. Declaring "my UI is faster!" as a sales point is disingenuous, since Linode is merely offering more choices during the provisioning workflow. Since you're saying "click", I assume you mean the UI too; at scale, absolutely nobody uses the UI any more. I manage a fleet in the thousands on AWS, and the last time I logged in to the AWS Web Console was about six months ago. It takes at least two minutes of clicking to spawn an instance in Amazon, but earlier today I launched 38 instances in about thirty seconds using the API.
> - No kernel upgrades. The kernel is kept outside of your virtual machine, which means that if you upgrade your kernel, then you'll get mismatched modules and your network interface won't come back. They've pinned kernel updates in ubuntu so this shouldn't be a problem, but you have to say "IgnorePkg = linux" in your /etc/pacman.conf if you're on arch. Security updates will be a pain though...
This isn't unique to DigitalOcean and is fundamental to the way Xen works (the kernel is loaded by the host, not the domU). However, Linode solved this problem better by providing kernels with most modules that you'd ever need built-in. You can upgrade all you want on your filesystem and not run the risk of hosing your machine, because your modules generally aren't considered at all. You can still add them by compiling against the upstream Linux sources, but the core modules aren't loaded from your filesystem (on my Linodes, my modules/ directory for the running kernel is empty). There's also a loader for your own kernel on the filesystem, PV-Grub, which DigitalOcean doesn't do.
> - You can't boot into a recovery image/liveCD. If the above happens to you, I assume you'll have to either restore from backup or file a ticket and ask them to pick things out of your VM's hard drive. (You do get raw console access provided by an HTML5 VNC client, which can be useful)
Only if you screwed networking. Lack of recovery = showstopper.
Digital Ocean uses KVM, not Xen, per https://www.digitalocean.com/faq so I'm not sure why they would need to pin the kernel.
Here's the docs for DO's API: https://www.digitalocean.com/api I agree that UI isn't strictly necessary, but the reason why I brought up the UI was because as an "amateur" user, that's what I care about.
Why are you doing that?
This is much nicer than eg. finding or downloading a box to mess with Vagrant or taking who knows how many hours to set up your own distribution in VirtualBox."""
I don't get this; finding or creating a base box for each disribution you want to use is a one-time cost. There are many existing boxes listed at http://www.vagrantbox.es/.
And since you mentioned it, I have been following their Twitter replies and apparently private networks are coming soon (https://twitter.com/digitalocean/status/321650732703023105).
Alternatively, Hetzner will give you a 512MB VM for about $10.34/month.
Prgmr is also really great too, 64MB for $5/month (by comparison, 512MB for $12/month). Run by an HN fellow, so that's also a plus.
EDIT: goodness gracious, i didn't realize that literally everyone in this thread is mentioning DO when I wrote this post!
1st site: https://www.firstsite.com:12345/
2nd site: https://www.secondsite.com:24328/
3nd site: https://www.thirdsite.com:37712/
Normally this isn't a problem, except that some browsers nowadays default to requesting the HTTPS version first. That means if you're serving an HTTP site and an unrelated HTTPS site, and a user accesses the HTTP site via an HTTPS connection, there's a good chance you'll end up serving the unrelated HTTPS site plus an SSL warning instead, because that's how Apache does things.
How is that Apache HTTPD's problem? Nginx would do the same thing. When you don't define a ssl version of site.com for ip:443, you get whatever the default cert/vhost is for that ip:443. What would you have a webserver do differently?
Sure there are other options but I'd rather not have accounts all over the place, and I like Linode.
Linode's problem with $10 accounts is not with customers like you who are paying them decent money otherwise - it's with customers who would sign up for $10, break things and expect $50 a month worth of support on an ongoing basis.
Most customers looking for a cheap VPS (to learn on, to experiment etc) are not going to be profitable unless you provide virtually no support, so by slicing off that part of the market they can offer a uniform level of service without compromising their profitability.
How about not revert to a "default"? Just serve a redirect to the HTTP version if a HTTPS is not available for that vhost.
It's not the same as $10 a month but it's less than $20 and their support is excellent (5+ year customer, but more for their excellent DNS management console.)
Your package is only € 5/month now - for €10 you get 4GB/150GB/5TB which is only the quarter of the price of an almost equal (no SSD, but more HD and traffic) DO instance.
Still a great deal though :)
/e Apparently google sent me to the dutch one by default! Thanks google!
If you're capable of using a bare-bones Linux VPS but are unable to pay $20/mo for your side projects, it's time for you to find a better paying job.
Bottom line: it has nothing to do with income, but what people value.
$7.30 / month for a 0.25G instance (on the members plan)
$11.68 / month for a 0.5G
$22.63 / month for a 1G
I've worked with them a lot, and they are excellent. The underlying hardware is really, really fast, their tech support guys are very competent, and they are highly responsive.
BuyVM.net is also very reliable and competitive for what you get.
They actually have stock which only seems to happen a few times a year.
I've been using these guys for small projects for about a year now - never a problem.