Why the large cost for disk space?

@Beren:

Considering that HDs are approaching $0.50 per gig it seems a bit expensive to charge $5 per gig per month. I'm thinking of linode as a backup server and would like to use more diskspace.

I agree. I would expect Linode disk space to be more expensive than the actual cost of the disk because the cost of administrating the systems and ensuring that they are reliable has to be factored in. So I would be comfortable paying say 10x the cost of the disk space I use, each year that I use it. This would be about $10 per GB per year for a high-quality disk that costs about $1 per GB. This is 83 cents per month per GB, or about 17% the cost of disk space at Linode.com. In other words I think that Linode.com's disk space prices are 6x too high.

I think that UML hosters are going to have to become more competitve on disk space prices to remain a viable alternative to dedicated colocation. The problem is that right now, no UML provider is giving good prices for disk space. So Linode.com has very little incentive to reduce those prices at the moment.

Industrial-strength hard drives for server applications cost a hell of a lot more than consumer-grade IDE drives.

For instance, a 146 GB Ultra 320 SCSI drive will set you back $600-$750, whereas I've seen 200 GB IDE drives under $100.

@rjp:

Industrial-strength hard drives for server applications cost a hell of a lot more than consumer-grade IDE drives.

For instance, a 146 GB Ultra 320 SCSI drive will set you back $600-$750, whereas I've seen 200 GB IDE drives under $100.

Three points:

1) Linode hosts do not use Ultra 320 SCSI drives, they use IDE drives

2) Even if Linode.com did use those expensive drives, their cost is about $5/GB. My estimate for a "reasonable" cost for Linode.com disk space was 10x the cost of the drive space per GB per year. For the SCSI drives you mentioned, this would be $50/GB/year, or about $4.16 per month. Linode.com's prices for disk space are still more expensive than this.

3) The drives you mention are that expensive partly because they have increased quality and reliability. This would mean that the costs to Linode.com of maintaining such a disk would be less. So I'd revise my 10x figure downwards a little bit, say to 8x. That's $40/GB/year, or $3.33 per month.

Anyway, point 1 is the most relevent in my opinion. We should pay for what we are getting, and we are not getting U320 drives. We are getting good quality IDE drives (I believe in a RAID configuration which makes the cost per GB a multiple of typical IDE prices), and should pay for that. I think that my original estimate of $0.83/GB/year is still a good one …

@Beren:

Considering that HDs are approaching $0.50 per gig it seems a bit expensive to charge $5 per gig per month. I'm thinking of linode as a backup server and would like to use more diskspace.
Take a closer look at the shared webhosting industry's pricing. For example, 1and1 has a basic package for shared webhosting for $5.00/month, which includes 500MB web space. Their $20/mo plan includes 2000MB. With Linode, $20/month gets you 3GB, root access, and all the features of a dedicated server. This is very much an apples-to-oranges comparison, but you get my point…

On each host server, there's only a limited amount of "reserved" disk space that isn't allocated towards the slots that Linodes will occupy. The rest of the space is used for the default disk image templates, the kernels, the host's OS, build tools, source trees, and the like. I'd rather have someone upgrade to a larger plan with more headroom for the user's applications, thereby less taxing on the hosts' resources because the Linodes swap less, and generally provides a better experience for everyone.

I agree the GiB pricing needs to come down a little. Those prices haven't changed since I launched last year, although I have increased the default disk space included with the plans twice since then.

I'll try to review the pricing this week. Thanks for the comments.

-Chris

@caker:

@Beren:

Considering that HDs are approaching $0.50 per gig it seems a bit expensive to charge $5 per gig per month. I'm thinking of linode as a backup server and would like to use more diskspace.
Take a closer look at the shared webhosting industry's pricing. For example, 1and1 has a basic package for shared webhosting for $5.00/month, which includes 500MB web space. Their $20/mo plan includes 2000MB. With Linode, $20/month gets you 3GB, root access, and all the features of a dedicated server. This is very much an apples-to-oranges comparison, but you get my point…

On each host server, there's only a limited amount of "reserved" disk space that isn't allocated towards the slots that Linodes will occupy. The rest of the space is used for the default disk image templates, the kernels, the host's OS, build tools, source trees, and the like. I'd rather have someone upgrade to a larger plan with more headroom for the user's applications, thereby less taxing on the hosts' resources because the Linodes swap less, and generally provides a better experience for everyone.

I agree the GiB pricing needs to come down a little. Those prices haven't changed since I launched last year, although I have increased the default disk space included with the plans twice since then.

I'll try to review the pricing this week. Thanks for the comments.

-Chris

Thank you for your reply. I think you are underscoring my main point, which is that nothing will drive down these prices except competition. The direct competition is other UML hosters and as you pointed out, their disk prices are the same or more. Less direct competition is dedicated hosting, and I don't know much about the prices there but I'll bet that disk space is cheaper (although the overall cost is almost certainly higher which is why people use Linode instead).

Linode.com provides an excellent value as a UML hoster, and as far as I can tell, after quite a bit of research and experience, is by far the best UML hoster hands down. But still, it feels like the entire UML hosting industry is overcharging for disk space. I believe that this will only change as competition between UML hosters heats up and factors like lower disk space cost of one UML hoster versus another is a deciding factor for customers. When this occurs I assume that Linode will lead the way as it as for all other UML hosting developments.

Whoops, in case it wasn't obvious that post was by me, bji. I forgot to log in again before posting, whoops!

I'd personally rather pay more for a higher level of service and quality.

My understanding of it is simple. The server has a limited amount of diskspace to start with, a majority of this space will no doubt be allocated to linodes.

The remaining space may be in demand by the linodes allocated to that server. If it is priced too low, then there will be a demand for space that can't be provided.

Hosting is a balancing act, providing the right balance of resources so that it doesn't have an adverse affect on the server.

I find that hosts that offer too much space for too low a price get bitten in the long run. It works in the short term when not everyone utilises the space but over time as each person fills their quota, the server performance takes a hit.

Let me start by saying that I think linodes provides an excellent service.

I went to 1and1 and they also offer a dedicated server that offers 40 Gb for $59 per month. The same amount of space on linodes will cost about $200 per month.

My point is the storage prices have dropped to a price where the cost of storage space is rarely a problem. Paying more then the capital cost per month seems expensive.

That's fine – Linode.com serves a niche market. I know the same argument I made works against me when comparing against certain dedicated servers. If you need that much space, a virtual server is probably not the most cost-effective route to take.

Eventually, I'd like to provide backup space for Linode.com customers at no additional charge. The logistics for backing up all of the Linodes' data is crazy -- and the price we charge for disk space will help offset that. I'll never be able to offer disk space at pennies/gig.

-Chris