I've searched through the forum and couldn't find much reference to this. However, apologies if this has been discussed previously. I imagine not being the only person with this issue.

Let me start by saying how much we love Linode. We've used (and still are using) quite a few virtual hosting providers over the years and linode comes on top every time. Support, availability, ease of use of the control panel, flavours of linux, kernel tweaking, you name it - Linode is better on every aspect.

There's only one exception however. Rackspace does per-hour billing. Now, I know that if you set up a linode and then delete it later, you'll get a pro-rated refund, which means there isn't much actual difference in terms of pricing. I'm not sure whether the refund is calculated on a per-day or per-hour basis, and that's only slightly important.

However, there's a big psychological difference. If I kick-off a new 4096 linode, my managers gets an email telling them they are billed for $160 instantly. That's the kind of thing that stops me from launching linodes more frequently, using them for testing etc. And this is where we end up using Rackspace more and more...

Are there any plans to introduce per-hour billing on linode?? Or somehow making the billing process more casual-use-friendly??

I think this would be a nice thing to have as well. Even though you get a refund, your card still gets hit for the full price up front, which is somewhat of a deterrent.

I think it would be more effective to track your usage and do a final bill at the end of the month for all of your usage.

Your manager shouldn't see a $160 charge each time. The prorated refund is applied to your account, not the credit card. The invoice you receive will indicate how much is being applied to the credit card. Thus, you will only have large charges after the initial purchase, after the start of a new month, or after you have run out of credit in your account.

Since I'm never good at explaining things, let me illustrate. You purchase a $160 plan on May 1st and cancel it on May 2nd. You'll get ~$155 refunded and credited to your account. If you buy another one on May 10th you'll be charged ~$108 out of the $155 credit. Your managers will receive an invoice, but it will have already been paid out of your credit. Then, on June 1st they will receive a bill for $160 minus what is left of your credit.

Post-payment would be very nice for some use cases, but I guess this is where Linode stands firmly on the VPS side of the VPS--Cloud continuum. Clouds are billed per-hour and usually paid for at the end of the month. VPSs on the other hand are paid for at the beginning of the month, and you get a prorated credit if you cancel before the end of the month.

This might have to do with the fact that major "Cloud" providers such as Amazon and Rackspace are very big companies that focus on large B2B transactions. Because they're big, they can afford to hand out server instances first, deal with any abuse issues that inevitably come up with these "free for now" services, and wait until the end of the month to settle the bills. VPS companies, on the other hand, are usually more consumer-oriented and also smaller, with less manpower to deal with abuse, and less flexible budgets. Amazon can easily absorb a few abusers who burn 100TB of bandwidth without paying. Many VPS companies can't.

At least this is how it seems to have been historically. Since Linode is now getting pretty big -- it currently has over 2,000 availabilities -- it would be interesting to see if Linode might be interested in adopting a post-payment model.

As hybinet has pointed out, what you really mean is postpaid versus prepaid. I can tell you from experience that linode is prorating much smaller than the day, probably down to the second or millisecond.

Thanks for the comments and clarifying a couple of things.

Having the credit back on the account helps, but not always. If, for example, I need to set up, say 4 servers for some intense test-sprint, but only for a few hours, the credit card would get hit by 4 x $160 ... And even if we can as a company afford to put credit on our linode account and use it later, it's still a fairly big hit. Like I said on the original post, it's mainly a psychological barrier, but yet important in my opinion. It does in effect make us use Rackspace more than linode, whereas technically we're more satisified with Linode.

As for post vs prepaid. I understand the concern with non-payments, but as long-time loyal linode customers, I hope we can be trusted a little more. This concern with non-payments can also get handled using some sort of threshold, or maybe even paying a "deposit" of some sort towards per-hour billing (activation fee?).

This is exactly the kind of psychological issue I was talking about though.

My manager will first see $160 charge. Then a few days later they'll see $108 bill (paid out of the credit). Managers (or maybe it's just mine ) tend to look at the sum, not necessarily the actual cost. Psychologically, it seems like $160 + $108, instead of $5-6, which is the actual amount spent.

Another thing - representing the cost as 24 cents per hour, (psychologically) seems much less than than $160 per month. Even though the latter is actually cheaper.

Lets see.... You have managers to dumb to do simple math and realize that the FINAL cost is just a few dollars - regardless of the original charges less credits.

Yet you're baffled by Linodes unwillingness to extend credit without bank statement, company financials, and credit reports?

Unless you've lived in a cave the last few years - you'd understand that trusting your clients or business partners with unsecured loans is the quick path to bankruptcy.

Personally, I'm just happy they prorate the whole process instead of stiffing me for a full month.

If you're usually using one linode at $160/month and need 4x that for a short period of testing, with most of it credited back (say $640 billed, $600 credited back) and it'll take you multiple months to use the credit, I would open a ticket and ask if you can get the $600 credited back (or maybe 600 - next month's 160). OTOH, if you'd use up that credit the next month, you just need to explain that better to your management.

I can certainly explain this to my managers, and they are not stupid, but I was talking about the psychology of it. Linode 'feels' like it costs more when in fact it doesn't. And sometimes it does cost more if you have to pay up-front, for a usage burst.

As far as bank statements etc, perhaps we would be happy to provide those to get per-hour billing. We've been with Linode for a number of years now. We are also concerned what happens if Linode disappears one day. Sure, it wouldn't be our money that they could potentially run away with, but our server resources are crucial to our business! Our customer data etc. It's a mutual risk we're taking here when establishing such a relationship.

The fact of the matter is that Rackspace and Amazon do not require it, and provide per-hour billing. It is easier for us to use those services, like I said - despite Linode being superior in many ways. So I'd say another quick path to bankruptcy is losing customers or even losing business to your competition.

In reality Linode DO do per-hour (or as suggested earlier, per second!) billing. They just don't present it as such, and don't bill in such a way, which I think would give them a competitive advantage, and make the whole experience even better.

You've just said that amazon and rackspace do post-paid billing, so how would that give linode a competitive advantage?

It would put linode on par with those guys on the billing side, which means people will more easily judge by features/value (and also comparing cost would be easier). Currently, it seems to me that the billing structure puts Linode quite far behind when it comes to decision makers (who are usually the ones paying the bills). Psychology / Appearance / Perceived-Value (as opposed to real value) do play a part in my opinion.

Your managers appear to be idiots, so let's not put kowtowing to their idiocy down as a competitive advantage.

I appear to be an idiot too then. When faced with the choice of paying $160 now, and then keep this credit balance on the account, or set up a host on Rackspace for a couple of hours and only get billed for those two hours later down the line, I tend to choose Rackspace.

...If those two hours lead to a successful server prototype, and the server image already stored on rackspace anyway, it's a much easier choice to keep the server running there, than it is to start from scratch and build a new image on Linode.

If you're a totally new customer to Linode, I buy that. If you're an existing customer that argument is flawed from my point of view. It's money you're going to pay no matter what. So pay the $160, use it for your need, get a credit and get some time heavily discounted or even "free" for your other node.