>> Well, maybe if caker sold it and bought an island or something

We can only hope he and his team would start another one.

I started checking into DigitalOcean recently as well. I ended up doing some performance benchmarking, to make sure I good idea of what to expect from a DigitalOcean server. Naturally, I compared them to a Linode instance. I published the results on my blog: http://jasonormand.com/2013/02/08/linod ... enchmarks/

tl:dr DigitalOcean has better performance per dollar, generally speaking. Linode has the edge when it comes to CPU which will be more apparent when you do something like transcode a video.

I'm reading a lot of FUD about DigitalOcean on this thread, rather than rational analysis, which is concerning.

I'm currently developing my SaaS offering and evaluating VPS providers. My testing environment is on Linode and I'm very happy with what I've seen. My current plan is go with Linode to host all my clients' boxes.

However, for the same price as a Linode 512 I can run 2 x 1GB nodes at DigitalOcean. Apparently local LAN is coming in two months time so I can actually take advantage of them. More good reports and benchmarks are appearing about DO. Twitter commentary is positive.

I want to stick with Linode. I like the idea of basing my entire business and livelihood on a mature company with proven credentials. I don't want to rebuild my server images all over again. But at the moment DigitalOcean have just got Linode crushed on a performance per dollar basis. And I mean crushed so badly that I almost have no choice, commercial pressures being as they are.

I'll be watching eagerly to see how Linode respond. For me to stay with them they don't even have to match Digital Ocean's pricing. They just need to meet them halfway (get in the same ballpark, even) and let their brand/track record take care of the rest.

Well, when your services are priced at what are obviously a steep loss, FUD is bound to follow. It turned out to be largely justified too, because when they got called out on how silly their plans were, they put caps on the bandwidth usage.

I looked into that allegation and they claim to be profitable. They have also stated that prices will not rise. That said, I do share your concerns that the pricing will result in overselling. I also value track-record very highly, but not necessarily 300% more highly.

People spread the same FUD about Cloudflare when they upset the traditional CDN business model. But they're going from strength to strength and their service is still free for Mom & Pops, despite what the doom-mongers forecast. We could have a similar scenario here.

Wait a sec. You don't need to rebuild your server images to copy them from one host to another. Boot off a recovery OS and copy the disk images anywhere you like.

I used to install OpenBSD on dedicated servers like that.

They also claimed that unlimited bandwidth was sustainable at the $5 pricepoint, but when people actually tried to use it, they got shut down and the unlimited disappeared. Considering that the one-time cost for 20GB of enterprise-grade SSD storage is probably $50-60 on top of all the other costs, how can they be profitable at $5/mth?

Well, like you said. It's a one-off cost. Sweat those assets for 5 years and you have a positive ROI.

Thanks for the tip Sednet. I will try that.

Lol - you're joking right?

Any business model that has a 5 year lead time before profits is doomed - especially in the IT service industry.

Besides, when have you EVER had server hardware running 24/7 last 5 years?

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Either provide enough details for people to help, or sit back and listen to the crickets chirp.
Security thru obscurity is a myth - and really really annoying.

Okay, $50-60 might not sound like much. But then think about - cost of other server parts. You'll probably also want at least 2, preferably 4 drives in a server in RAID. You'll want manpower, etc., etc.

We haven't even started to figure in costs of sending the parts to repair (even if you have a guarantee, you'll probably still pay for shipping), keeping spare parts, server colo fees, storage for those spare parts (they need to be somewhere in the DC you're coloed in for easy access, 24/7 staff in the DC.

Do you still think they could survive on $5/mo. realistically?

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lakridserne
Serverfruit - shared and managed VPS hosting, SSL certificates and domains
Awesome servers rented from Linode!

I should've said 'nice ROI'. It might be cashflow positive in a year for all we know. The bulk of profits might be derived from the top 20% of customers and the rest might be run at breakeven for all we know.

What do we really know? All I'm hearing are the same accusations that were levelled at Cloudflare, which turned out to be complete garbage.

I hate to say it, but I am tending to agree with you. I'm not quite ready to move my production system over -- I'll wait a bit longer to see if they prove reliable. But for f***s sake people -- the benchmarks show them beating Linode and they are 1/3 the price. Why so defensive?

Errm, the benchmarks I saw put them well behind Linode in everything but disk IO...

The reason people are hating on DigitalOcean is because of:

If it sounds too good to be true, it probably is.
There's no such thing as a free (or unreasonably cheap) lunch.
You get what you pay for.

When somebody is selling you a hosting service that they can't possibly break even on for 5 years, there's something funky going on.

Do you think their VCs will be that naive? It's more likely their business plan is to run the bottom tier at breakeven to build the brand and market share, while looking to the middle and upper tier products to bring in the dough.

Shared web hosting was expensive in the 90s. Now it costs $1 per month.

I once heard about a company giving away 5 gigs of online persistent, redundant, fast storage for free, along with their GUI interfaces to dozens of operating systems. It was unheard of at the time. They also came out of the same startup incubator as digital ocean and are backed by many of the very same VCs. Obviously it was too good to be true and couldn't last. You just can't undercut the established players like that.

Now this little fly-by-night company called DropBox is valued at $5 billion. Total scam though -- no way they can pay for their costs by giving away that bandwidth and storage for free. Any day now I know they will go the way of the dodo. Only a matter of time. Loss leaders always fail and go out of business.