Alex Hudson

Thoughts on Technology, Product, & Strategy

Stuff-as-a-service…

I read with interest the various Twitterings about price of disk space – in particular, about Bitfolk, but it applies to any other service really. Andy’s take on this is really worth interesting, although I personally think he’s defending Bitfolk’s pricing unnecessarily.

My basic philosophy on this is that price isn’t an issue; things cost what they cost. What is really at stake is the value of the service: is what I’m paying for worth it? Of course there are plenty of businesses which are effectively discount-merchants – the Ryanairs and Tescos of this world – but they don’t offer an awful lot of value. Trying to compete on price caters for a certain type of customer, but it’s a limited market.

It’s too easy to fixate on the cost of materials. You can look at a sandwich and say, “Oh, that probably cost 20p in bread and filling. £2 is a rip-off”. Things simply are not that simple though, unless you’re really truly price-fixated. If you have time to spend scouring the market for a cheap sandwich that’s similar in quality, fine – personally, my time is much more valuable than that.

Similarly, with VPS services, it’s easy to put together some raw numbers on hardware, divide it by a few people, and assume that it’s very cheap. Occupancy, failure and incidental costs don’t really factor into it, or the time to manage it. With that kind of service, the economies of scale really matter, and it’s difficult to see how you could do it more cheaply for the same price. But at the end of the day, even that doesn’t really matter.

What matters is the value of the service. For me, the value of Bitfolk is excellent: it’s a huge amount of management taken off my shoulders. I don’t want to manage Xen; I don’t want to have to worry about hardware-this and the vast kernel-patch hideousness. I don’t want to have to worry about I/O rates. Bitfolk is a service of good quality, and while it’s never going to offer bullet-proof VPS uptime I suspect you can’t get much better without moving to some canny clustering setup.

This is what I don’t understand: bitching about the pennies. Is £24pa too much for 20 Gb disk space? That’s £2 a month. That’s our sandwich from up there. It’s just not worth worrying about, in budget terms it’s noise. What matters is the quality of the service.

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1 Comment

  1. You’re right, the lady doth protest too much. 🙂

    I just hoped it would have been obvious, and then wanted to explain some of the other factors in play.

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