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Comment by pritambarhate | Hacker News Reader

Oh! They have increased the prices! I went to the page hoping price reductions. Looks like inflation is changing the dynamics for the hosting business too.

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I think it's overcharging customers to see how much they can get away with, like netflix. Jump on the "iTs inFlAtIoN" bandwagon and see how much profit you can squeeze out and see how well you can handle customer attrition while doing it. If it goes bad just say "oh looks like inflation is lightening up a bit now". I call it the Netflix Gambit (circa 2022)

Armchair hacker news CEO knows what is REALLY going on behind the scenes at digital ocean.

Your comment does not add to the discourse here

Honestly I think enticing shareholders is one of their primary motivators here, and the inflation is more of the excuse. Nobody else I work with is raising their costs in this space right now (we'll see how long that lasts though), and DO isn't exactly the bottom of the list on pricing.

The increase doesn't look too large, but if you need a similar alternative I like Vultr a lot, the Neocities CDN is hosted there and it's been rock solid performance for years, and it's quick to get access to competent tech support. I wish I had more infra hosted there actually.

Hosting is naturally deflationary, since the cost of the underlying hardware becomes cheaper per unit over time. Take storage, which has gone from roughly 10 to 2 cents per GB over a decade [0]. I believe there's a quote somewhere about AWS initially selling EC2 unprofitably, with the expectation that their costs would go down.

Not sure the underlying economics here for DO or their motivation, but I don't think DO can expect to their customers to react to this the same way customers are reacting to inflated costs in cars, groceries and the like. If other providers follow suit, maybe that's a sign of slowing efficiency in the hardware, end of Moore's law, etc.

[0]: https://www.backblaze.com/blog/wp-content/uploads/2017/07/ch...

In addition to inflation, they may also be offsetting part of the projected cost of the $4 tier as well.

> offsetting part of the projected cost of the $4 tier as well

Usually - well before inflation - this tier was $2.50.

I thought the $4 tier was new. Or did they announce intent a while ago at the $2.50 price point?

$2.50 was from comparing to the similar specs from Vultr: https://www.vultr.com/pricing/

The $4 droplet is a new option that is similar to what their current $5 droplet used to be some years ago. DO has never had a $2.50 droplet to my knowledge.

EDIT: I just saw your comment clarifying that you were speaking about Vultr. That wasn't clear from your phrasing, but I wanted to acknowledge it here.

If the title doesn't mention lower prices, you can be sure it's going to be a rate hike.

Changing the dynamics how when it is already overpriced. This is like all the businesses during COVID saying... It's COVIDs fault our customer service is terrible.

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