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Perhaps I have selective memory, but I've never seen Linode lower prices, they just keep upping the specs on the lowest tier.

It reminds me of something I learned while working for Comcast years ago - never lower prices, just keep adding "value".

>Perhaps I have selective memory, but I've never seen Linode lower prices, they just keep upping the specs on the lowest tier.

Yes, exactly. I'm saying that is the standard way to do it in the VPS market, in part because until D.O. most of us were self-funding, and it's way easier to pay for double the compute resources than to deal with a 50% cut in revenue.

In the "cloud" market where amazon is, the standard way to do it is to directly lower prices.

AWS is a little bit a hybrid of both. If you're paying hour-to-hour, all cuts are immediate. But there is such a huge discount for reserved instances, that many large clients are using a large proportion of them. With a 3-year "heavy utilization" reserved instance, Amazon has gotten a significant % of the total price for running that instance up front, locked in for 3 years. Since the biggest part of the revenue (the reservation fee) is locked in, cutting the hourly rate only gives back a smallish part of the revenue to those kinds of clients.

Really? when they lower the price of the per-hour billing they don't lower the locked-in fees?

Huh. In the VPS market, from what I've seen, the rule is "treat your existing customers as well as your new customers"

while, say, the co-location market is like the real-estate market. "Subsidize your new customers, and if they are still alive when the lease is up, take profits in the form of much higher renewal rent."

I guess what you describe with pre-pays is sort of inbetween. There's a difference in most minds, I think, between raising a price and just not lowering it when you perhaps could be expected to. Most people new to the real-estate market feel pretty bent out of shape when they find out that they have to pay significantly more in rent to renew their existing contract than they will pay if they move.

As one of your customers, I've already committed $X to my instance. I would be delighted to get 2x resources compared to .5x cost.

Thanks. That's good feedback. We are working hard on the upgrades, but I have been way too slow :(

I do observe that there seems to be a price floor phenomena; for any customer, any price below $x is largely equivalent; they will go for the best thing they can get for $x, so providing a better product helps, but lowering the price below $x doesn't change the equation for that customer. Of course, $x is different for each person, so lowering your price does get you customers who had a lower value for $x.

I've already lost most of the customers that had a value for $x that was greater than what they were paying me at this point; I'm not losing customers nearly as quickly as I predicted. Right now, if I screw something up, of course, I lose the effected customers; I mean, it's really dramatic. You always lose some customers when you screw something up, but I lose way more now than when my prices were lower than the credible competition. But other than that, things have largely stabilized.

I should note that I'm a hobbyist/enthusiast type of customer; if you're losing business on price grounds, I can definitely see where a price cut would help.

(Also, it doesn't help that the wiki is crufty and out of date, and boot menu, last time I rebooted, was still on CentOS 5.)

> I should note that I'm a hobbyist/enthusiast type of customer; if you're losing business on price grounds, I can definitely see where a price cut would help.

I think similar principles govern business spending, only $x for them is usually higher. I have a couple of business co-lo customers who have been customers for like half a decade; some of them are still using the hardware they came in on. They could save a lot of money by upgrading hardware (and thus reducing their footprint) or even moving to "the cloud" at this point, because while co-locating modern hardware is cheaper than "The Cloud" - co-locating ancient hardware is not.

The idea is that it works for them, so they aren't going to fuck with it. I'd bet money, though, that if I fucked something up and caused them a serious outage, they'd be gone pretty quick.

>(Also, it doesn't help that the wiki is crufty and out of date, and boot menu, last time I rebooted, was still on CentOS 5.)

I just want to acknowledge those problems. We only have vague plans for the wiki, but we're actively working on upgrading the rescue image and the hypervisor (which, I imagine, is the part of the boot menu you are complaining about.) - these changes will probably not be implemented until our switchover to the new ganeti-based system, but... that should be soonish.