> I think that VPS providers will have to start lowering the prices for their higher RAM instances pretty soon because RAM prices have gone down so far.
Pricing of VPS and dedicated servers scales with RAM but is entirely unrelated to the cost of RAM chips. Hosting companies use RAM as a proxy for their real costs -- power/cooling, hardware wear/replacement, bandwidth and support. There's a strong correlation between the amount of RAM a customer purchases and the hardware utilization of that customer, that's why the industry has converged on that component as the main factor in pricing.
Thinking that these companies charge $25/gb/mo for RAM has anything to do with the cost of physical RAM (which would be paid off in the first month) is a mistake.
I'm frustrated as anyone with the difficulty of finding affordable high-RAM instances/servers without colocating, but complaining to the host that their pricing should change because of the price of physical RAM won't get us anywhere. That's not how they set the prices.
This is probably also why EC2's High Memory instance types don't actually overcharge you for ram.
Consider a double extra large high memory ec2 instance - it costs you $6093/year for 4 cores and 34gb ram.
On softlayer, a dedicated quad core xeon processor with 32gb ram costs about $12,600/year. I imagine the CPU speed and disk IO on softlayer is better than the EC2 instance, but for many workloads (read: memcached/redis/giant in-memory calculations) that doesn't matter so much.
Their proxy is also a market distortion. By not pricing RAM at closer to its marginal cost, they encourage people to burn CPU instead of RAM in algorithm design, which in turn increases power usage and creates cooling problems.
You seem to be saying "In my imagination, their empirical observations are wrong." What you're saying could theoreticlly happen, but that doesn't mean it actually happens in real life.
You seem to be replying to a comment that exists in your imagination.
When targeting an environment where CPU usage is cheaper than a 30GB hash table, I'll choose the CPU usage. It's very simple. I am not actually commenting on anyone's empirical observations, theoretical, imagined, or otherwise.
Right, its a proxy for all of their costs, but when the pricing and hardware stays the same while hardware and bandwidth costs decline, that means the value is declining.
Pricing of VPS and dedicated servers scales with RAM but is entirely unrelated to the cost of RAM chips. Hosting companies use RAM as a proxy for their real costs -- power/cooling, hardware wear/replacement, bandwidth and support. There's a strong correlation between the amount of RAM a customer purchases and the hardware utilization of that customer, that's why the industry has converged on that component as the main factor in pricing.
Thinking that these companies charge $25/gb/mo for RAM has anything to do with the cost of physical RAM (which would be paid off in the first month) is a mistake.
I'm frustrated as anyone with the difficulty of finding affordable high-RAM instances/servers without colocating, but complaining to the host that their pricing should change because of the price of physical RAM won't get us anywhere. That's not how they set the prices.