>The thing that is holding you back is that you are very honest and conscientious.

I don't know if that's true or not, on either side, but it's certainly a great compliment. I definitely want to be seen as honest to a fault. (the counter argument is that I do often over promise. I do not always temper my confidence with enough reality. I'm not trying to be dishonest in those cases, but the effect is the same.)

Really, though, saying "I'm not successful because I'm too honest" sounds a little too much like sour grapes for me to accept it as the truth. I mean, I'm a cynical person, but it just doesn't ring true. Markets are more complex than that. Yes, there is a constant arms race between buyer and seller, an arms race of deception, but participating in that arms race is very expensive. I believe this is a lot of why "cloud hosting" and other transparently priced services are so much more expensive than colocation. People are willing to pay extra to avoid that expensive bullshit. (the other reason is that it's so easy to raise prices on hosted products... I will explain near the end of this message.)

Well, and more to the point, I'm mostly doing this for fun. I can make a lot of money working for other people, I mean, before I was published I was working at what I consider absolutely ridiculous rates. there's way less upside risk; but making bay area computer nerd wages is plenty comfortable. If I have to do things that make me feel bad to work for myself? eh, I'll just go back to working for other people. I mean, I'm not saying that I wouldn't do something I felt unethical if I were starving or I couldn't provide for my family or whatever... but I'm not in that position. My 'plan b' in case of failure is downright cushy.

>All you have to do to determine that is to read your page on "colo" at your site where you are very frank about the fact that the rent might go up.

Co-location is run like commercial leases; e.g. when it comes time for renewal, the amount the rent goes up is determined by how hard the landlord thinks it will be for you to move. You can have empty units on either side of you and the landlord is gonna say "Yup, market rents have gone up!" if the guy knows that you've put down roots and moving would be difficult.

The thing is, co-location, by it's very nature, is difficult to move, just like commercial real-estate. And if you say it's extra hard to move? well, I told one provider that it would be difficult for me to change IP addresses. Within a week (and this was about a month after I signed a 2 year contract /after/ feeling like they screwed me while I was on a month to month, thinking the contract would protect me.) bam. Suddenly I'm paying a buck fifty per month per IP address (that's a reasonable price for one IP. but I had 768. ouch.) Now, I don't know the whole story; they say their provider (the ones that actually own the IPs) started charging them and they are just passing that through, so who knows, but I certainly felt like I was getting screwed.

So yeah; a rational actor expects providers to screw him as much as possible, and does not expect contracts to mitigate that risk very much.

If there was a way to honestly signal that you were not going to do that, I think you could attract customers.

One possible way of doing this is charging all customers the same amount for the same services; If I did that in a way my customers could verify, they would know at least that I could not raise prices more than what the average customer would tolerate (e.g. the customers that make it obvious that it's hard for them to move would not get extra screwed, they'd be protected by the customers that could easily move.) which is something. This is what I'm trying first, but it's complicated by the fact that everyone is used to getting custom configs in co-location. Salesguys love custom configs, because it makes it harder for customers to compare prices.

Really, though, this is not a complete solution. I don't know of a complete solution yet. It is a hard problem.

(interestingly, REITs own most of the really big data centers, and they do a similar thing, only their charge per squarefoot is staggering. Like $60 per sqft. then you pay a (quite reasonable, really) fee for power and cooling on top of that. This is why you see people wanting those ridiculous blade setups where they use 20Kw in one goddamn rack. If you are going to charge me $60 per sqft, then reasonable prices for power, I'm going to want my money's worth.)

>Personally I feel you should move away from the hacker market and move more mainstream and raise your prices.

For the co-lo market, that's a reasonable thing to do... well, maybe even for Xen. I mean, supporting non-technical users is dramatically more effort than supporting users that can help themselves. It's completely fair to charge a large premium for that support. But, it's also a whole lot of work. oh boy. I've actually been talking about a product in this direction; targeting developers that did not want to be SysAdmins. The idea being that we'd constrain what packages they were allowed to install, (e.g. RHEL6/CentOS6 base/updates only) and define what we'd back up (e.g. we'd take nightly dumps of your MySQL or PostgreSQL databases) but we'd take backups, install updates, and generally insure the thing keeps running. I mean, that's still not non-technical users, but it is moving more of the work on my side of the line. I think I could do that well, but I need a lot more infrastructure and (not many, but a few) more people. It's lower on my priority list than my 'super shitty storage' project.

For the Xen market... I have been raising my prices. You raise your prices in the hosted services market by holding your prices the same. How long has it been since I increased the ram per dollar? a long time. Moore's law abides. And my bandwidth allocations are 'pretty good, for 2006'.

I'm working on upgrading my existing customers to twice the ram for the price; I'm starting with the customers that are on those expensive IP addresses (now, I started this... a long time ago, and some of them are angry because they've moved IPs and I haven't made good on my end of the bargain. I should not have made that promise until I had the move scripts ready to go. But it's happening. I'll be emailing two more servers that the move script is ready to go this week.)

But yeah, I /have/ been raising my prices, by keeping them the same. And really? it's worked out far better than I would expect so far; Apparently I have something of a reputation because I'm growing in spite of a recent crop of cheaper (and better automated) competitors that sprung up in the last year or two.