It's all the birds. Up in the clouds. Cheep cheep cheep.
Ask HN: Why is cloud storage so cheep?
11–13 of 13 posts
Re: Ask HN: Why is cloud storage so cheep?
#12A huge part of it is the practice of overselling. The basic idea is that you have n customers who all want k gigabytes of space, but on average they each use only j gigabytes of the space. If that holds, then rather than having n k gigabytes available, you just need n (k/j) gigabytes to satsify their needs. After amortizing usage, the people who overbuy and barely use their space more than makes up for the users that…
Pretty much nails it on the head. Overselling is a large part of online services overall, like web hosting.
You think HostGator can actually give you unlimited disk space for a few dollars a month? People don't use anywhere even remotely near their quotas, but it's a compelling marketing/sales tactic for sure.
Re: Ask HN: Why is cloud storage so cheep?
#13A huge part of it is the practice of overselling. The basic idea is that you have n customers who all want k gigabytes of space, but on average they each use only j gigabytes of the space. If that holds, then rather than having n k gigabytes available, you just need n (k/j) gigabytes to satsify their needs. After amortizing usage, the people who overbuy and barely use their space more than makes up for the users that…
Like banks do with money, they have an X capital and lend (or buy bonds) for 10000X. Only difference is if Dropbox fails, the tax payer isn't gonna pay the mess indirectly... He will lose the data.