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High RAM servers - why so expensive?

29 points by FiReaNG3L ↗ HN
A few years ago, I could understand why a 16GB server was 800$ per month - RAM was crazy expensive, and the 16GB server would be worth much money; it made financial sense to pay that much per month.

Nowadays, RAM is getting cheaper by the month. If you don't need ECC RAM, 16GB is stupidly cheap. Even if you do, it's not as expensive as it used to be.

So can anyone explain to me why servers with a lot of RAM are still > 800$ per month? At that cost, I could pay for the whole server in ~ 2-3 months.

I understand that there management costs to the 800$ (replace hardware when it fails, data center related costs (power etc), pay for personel, etc) but it doesn't make sense - a 70$/mo 1GB server has the same requirements. Adding RAM to a box doesn't change anything in the equation, except the price of said RAM.

If someone knows of a business leasing dedicated servers with 8-16GB for a reasonable cost, please tell me!

45 comments

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invisible
I would suggest if you need a dedicated server then you should just buy one and find a cheap colo. I pay $200/month for a local company that has redundant power and almost 0% downtime with great fiber.

They charge that much because there's a demand for it and people will pay. Dedicated servers are a smaller market, so no one is eager to charge less than X amount for renting a server.

However, 8GB-16GB of RAM is a lot and also makes the motherboard a lot more expensive (and Windows slightly more if it's a Windows box, 64bit). If you can put together your own machine it doesn't need to be super expensive.

vaksel
except they charge you for the processor on top of the cost for RAM.

Probably a business opportunity here, sell high RAM machines at a smaller markup. You could probably sell a 96GB RAM server for half the cost, of what others charge and still make a hefty profit

tocomment
VPS hosting too! I'm still paying 20/mo for 360MB RAM just as I was almost two years ago. What's the deal with that?
lallysingh
.. you're getting ripped off? Can you change vendors?
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bretthoerner
My guess is lallysingh believes that tocomment is paying $20/month just for a RAM upgrade, and not for a full VPS that happens to have 360MB of RAM (he was unclear, but I assume he's on Linode like you). I can't think of a better deal at that cost.
vaksel
Email them and tell them to upgrade you. Most companies will do it, since they don't want to lose a customer like you who can overpay for 2 years w/o complaining.
tocomment
To clarify, the plan is 20/mo which include 360MB RAM. I'm just saying it's odd the plan hasn't gone done in price in 2 years.
wmf
It makes perfect sense if they are depreciating the hardware over more than two years.
tasaro
the price hasn't gone down in two years, but the resources have more than tripled. . .
tocomment
I think I signed up for 360MB two years ago at the same price. Have other resources increased? Bandwidth? CPU?

Don't get the wrong idea, I love the service, and the prices are still very competitive, it just seems strange in general that prices aren't falling faster. My own VPS experience is the only concrete example I have so that's why I mention it.

tasaro
2 years ago $19.95 got you 100MB RAM, 4GB disk, 50GB transfer and a slower technology/CPU. Now you get 360/12/200 with Xen and SMP -- http://tinyurl.com/7jvrx4
sam_in_nyc
You using Linode?
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lsc
eh, some are, some aren't. for $20/month, I give you a gig of ram. (I'm out of space until I get my new server in this evening, which tells me that my prices are low)
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vaksel
Because someone who needs a 16GB server, can afford it. And this way the company makes a ton of money for nothing.

But yeah its bullshit to ask for $400/month to upgrade 2GB to 16GB.

anotherjesse
At Softlayer 16GB is $350/mo more than 2GB, _but_ they almost always have a special double/double for the same price (double the HDDs and double the RAM). So I just bought a 16GB server for userscripts.org for the 8GB price ($150/mo).

http://www.softlayer.com/specials.html

FiReaNG3L
Now that sound like a good deal
bprater
I continue to hear really good things about SoftLayer. Sounds like they are doing something right.
tdavis
I've yet to find anything they're doing wrong. Honestly a truly amazing hosting company.
tlrobinson
On top of their specials, you can also negotiate better deals with them.
anotherjesse
You can but it helps to know their online offers.

About a year ago I spent many hours talking with a rep who came back with the same boxes and prices we could have configured with their online system.

Last week I spent a couple hours chatting with a rep for userscripts.org's new box and he did better than the online prices.

I think the difference last year I approached with general requirements, so they spent all their time speccing out multiple systems and figuring out what was the best fit. My second experience I knew what I wanted, so I was able to ask for deals based on specific hardware choices.

catch23
Why not just buy a machine and just colo it Softlayer? That way when you do need an additional 8GB, you can pay whatever the current price of 8GB is. These days you can build a 4 to 8 core machine with 16GB ecc memory for around $1500. Hardware is cheap these days... you should be putting most of the money into electricity & bandwidth.
anotherjesse
For me it is worth it not to have to deal with it.

For $529/mo I got:

  2x Intel Xeon-Clovertown 5320L-QuadCore [1.86GHz]
  4x Seagate Cheetah ST373455SS (10K SCSI drives)
  Hardware RAID controller
  16GB RAM
  2TB transfer per month.
  100Mbps uplink
  Peace of mind
Sure I could get everything but that last item for less. There is an inflection point where it is more economical to run my own hardware again but I'm not there. For a few hundred more than cost when issues occur a competent support person is helping me within minutes.

When (not if) there are issues with my servers, driving to a colo would eat my savings. When you have a hardware issue at softlayer they fix it. They don't have to wait for new hardware as they have a stock.

I'd rather be spending my time coding and working on features. Having your own non-mission colo-ed box is awesome, but the cases where dedicated leasing or AWS doesn't make sense are fewer and fewer for bootstrapers.

Note: userscripts.org is 3 years old. It ran on a colo-ed box for a year. Then a $200 serverbeach box. But it just outgrew that ( http://userscripts.org/articles/22-2008-overview for 2008 review with stats )

catch23
If you really want something that is peace-of-mind, you should just use something like rightscale.com. We have a giant ad server on there load balanced across 40 ec2 instances running perl code, seems to work well so far. Sometimes an instance will get fussy and we'll just create a new one from scratch by running scripts that essentially fetch everything needed from CPAN and installs, configures, and boots in one step. It's definitely a more expensive solution, but if you want peace of mind, that's probably the way to go.
DenisM
If you are a hoster you must differentiate your offering and charge more to some customers and less to others. Usually what they do is they add bigger markup to things which are expensive to provide becuase it's the high-end anyway, and smaller markup to the lower end where customers are more price-sensitive.

Now, sometimes landscape changes and things that were expensive to procure become cheap. Hosters however are stuck in the old model, and while they realize that RAM costs nothing anymore there are not many different candidates for price discrimination and the old thing still works, kind of.

In other words it's the same reason why Apple charges a lot of moeny for 4Gb RAM config in Macbooks - gotta make the money.

Raphael
I would guess they're cramming ever more people on to one box.
johnrob
I'd rather have 10 of the cheap boxes, at 70/mo, than one 16GB at 800/mo.
bjclark
Which will work for some things, but not say, a database server that needs 16gigs of in memory tables.
mtw
typically a server with 16Gb of RAM is powered by quad-processors intel xeon quad cores (7300 or 7400 series), or the equivalent AMDs. One 7400 processor is sold from $1200, so just the cost of processors is $4800 for the web hosting provider. Add to the accessories (which are not commodity), a 2U case (or 4U), and you've got at minimum $8000 server apiece.

so yes, RAM is cheap, but RAM is just a fractional cost. at $8000, a web hoster needs to compute in costs of stocks, loan costs, so $800/mo is a reasonable price.

if you're really low on budget and need 16Gb (I guess it's for virtualization ?), look for "7310 hosting" in google, and then boost the RAM to 16Gb. You should be able to find one at around $650

wmf
typically a server with 16Gb of RAM is powered by quad-processors intel xeon quad cores, or the equivalent AMDs.

That's a bad idea; you should probably run away from any host that wants to sell you such an inefficient configuration. 16GB is 8 2GB DIMMs; putting that in a 2-socket server is no problem. Even 16 2GB DIMMs should be no problem.

mtw
well yes, and no. i guess it depends on your needs and the applications you run on the server. if you do virtualization, a 2 socket server should be ok. I was thinking of HPC or datamining
lsc
there are many cheap quad and dual-core Xeons and Opterons. I use 1.9Ghz low-power quad-core Opterons, which cost around $256 each. You pay a large premium (in power or money or both) for the last few clock cycles. If you need more ram than CPU, which is usually the case for me, you can save quite a lot.
babul
If you can, why not buy your own servers and have it co-located. The hardware often pays for itself after a few months compared to leasing.
snewe
Rackspace 4gb --> 8gb = $100/month
timcederman
16GB of RAM is cheap to purchase if you're buying in 1GB or 2GB DIMMs, but try and buy 4GB DIMMs and it starts getting really expensive.

eg, $50 for 2x2GB vs $250 for 1x4GB.

wmf
But a decent motherboard has 16 slots, so 32GB or less should be cheap; it should only get expensive above that.
grandalf
Take slicehost or S3. To give you more RAM means that someone else has to need more CPU to make their virtualization strategy work. I think once Amazon got enough volume it could begin offering high CPU and high RAM instances without diminishing overall utilization efficiency.

But Amazon still charges quite a premium for high RAM.. probably b/c due to IO rate limits low RAM also results in less CPU burn for many workloads than would exist if there were plenty of memory available.

lsc
Most companies charge more because they can. the same reason why if you buy the base dell you get a really good deal, but if you load up the dell with ram you end up paying a lot more than if you bought the parts yourself. The idea is that most businesses want to charge people with money more.

I'll rent you a 32GB server for $512/month, if you want. I'll have an extra later today. dual quad-core opteron (1.9Ghz) with 32GB of registered ecc ddr2 and 2x1TB sata disks. It's one of those supermicro 1u twin dohickies. shoot me an email and arrange things. lsc@prgmr.com I can arrange for a serial console but no rebooter.

lsc
It's not quite as simple as just adding more ram to the single-socket box that you get when you order a dedi with 1G ram.

see, ram gets more expensive the higher density you go, 2gb modules are pretty cheap, 4gb modules are about twice as much per gigabyte, 8gb modules twice as much again, per gigabyte. (It's slightly more complicated... quad-rank ram, for instance, is basically a way of fitting more ram modules in the same number of slots. Most motherboards don't support it, and those that do don't support very many of them.)

If you can find a single-socket core2 or opteron board with more than 4 ram slots, let me know. this puts an 8GB limit on economical single-socket boxes.

dual-socket boxes, on the other hand, I can get supermicro dual-socket opteron boards with 16 ram slots.

Of course, you can get 1.9Ghz low-power quad-core opterons for around $256 each, so it's still not as expensive as people seem to think. I'm just saying you can't just cram more ram into the box they use when you order a 1GB box.

easp
A few things other people don't seem to be mentioning:

1. RAM prices can be quite volatile, while hosting prices generally are not. Hosts may have taken lower margins back when their RAM costs were higher that they are now trying to recoup. At the very least, they aren't in a hurry to cut prices right now because their costs could go back up again if the economy picks up and RAM prices head upward.

2. Hosting is basically a subscription business model. Subscriber acquisition costs are balanced against total lifetime value of the average subscriber. A host may take a lower margin, or even a loss, in the first stretch of a hosting relationship and treat that as part of the SAC in anticipation of their margins improve over time thanks to declining costs due Moore's law.