too good to be true?

I have been using Dreamhost ($10/month) for over 8 years. Still with them. Ten days back I sign-ed up for Linode-512 and I am quite impressed. I don’t mind paying 20 bucks a month for VPS — 24GB disk and 1TB transfer meets my needs but I prefer 1GB of RAM. Then I heard about DigitalOcean and signed up for it yesterday to check them out. While not as polished as Linode — which is to be expected — I found it quite good. I could do a side-by-side comparison of running nginx, php-fpm, https etc and the 1 core of DigitalOcean was not limiting. I have the option of trying the 1GB and 2GB plans (2 cores), pay for what I use, and still pay the same or less than what I would pay for Linode.

So, what is the problem? The problem is that it is too good to be true. DigitalOcean must be losing money at these prices and what happens when the seed money runs out say in 6 or 8 months? $1.25 per week wouldn’t probably pay even the power bill. Lots of money will be required to expand beyond NY and Amsterdam. Linode would typically give free upgrades every June and if they upgrade the RAM to 1 GB and make backups free then it would make Linode look quite good. Linode has been around for 8 years, they may charge more but the probability of them being around a year or more from now is almost 100%. My worry is that if DigitalOcean folds without warning a year from now and doesn’t give option to copy your data it would be a problem. So we have to have frequent backup outside of DigitalOcean to account for this.

Linode is putting forty 512M nodes on a server. Is DigitalOcean putting 160 nodes?

Babu