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DigitalOcean Breaks the $5 Price Point

DigitalOceanDigitalOcean has announced new pricing starting July 1, 2022.  Notably, 1GB RAM VPSes will now be $6/mo.

$5/mo for 1GB has been a price point for a long, long time.  Linode, Vultr, and others have all moved in lock step with that pricing model, so it’ll be interesting to see if the rest of the industry follows suit.

Also interesting is the fact that pricing has been falling over time.  Either prices drop or you get more resource for your buck.   This marks a point where you’re paying more for the same resources.

At least two factors are weighing here.

First, global inflation is picking up, and with supply chain issues in IT, costs to operate a network of datacenters may be rising.

Second, IPv4 exhaustion has put pricing pressure on one of the essential components of selling a virtual server.

Interesting, DO threw a sop to subscribers by offering a new $4 VM which has 512MB.  You might think this would burn IPs fast for less profit, however if you read the announcement there is no promise of IPv4.  The $4 product may debut with IPv6-only, or with limited quantities per subscriber.


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