Longterm business viability of storj

I think it has already started with the change in payouts.

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@snorkel we just announced a way to enable data center operators and large scale providers to participate without outcompeting the individual operators.

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Congratulations on timing!

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I always suspected that Storj will not rule out the joining of datacenters and they will somehow embrace them in a way. For now, this implementation seems beneficial for everyone. Butā€¦ I have some fears. Letā€™s wait and see what the future brings, and if we are still in the game after a few years.

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Corporate world is always trying to find ways to save money.
Commercial nodes will be a nice Storj onramp for corporate data, but once theyā€™ll realize they can get the same or maybe slightly lower performance storing their data on standard nodes, and people making the decisions will be incentivised enough (they always are) to find a way, they will switch to a cheaper option.
This also can be a good advertisement, where smaller customers looking for cheap storage will follow big players, but will be joining the standard nodes instead as they wonā€™t need the certifications.

Edit: so it looks like the SNO rates will be lower in the commercial segment, not sure about customer pricing yet.

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But technically how does it work?
if those big clients are already storing PBs of data and suddenly decide not to pay the premium.
Do they flip a switch in the satellite dashboard and de data is automatically evicted to normal SNOs ?
Do they need to re-upload all the data?

If the later, I think it will not happen.

Storj might move it for them. If you are a big customer, undoable things are suddenly doable.
The question now however is, why would Storj store any data on standard nodes if the enterprise ones will have lower SNO rates.

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indeed, coupled with higher prices, therefore higher profits.
let see what they have to say.

Indeed, the most comfortable way would be to do it internally.
From what I understand is that the customer can decide on bucket level if he requires certain compliance by nodes: Release-v1.86 Test SOC2 repair vs non SOC2 repair Ā· Issue #6185 Ā· storj/storj Ā· GitHub
So if the customer would move data from SOC2 bucket to Non-SOC2 bucket like with server side copy or something, that could be the way. Downloading and Uploading should not be the requirement because I donā€™t think it will happen. In either way, public or commercial node operators will not be delighted if customers will start to move PBs of data between the different networks.

Interesting one. At least the customer has his say as long as he pays different prices. But you are right. In fact, Storj could simply lower the price to customer and still have the pieces being stored on the cheaper commercial node. In a way it is hard to believe that Storj would move to a more costly node when a customer wants to pay less.

Well, canā€™t say I didnā€™t see that comingā€¦ was kinda hoping I was wrong though. Guess the solution to whales and Russia is f*** all of us. It is hard to imagine though that datacenters would even be interested in running Storj nodesā€¦ of course Iā€™m sure they wonā€™t have to manage hundreds of them. But if they think all the nodes in datacenters right now are actually in those datacenters theyā€™re going to be sorely mistaken. They have to know that though. But if this is attractive enough to datacenters now, hahaā€¦ weā€™re done. Small individual SNOs will be a thing of the past far sooner than I ever imagined. I do believe I mentioned something like this happening back during the initial payout proposal. Canā€™t say Iā€™m surprised.

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Those are different layers. Not everyone customer needs SOC2 compliance, especially if they will be forced to pay premium for that. So, I do not think it could be the end of a normal supply, the entry level is also lower.

These layers have been suggested a long time ago by the Community:

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But if Storj pays less to commercial node operators they donā€™t have to charge more.
In theory they could charge the same like for the public network but paying less.
So basically it is an incentive for Storj not to use the public Storj DCS as storage.

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It literally says these commercial operators will make less from running Storjā€¦ which makes sense due to their scale and efficiencyā€¦ but that means Storj has these nodes that cost this much, and those nodes that cost lessā€¦ once thereā€™s enough storage available in enough datacenters, we are of no further use to Storj, plain and simple! Thatā€™s just business.

I donā€™t remember where exactly, but I do remember posting about this a while backā€¦ about Storj doing exactly this and pushing us all out. Letā€™s face itā€¦ based on where they need to be with their pricing model, larger scale datacenters are the only way to go. Like Iā€™ve also said, why do you think theyā€™ve never actually gotten rid of whales? We are just a stepping stone, plain and simple. And the fact that they put the offer out there for larger operators to become commercial operators is just insulting. ā€œHey, were phasing yaā€™ll out, but if you happen to have a facility with this certification by all means!ā€ Which of course we donā€™t have, and isnā€™t worth trying to get just for Storj, so that pretty much takes us out of the equation.

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Storj said a long time ago they were looking at a mechanism to get some node operators certified to certain standardsā€¦
This isnā€™t new. Like it or not for big business compliance certifications matter. This is a means to achieve that for those businesses.
I have worked at an MSP for the last 4 years and we are seeing a marked increase even in small business seeking information on compliance standards. Heck, just to receive some Cisco gear overseas I had to sign compliance documents. We knew that when payment rates were going to be reduced that average node sizes (or at least total amount shared) would need to increase to compensate. Again, I am seeing no shocks here at all.

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Oh I donā€™t doubt that. Just making the point that our time is quickly coming to an end.

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Why not charge more for more legislation work? Whatā€™s benefit doing more and get less profit?

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The potential demand for storage cannot be covered by SOC2-compliance nodes. So there is always will be a demand for a normal supply. It will balance itself.

We cannot turn out all Operators to do a lot of paperwork (and build hardware accordingly) to become a SOC2-compliance, and the power of Storj is that anyone can join.

Yes, we saw these predictions since beginning (2014), and there we are. So, only time (and market) will show.
At the moment I do not see a reason to shutdown a public network in a favor of private/limited/paper secured (which by design is smaller). More like we (SNO) may shift to become a SOC2-compliance if there would be a higher demand.

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They can charge more of course, but they donā€™t have to as they are paying less. So even when charging the same like for the ā€˜worseā€™ public network Storj will make higher profit when storing pieces on the commercial network. And thatā€™s an incentive to do so.
Even if a customer does not require all those regulatory compliances, it would be beneficial for Storj to store their data on the commercial network even with the lower prices from the public network.

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The public network is not worse, it doesnā€™t have a specific certification thus cheaper for the customer, but it has better availability, distribution and free space.
So every customer will decide for themselves.

Why do you always think that be a SOC2-compliance is free? It costs a lot, Iā€™m sure the difference is barely enough to cover it.

SOC2 would probably run between 30 to 50K and requires things even large SNOs simply arenā€™t going to have unless they are literally a legit datacenter already. And simply colocating a server in a certified datacenter isnā€™t the same thing, not to mention that is pretty cost prohibitive by itself. Basically, if enough datacenters are interested and run Stroj, weā€™re out. If not then maybe we have a fighting chanceā€¦ but donā€™t expect even the whales here to ever become SOC2 compliant. And yes, once thereā€™s enough datacenters running Storj to both cover their demand and be distributed enough, thereā€™s no need for us. Simple economics. And the fact that they are literally advertising that this would cost them less is nothing more than blatantly saying if the commercial operator venture is successful, weā€™re all shit out of luck. I meanā€¦ most people are here hoping Storj grows enough for everybody to at least make something a little more meaningfulā€¦ or something at all, but datacenters can sell storage so cheap even the whales most likely wonā€™t be able to compete. I donā€™t blame them, itā€™s just business. Itā€™s just disappointing.