I don’t believe it is. I think it is genuinely a poll of opinion.
BUT it has to happen
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A little late to the party but still, here is my take on the proposal:
Storj is not embracing its strengths. It’s not storage itself. You will never be able to compete here with the highly optimized competitors with just the “do not buy hardware” mantra. This is not scalable and unreliable if it’s just a hobby for the every day Joe, specifically if they basically don’t get paid to have a relevant passive income after the adjustment ($1 per TB).
Your strength is the army of node operators that has more or less no traffic costs combined with the built in hot storage and global distribution. This makes it perfect for fire and forget data like live broadcasting or world wide software distribution (e.g. the new fortnite season update that everybody downloaded at the same time, also side question: is this done the traditional centralized way or is this some kind of torrent technique, this must be a crazy amount of data).
My proposal:
- Keep or even increase the storage to $2, compensate the ones who are willing to monitor and run nodes 24/7 accordingly
- Slash the egress price to $1 and charge $2 for the customers, make egress your unique selling point and your core business no one can compete with! Find ways to overcome the S3 dilemma by making uplink usage more appealing
- Pay way less for repair costs ($0.50)
Other thoughts:
Because there is a difference for what purpose customers upload data to the network this should be reflected in the protocol, e.g. if a file is marked as hot by the customer because he’s expecting high temporarily download rates (promotion, new releases etc) it could be distributed in a way that is more performant for storj and the customer (a requirement for hot flag could be to set expiration to max 7 days).
A hot file could be distributed to anyone including the everyday joe that might not be online all the time with a higher replication factor. After a while it would be deleted anyway. A normal file would be distributed to high quality nodes only with lower factor because we know they are reliable and get paid for what they do.
Thanks!
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We appreciate everyone providing this detailed feedback and suggestions on what they’d like to see instead of the current proposal. Everyone taking the time out of their day to provide insights into what they feel is fair and what isn’t is useful and is being discussed internally at Storj Labs.
I have seen a lot of proposals to raise prices. Right now, this is very unlikely. The customers would leave the platform. Once you remove the test data, and the customers leave, there is no data for SNO’s.
There may be other ways to cut costs, or to create packages that sell at a different price point. I know, for instance, that many services charge for support contracts when big companies want a level of support that is 24/7 365. This kind of an add-on would potentially generate additional revenue for Storj and could help offset earnings to SNO’s. Creatively, there may be other value added services that could be offered.
But a blanket price increase, not likely.
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Add an extra price to use the centralized services - linkshare and gateway to cover their costs. Anyone can use uplink or local gateway for the regular price, but if they want the convenience of the data going through your (I assume more expensive bandwidth) services they get to pay more.
Right now, the customer has no real incentive to use uplink or whatever. I guess the bandwidth/compute costs for the gateway are high enough that even if SNO storage/bandwidth was completely free, there would still be not enough money to pay for them at the current prices the customers pay.
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i think 2/3 of customer payouts going to SNOs could be perfectly reasonable… even if it isn’t in todays world… but we are negotiation the future distribution of the wealth that Storj DCS might bring in…
ofc i don’t really have enough information nor voice to accept such a deal on behalf of the other SNOs, but the numbers just barely makes sense for most of us…
i have been buying only 18TB HDD’s to supply my storage requirements for over a year, so i’m not to worried…
I want StorjLabs to succeed for their sake and mine…
worst case i just end up running one node, which i will no doubt neglect.
it will have limited earnings and thus why would i care much…
but i rather keep running more nodes, even if their earnings aren’t amazing…
storage is always in demand… the only issue is if one can deliver it at the prices the customer want…
the internet is still growing at speeds that, is near incomparable to almost anything else in history… storage is a market of the future, the only question is who will own and control that market…
the numbers on the expansion of the internet is clear… storage is a vital and profitable business of the future, the only question is, who will be the new amazon, microsoft or facebook of the coming era.
StorjLabs has a chance to be amongst greatness, if executed correctly.
I have more questions than answers, what do i know…
divide and conquer always seems to work well… 
i will leave it at that before, i digress into gebberish… 
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All SNOs should be inform by email of this proposal and any chamges of terms and conditions, including payouts.
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We can’t move customer prices upwards, that’s pretty clear. And, obviously, this also means we cannot selectively increase prices for customers using the edge services. Yet it would be nice to have some better incentive for customers to use uplink, as opposed to edge services.
Let’s consider the egress price of 7 USD/TB:
- For transfers through uplink, there is one component that needs to be covered by this price: our revenue (SNOs + Storj Inc. together).
- For transfers through the edge services, there are two components: our revenue and the bandwidth cost of the edge service.
It was stated above that the second case covers 95% of traffic, yet is less desirable for us. But it’s more desirable by customers so much that it sidesteps the promise of lower latency and end-to-end encryption when downloading directly from SNOs.
So far discussions also proposed only customer prices to stay the same or go upwards. But that can be also reconsidered? For example, let’s split the edge services bandwidth cost between Storj Inc., the customer, and SNOs.
- Given the incentive, more customers would spend time to integrate their custom software with libuplink, as they’d pay less for this type of traffic. It probably doesn’t have to be a big price reduction seeing how being just slightly cheaper than B2 already attracts customers.
- Storj Inc. would also have better incentive to work on uplink integrations with popular software, as they’d be getting more money from customers directly using uplink. Great for marketing too: you’d be reducing prices! (with some strings attached)
- For SNOs this would mean more traffic directly from customers, making locations away from satellites more desirable (sorry folks with data centers in your backyards ;-)). Also, as SNOs would be a part of this split (i.e. getting more revenue from direct uplink downloads), that would reduce the risk for Storj Inc. coming from setting up a fixed value for SNO revenue as a balance between uplink-generated and edge service-generated traffic.
So, a question to everyone (both SNOs and Storj Inc.): would you consider a proposal with two different revenue schemes for uplink-generated egress and from edge services under promise that Storj Inc. would put more effort into promoting the direct usage of uplink?
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And practically unlimited throughput scaling on large transfers. You could basically saturate any connection no matter how fast if you have enough data to transfer and the CPU to support the encryption/decryption on native integrations.
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There is a bit of a skewed perspective on that right now as a lot of old data is now test data. I think that difference is a lot smaller if you only look at customer data.
Compared to having to retool your entire software, just setting up the gateway is really simple. Did it myself a few times for some testing. Might take you half an hour the first time.
You can also host it on prem. And there are light weight VPS’s that don’t charge for bandwidth. Depending on your requirements this can be done for a total cost of a few dollars per month.
You’d lose download races and earn significantly less money on egress. So yes, you’d be penalized.
It doesn’t. You seem to have a constructive attitude and some ideas may work, others may not. But it never hurts to share. It’s been a weekend with a lot of ideas being shared and hopefully next week we’ll see some response to those ideas. I think this thread must have been quite eye opening. So we’ll see how this goes.
Source?
I appreciate you clarifying this. Hopefully this will narrow the discussions a little. For what it’s worth, I agree with this assessment right now. This is not the best time for customer price increases. However, I hope reasonable changes to charge extra for edge services, possibly combined with a small price cut for native implementations are still being considered as the customer pricing model now incentivises customers to use the most expansive options to run for Storj Labs.
I would. If this is the cheaper option for everyone involved, we all have an incentive to move towards it. So if Storj would make this cheaper for customers, I’m willing to take a bigger decrease on the egress traffic pay for edge services cases. Though there would have to be a big enough price incentive for customers to move to native integrations or self hosted gateway.
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So why not run the Storj Edge services there? (I know you cannot run it on one light VPS don’t worry, but you get the direction of my question right?)
Where are these hosted today and how much does bandwidth really cost for them? We recently saw that they needed to be scaled because of demand so it sounds like they would be running on some other cloud provider. Maybe even AWS or Google? I can’t tell.
But maybe there are other options to simply run these services at a lower cost somewhere else?
Well there’s a big difference between having to serve all customers or just one. Additionally the gateway MT and other Storj hosted edge services are highly available and multiregion by default. That’s not easy to replicate on VPS’s. I believe most of the satellite and related infra is hosted on GCP, but they’ve made an exception for repair workers already and I’m not entirely sure that’s where edge services are hosted. As for egress costs, I really hope there are significant volume discounts in place and they are not just paying the sky high standard GCP egress prices. But I simply don’t know. I hope they can share more info with us on that.
Yes I know that. But maybe Storj needs to look into other ways of operation for those.
Remember what Netflix did? They put their cache servers into data servers of like every ISP, to be able to serve their customers at fast speeds without latency.
Maybe Storj needs to start own (own or rented) servers in various data centers which are cheaper than Google and pay significantly less.
I strongly disagree here. Due to inflation prices are going up everywhere. There haven’t been better times to justify a price increase. And I don’t believe a thoughtful slight price increase to Backblaze level ($5/$9-10) would scare away many customers.
Probably more customers are scared off by the lack of certification (HIPAA, GDPR etc.).
I think it is also worth to note that generally the price is not the most important factor for serious enterprises. If it was, Google, Azure and AWS would not have any customers. Price stability in the long term so that a company can adapt to it is often much more important and of course the right package that fits the enterprises needs.
I like for example what @Knowledge has said:
I had hinted something similar when I suggested to integrate Calendly into the website and turn it into an additional revenue stream.
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I have thought of something like that too. The problem with it is, that if it’s true, that the gateway makes 95% of traffic, then it is like complete adoption of the new proposal. The remaining 5% are basically nothing.
And it does not change the general failure in the economics of current operation. If payout for uplink traffic remains the same, Storj still receives $4/$7 from their customers while paying $1,5/$20 to their SNOs.
So if there are different schemes, still it would require a significant slash and adds lots of additional overhead and again uncertainty to the SNOs.
True, but not everyone knows that. Especially in companies where to many people are doing one persons job… which is like… most big companies. It just makes it sound a little more complicated to anyone who doesn’t know better. The fact that it’s not really difficult though is a huge plus!
Also a huge plus, however many companies have moved to cloud services in order to get away from managing their own equipment. Although a big enough savings would incentivize this.
Also true… but most of them still have fair use policies. And if they don’t, your connection is usually limited to 10, 25, 50, or maybe 100mbps which isn’t nearly enough.
Good… so we don’t have to worry about people hosting PB’s of data and downgrading to a dial up connection. Got it! To take that a step further though, in case someone still did try it, nodes can just be disqualified for consistently loosing races beyond a certain threshold over a set amount of time.
2 Likes
Here’s a counter proposal.
Keep current pricing model for existing customers, they’re grandfathered in.
Ditch your current charity tier and turn it into a 1 - 3 month free trial.
Lower expansion factor from 2.8 to 2.5.
Create 2 tiers:
Tire 1 (Low BW) - $4/TB & $12 egress. SNO’s get $1.50/TB + egress. Storj get’s $.25/TB.
Tier 2 (High BW) - $10/TB & $2 egress. SNO’s get $3.50/TB + egress. Storj get’s $1.25/TB.
Use cases based on 1 TB of data:
Low bandwidth - 0% to 60% egress per month:
Storj T1: $4.00 to $11.20 Best option.
Storj T2: $10.00 to $11.20
AWS S3: $23.00 to $71.00
Customers save 82.6% to 84.2% compared to AWS S3.
SNOs earn $2.70 to $8.70/TB. (Low end based on 10% egress.)
High bandwidth - 60% to 1000%(+) egress per month:
Storj T1: $11.20 to $124(+)
Storj T2: $11.20 to $30(+) Best option.
AWS S3: $71.00 to $823(+)
Customers save 84.2% to 96.3%(+) compared to AWS S3.
SNOs earn $4.70 to $23.50(+)/TB.
In order to earn even the lowest rate per TB at $2.70 using the high end of what’s been proposed, current egress would have to increase by a factor of 3.4.
Anyone choosing to use Storj’s S3 gateway should of course have to cover those costs as well essentially paying for the convenience factor, however the savings should be enough incentive for customers to run their own gateway.
Now I assume the two tiers would have to operate on separate satellites, so I know the first thing people are going to say is that everyone will just exit the tier 1 sat. Well guess what… right now you wouldn’t make anything anyway. Worst case though, Storj simply makes it so you can’t exit the tier 1 sats without exiting both. Problem solved, go away.
So…
This prevents current customers from leaving.
It pays SNOs decent.
It eliminates Storj subsidizing SNOs.
It starts generating income for Storj.
It still doesn’t discourage lower bandwidth customers.
But most of all it further creates a HUGE incentive for really high bandwidth customers.
Let’s take software distribution for example… how about the gaming industry.
Well use the game ARK which I know is well over 100 GB, but well just call it 100 GB.
They sold 5.5 million copies. So it was downloaded at least 5.5 million times.
That’s over 550 PB worth of bandwidth for a single 100 GB piece of software.
As @IsThisOn pointed out, this type of distribution is typically done using CDN cache. Well… the lowest price I’ve found between Amazon, Google and Azure (links a couple posts down) for CDN cache egress bandwith is $0.02/GB. Tier 2 pricing puts egress at $0.002/GB which is 90% less. And since Storj is already globally distributed, I suppose certain customers could even ditch their CDN cache. Hey, another selling point! Now I assume some amount of data must be cached automatically by service providers or something to some extent, but when you have to pay this much to these companies specifically for this type of service I can’t imagine it’s done for free, at least at that level. I don’t know that much about such things so maybe I’m wrong here?
Now for Storj:
Just for arguments sake, if all current customer data was on the tier 1 plan Storj would no longer have to subsidize SNOs and would already be bringing in $57,300/yr from stored data. Not too impressive yet, but 19.1 PB isn’t that impressive either.
Once they hit their first exebyte though (they’re already almost 2% of the way there), they would earn a minimum of $3,145,728/yr just from stored data if all the data was only on tier 1. That same exebyte on tier 2 would make them $15,728,640/yr. And none of that even accounts for other forms of income they may have.
Your not going to sell customers on Storj by promoting end to end encryption, “great SLA’s” or the fact that the data is nuclear war proof, and the crazy low prices are just going to raise questions as to how and why? And let’s face it, telling a bunch of business professionals it’s because their data is hosted on a bunch of morons gaming machines isn’t the best approach to this. It’s inexpensive because this unique way of distributing data in a secure and encrypted manner opens up a ton of otherwise idle bandwidth to Storj from all over the world, which just so happens to have the added benefit of being both highly available as well as highly immune to service interruptions not achievable by ANY of todays datacenters… would be a much better answer.
Storj has one huge selling point over it’s competition… lots of otherwise idle bandwidth that allows for dirt cheap egress and fast connections. Use it! And stop freaking out about a little price increase, your product is more than worth it.
8 Likes
Oh shit, I forgot this is racist now, lol. To bad.
Took me a while to read all those messages that piled up during the 4 days.
TLDR:
1.5$ Tbm
3-5$ Egress + Repair
Location: Germany
Electricity Price: ~0.33€
I personally could live with the slashing of egress. I already have Storj egress handled with a low priority as to not get in the way of my more important upload. So Storj only uses what is available anyways. A bit of incentive will be needed to not fully block egress traffic but other than that I am okay with reduction here.
Storage costs are something else though. The 1.5$ currently offered were around the amount i felt comfortable using disks to fill with Storj especially due to the added high payout in egress. As said in other comments you cant really easily reduce the size so it’s not really possible to use space you “currently don’t need” as once it’s full of Storj data you gotta keep it for a while. Especially with the slashing of egress these 1.50 now will have to be the backbone of my earnings. So a reduction here would really hurt.
At the current maximum proposed price of 1$ i would have to think strongly about ever increasing my node size and might just continue to keep what i have and just GE each node once i need the space. (I would really appreciate a way to reduce size by just sending my parts into the network and having them be redistributed to other nodes sorta like a GE for a small amount of data without getting any payment for it but also not loosing my node)
I think if Storj really wants to scale it should at least be economically viable to buy storage and make a ROI. I find the mantra of only doing it if you already have a server that’s running 24/7 fine. That way we only have to look at electricity cost and purchase price of the HDDs.
How to do it financially for Storj:
I think Storj needs to increase price per TB by at least 1$ on the customer side to be able to continue to pay the 1.5$. customers already onboarded or in talks can have the old price for now but i think new customers should get a slightly higher price.
Lots of other good ideas where posted but this thread is already very long so I’ll not go into depth about them ^^
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Why would their gateway cost 10k/mo?
Oh I’m sorry, I didn’t realize all that CDN bandwidth is free.
You don’t download from Storj from a single server ether, so this could essentially eliminate the need for cache in certain cases.
Show me where CDN cache pricing can beat Storj on either of the 2 tiers I proposed.
I’m not an expert in this area so maybe I’m totally missing something here, but I don’t see a price per GB lower than $.02. Now I’m sure it can get a little better with larger packages, but can they compete with Storj?
Cheapest CDN I see: $0.02/GB
Storj T1: $0.012/GB (40% cheaper)
Storj T2: $0.002/GB (90% cheaper)
So I suppose that’s actually another selling point for Storj. For certain use cases theres no longer a need for a CDN cache, and the bandwidth is actually still cheaper on either tier. Again… unless I’m completely missing something.
