this post was submitted on 05 Jul 2023
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My t2.small instance on AWS runs me about $40/month when you factor in elastic IP, backup snapshots, traffic, bursting, etc. I haven't used DO before, so I don't know what kind of overheads they get beyond the raw instance compute costs, but even at $10/month you'd have paid for the server in less than 4 years, (and just 1 year at $40/mo), and you're getting a MUCH beefier server.
To run an XMPP server you don't really need a beefy instance. 2 gigs of RAM, one core, 2TB of transfer per month (which I've yet to even touch given how much I use that server), 50 gigs of storage locally, a static IPv4 address, IPv6 addresses if I want them, snapshots, and enough traffic that I don't think I've even noticed it on my invoices.
Sure, if they are only ever going to do text over XMPP, that's plenty. If they ever want to do more than that, VPS will mean more money, whereas a self-hosted server won't. Shared docs, video or music streaming, e-book library, etc will murder a small or medium instance on AWS if you've got 30 people using it at once. Music and video especially, obviously.
Co-ops generally want to minimize costs and outside reliance, and "scale up on hosted cloud stacks as-needed" is sort of the opposite of that philosophy.