To date we have not talked much about how Reasonably Smart will generate revenue. This post is an overview of what our revenue model will look like once the billing engine is turned on.
Reasonably Smart plans to employ a utility model for the use of its platform. We will be charging users of the platform for the consumption of server cycles, storage and bandwidth. Our pricing for Storage and Bandwidth will be competitive with what is being provided through Amazon's EC2 and S3 offering.
Where Reasonably Smart differentiates significantly from most of the Platform as a Service and Hhardware Cloud providers is in how we are charging for processing or what we call server cycles. Here we will be charging at the micro-unit level so the user of the platform literally only pays for what they use.
We have completed some testing that demonstrated that a typical directory web site that receives 20K hits per month would cost the operator between $5 and $6 per month. Keep in mind that this testing was done on a $20/month box located at Slicehost that has not been optimized in anyway.
One area where this model provides benefit is during development of an application or a website. Because the developer does their coding in their own environment he or she will not incur any costs until they push the code back to the platform to execute their tests or run their application. We anticipate that this will save those who do a significant amount of prototyping a great deal of money.
This model will also save the small website owner (the hardware store, etc.) money. If they only get a few 100 hits per month then instead of paying for the base package (like the $20 per month we are paying at Slicehost) they could end up paying pennies.
For the large applications or those that go viral the model provides linear cost predictability at the hit (URL) level. We anticipate that this will be a significant strategic advantage for our enterprise users.