Seems high compared to the cost of a comparable EC2 node. Of course - you avoid the administrative costs. But it's pretty expensive for an early-stage startup. Possibly a good deal for a larger company, but at that point you might prefer to just configure the EC2 nodes, backups, etc. yourself and save a good bit of $ every month.
On the other hand, $200 is a common price for two hours of Rails consulting these days. So as a developer bootstrapping a product, I'd rather pay for this and sleep well (one of their bullet point).
I'd be curious to know how reliable it is in practice, compared to a home-grown EC2 setup.
Plus if you need a larger instance like a 7.5GB RAM instance, it's $800/month on Heroku vs $75/month for a reserved EC2 instance with comparable RAM. That's an astounding difference in price for cloud storage!
Of course, the real competition is other data-storage services like Amazon RDS, MongoHQ, MongoLab, etc. (all much cheaper)
(OK, so I excluded EBS costs from my EC2 comparison above but at $0.10/GB-month it's still going to be a huge difference for most cases)
It's more like 162 bucks a month for a comparable reserved EC2 instance. And 208 a month for a comparable reserved RDS instance. And that's of course with a 12 month commitment.
You can't really compare EC2 to an offering like this because you're paying for the amount of time / labor costs it frees up. And of course RDS doesn't support Postgres so there's not a lot of competition at the moment.
