Hello,

While I'm not questioning the quality of service that RackShack provides, it's rather its marketing. While they only used to provide a cheap priced cobalt they have now expanded into Linux (Rackshack's Linux Servers (http://www.webhostingtalk.com/showthread.php?threadid=26934)) based servers for $99 / month.

While this is a great offer, it seems to me that Rackshack is really under selling the market. With that being done it makes it more difficult for small companies to compete.

I don't really know if anyone else shares this opinion but I guess that's just my two cents.

If they can sell stuff for that price and still make money, maybe the rest of the industry needs to take some lessons from them.

Whether or not their really making any money is very debateable, of course they say they will, but you do the math, if the servers cost them 600.00 (their obv. using very cheap parts, do you really want a server thats built on the cheapest part available) it takes them 6 month to recoup their initial investment on the hardware. Thats taking into affect that the setup fee covers their bandwidth costs for those 6 months as well, and thats unlikly so it could take longer then 6 months to recoup their initial investment. ANd then thats if they have 0 hardware failures, doenst take into account tech time, Plesk licensing costs, additional facility buildout costs to accomodate the new larger boxes, racks, tech time to buildout the facility and setup the boxes, and tech time to maintain the additional network and additional servers for things such as reboots, etc...

And of course after 6 months the initial investment made on the boxes is 0 because the boxes arent worth a whole lot after 6 months with the way technology is going.

Then you get to their network, of course they use more then just cogent, well anyone besides cogent aint cheap even with large pipes their paying over 150/meg. Your paying 99.00/meg so every time they sell a server their taking a hypothetical loss and their per meg investment is alot more then 150.00/meg when you figure in the fact that they have to have bandwidth sitting around for burstability, and have to have multiple providers for bgp, their actual costs per mbps really is higher then 300 figuring in network maint. as well as bgp, as well as burstability bandwidth sitting around. SO now they are taking a 150.00 loss every month on every server they sell. Now of course people argue not everyone is going to use all the bandwidth their allotted, this is very true. BUt quite a few will use over it, and again from what weve heard rackshack doesnt charge for overages.

Then you have to figure in the costs of staff which if you have any knowledge of running a business can be very very costly.

Now of course people will say well how their full duplex, and have tons of bandwidth just sitting around, well thats fine and dandy but the simple fact is if you have 100mbps full duplex and you push 100mbps in and any thing close to that out at the same time your going to run into HUGE collissions. IN addition their banking on the fact that their dialup customers stay strong, welp sorry to say the dialup markey is DRYING up, people are moving to broadband, not as fast as anticipated but its happening none the less. At that point they will be screwed.

So competitors can be VERY competitive, you have to differintiate yourself from people like rackshack, for instance the car market is very competitive. You can buy a hyundai for 12,000.00 with a long ass warranty, but you dont see BMW and Mercedes having any problems.

SOme key ways to differentiate yourself would be:

1. 24/7 support, from what i hear rackshack does not offer this.
2. Quality hardware, we for instance use only supermicro hardware now, while its very expensive its cream of the crop, all of our servers come standard with hot swap now, etc... White box, Yuck... :)
3. Staff, hire knowledgable staff who know the ins and outs of linux not ones who only know how to reboot a box.
4. Add in value added managed services
5. There are tons and tons of ways to outsell even people like rackshack.

We for instance have so many orders coming in weve had to hire on additional staff to accomodate them, havent seen rackshack make much of a difference at all in fact we seem to be increasing in the level of orders we recieve rather then decreasing. Same goes for my friends that our competitors such as Jay from pwebtech, their doing great from what i hear.

SO there you have it you dont have to sell on price alone, we would never ever go as low as rackshack, and will never have any trouble competing, you shouldnt either.

YOu just simply need to ask prospective customers whether they want to host with a company that has a proven business model, doesnt oversell, doesnt play the numbers games, and is 100% profitable since day 1 which if your small is usually the case..

Erm hrm heh, you beat me to it to a degree.... about all I can say is Amen, preach it Brother Charles!! :)

Charles is right, of course. There are all kinds of ways to compete, and nothing Rackshack is doing is anti-competitive. You could compare it to McDonald's versus the mom and pop hamburger stands. Some people won't eat at McDonald's at all, because the quality of their service is not as good as it is elsewhere, even though they may be cheaper than some other places. Those other places stick around because they have shown (and people know) that what they provide is worth the price.

DO I HEAR A AMEN! :) haha

AMEN!!!

Very nice... and all very true.

But... MOST people will start getting a lot more servers from RackShack.net now, even with all these things pointed out. People like deals, and they flock to them, and you can't beat this deal. Even those P3 733, 128MB ram, 20gb HDD, 100GB Bandwidth for $125/month doesn't even come close to the RackShack deal, and that was considered a bargain at the time, and nothings really gotten cheaper since besides slight hardware decreases.

Truth of the matter is... if they keep a lot of these in stock, everyone else will now lose business to them, because it is such a great deal, and very hard to pass up. What would be your normal charge for all of this, on a good quality server?

Hardware, plesk, 300GB bandwidth. That's at LEAST $600/month in a most places. (compare that to not as good hardware, and $99/month, 90% of people would go

I really don't like it, but hopefully they will stay out of stock some of the time, and this deal will probably have to go away when too many people use their bandwidht, and it starts to catch up with them.

Well, but you have to remember, not all, but most of those people flocking to such deals are not going to be the users who know a lot about what their doing, thus rackshack will see a major influx and increase in "how do i do this" or "i broke that" or "i tried to upgrade this and this happened" type of support, which requires manpower, which their going to have a hard-time paying for. Its ill-advised to base one business modles monthly operating revenue on another (their dialup customers)

Originally posted by cbaker17
Whether or not their really making any money is very debateable, of course they say they will, but you do the math, if the servers cost them 600.00 (their obv. using very cheap parts, do you really want a server thats built on the cheapest part available) it takes them 6 month to recoup their initial investment on the hardware. Thats taking into affect that the setup fee covers their bandwidth costs for those 6 months as well, and thats unlikly so it could take longer then 6 months to recoup their initial investment. ANd then thats if they have 0 hardware failures, doenst take into account tech time, Plesk licensing costs, additional facility buildout costs to accomodate the new larger boxes, racks, tech time to buildout the facility and setup the boxes, and tech time to maintain the additional network and additional servers for things such as reboots, etc...

And of course after 6 months the initial investment made on the boxes is 0 because the boxes arent worth a whole lot after 6 months with the way technology is going.

Then you get to their network, of course they use more then just cogent, well anyone besides cogent aint cheap even with large pipes their paying over 150/meg. Your paying 99.00/meg so every time they sell a server their taking a hypothetical loss and their per meg investment is alot more then 150.00/meg when you figure in the fact that they have to have bandwidth sitting around for burstability, and have to have multiple providers for bgp, their actual costs per mbps really is higher then 300 figuring in network maint. as well as bgp, as well as burstability bandwidth sitting around. SO now they are taking a 150.00 loss every month on every server they sell. Now of course people argue not everyone is going to use all the bandwidth their allotted, this is very true. BUt quite a few will use over it, and again from what weve heard rackshack doesnt charge for overages.

Then you have to figure in the costs of staff which if you have any knowledge of running a business can be very very costly.

Now of course people will say well how their full duplex, and have tons of bandwidth just sitting around, well thats fine and dandy but the simple fact is if you have 100mbps full duplex and you push 100mbps in and any thing close to that out at the same time your going to run into HUGE collissions. IN addition their banking on the fact that their dialup customers stay strong, welp sorry to say the dialup markey is DRYING up, people are moving to broadband, not as fast as anticipated but its happening none the less. At that point they will be screwed.

So competitors can be VERY competitive, you have to differintiate yourself from people like rackshack, for instance the car market is very competitive. You can buy a hyundai for 12,000.00 with a long ass warranty, but you dont see BMW and Mercedes having any problems.

SOme key ways to differentiate yourself would be:

1. 24/7 support, from what i hear rackshack does not offer this.
2. Quality hardware, we for instance use only supermicro hardware now, while its very expensive its cream of the crop, all of our servers come standard with hot swap now, etc... White box, Yuck... :)
3. Staff, hire knowledgable staff who know the ins and outs of linux not ones who only know how to reboot a box.
4. Add in value added managed services
5. There are tons and tons of ways to outsell even people like rackshack.

We for instance have so many orders coming in weve had to hire on additional staff to accomodate them, havent seen rackshack make much of a difference at all in fact we seem to be increasing in the level of orders we recieve rather then decreasing. Same goes for my friends that our competitors such as Jay from pwebtech, their doing great from what i hear.

SO there you have it you dont have to sell on price alone, we would never ever go as low as rackshack, and will never have any trouble competing, you shouldnt either.

YOu just simply need to ask prospective customers whether they want to host with a company that has a proven business model, doesnt oversell, doesnt play the numbers games, and is 100% profitable since day 1 which if your small is usually the case..

All valid points Charles, although the setup fee will go towards the cost of the server, so it may not take them 6 months to recoup the cost of it... but yes, I think they are going on the major presumptation that the majority of their dedicated customers will not use the full 300Gb allowance.

Regards
Matt

Well if you put the setup fee towards the cost of the hardware then you have to factor in the cost of the bandwidth for the next 6 months, either way you look at it, it will take at least 6 months if not more to recoup the investment.

One more thing you have to look at, is that mostly novice users are going to go after this deal, NOvice users dont have the slightest idea on what they need to do to keep their boxes safe from hackers, etc.. and even if they did its unlikly they would know how to apply the patches, hence, rackshacks network could potentially be filled with boxes just waiting to be exploited, which means a couple of DOS attacks, compromised boxes, etc... means it would be fairly easy to bring their whole network to their knees.

Also, another thing, with rackshack offering this type of bandwidth how are they switching their network?

Consider this. from a technical standpoint a switch with a single 100mbps uplink can only handle 1/2 of that traffic before you run into packet collisions. So how they switch the network is very important, granted with a 24 port switch if everyone used 100% of their allotment it would be @ 24mbps and shouldn't be a problem, but i do remember someone talking about their 10mbps port deal a while back, so the switches uplinks play a more important role when offering larger connections such as the 10mbps rather than the 1mbps that they are offering in their $99 dollar deal, but never the less it is an important issue when looking at the technical side of things..

Aloha
well Saturn cars are cheaper than Porsche or Mercedes ???
does saturn hurt there sales ??
NO !!
Why they are going after a dif crowd

more power to them that is what I say
competition is good for any industry.

Charles brought up good points " AMEN FOR YA BROTHER"

Get-Hosted
I have to disagree with ya on driving away people there are to many people out there to make that big a dent you will notice.

if anything it can bring you more business !!!
if you provide top notch support etc... they may come from a rackshack looking for more handholding or certain things such as cpanel etc...

remember this is a service industry !!!!!!!!!!!!!!!

its is not like a car or toaster or fridge where you can go down the street and get the exact product for the exact thing

sell your service not your product !!!!

Very good points by everyone indeed.

For example, I would never purchase a server from RackShack since after some research it seems to me that their finanical situation (as many of you have stated) may not always be even to support their server sales or method of business. To me they seem like a company that runs on the basis that sales from one month pays last months server purchases, and then the next months with pay the current month's bills.

Ideally I would look for a managed dedicated server since I would always enjoy the backing of the company, especially when I break things. ;)

However, in my opinion I believe Rackshack attracks more of novice customers or newer customers to the market with their low priced servers. While on the other hand after a week, or months when these novice customers realize they need more of a managed solution they will probably see the benefit of paying more for a managed server.

So I guess my original opinion has been argued very well.

Originally posted by PERL SCRIPTOR
While this is a great offer, it seems to me that Rackshack is really under selling the market. With that being done it makes it more difficult for small companies to compete.

Should they raise their prices so you can compete? In any industry there is going to be companies that will either attempt, or that can, beat your price and leave you scratching your head.

I'll give you an example of an unrelated company that is doing quite well, OpenSRS. Not a small company by any means but the point doesn't require then to be.

Many hosts are using OpenSRS to sell domains and doesn't it seem odd that all of you hosts are buying domains 'wholesale' at over $1 more than an individual can purchase one (registerfly, stargate, etc.). Seems either all of you are blitherly stupid, or you've decided that OpenSRS offers something that is *worth* the extra amount.

You can easily buy domains for $3 less than OpenSRS sells them wholesale for, so why isn't OpenSRS history, beaten by the cheapos, or lowering their prices as requested zillions of times by their resellers? Something to think about.

Originally posted by SoftWareRevue
If they can sell stuff for that price and still make money, maybe the rest of the industry needs to take some lessons from them.
Something else to think about. They don't have some magic source that you guys don't have access to, if you like their model, or want to compete at their level, then imitate it.

As for the hardware they use, wouldn't it be interesting to have a host who uses Sun Enterprise come in and belittle everyone for using their servers. If it works and they can provide the service, and this si a part of the market you want to go after, then you ain't gonna get there by offering more expensive servers and not overselling. You will be priced out, but not to the entire world, so either go after a different market entirely, or at least a different segment of the same market.

Originally posted by Cbaker17
[B]We for instance have so many orders coming in weve had to hire on additional staff to accomodate them, havent seen rackshack make much of a difference at all in fact we seem to be increasing in the level of orders we recieve rather then decreasing. Same goes for my friends that our competitors such as Jay from pwebtech, their doing great from what i hear.[B]
And this has nothing to do with Rackshack even existing or not. As for, "mostly novice users are going to go after this deal", I'd say that is being presumptuous. I don't know either way, but I can't see how you'd know Charles. I'm guessing they aren't limiting this offer to novice users.

The hardware, connection, company and price draws in novice or starter companys. While this is not the case for every customer of theirs, most of the customers i know you have either moved from rackshack or are still with them fall into this category. Rackshack provides a great product for these customers as they usually have limited resources.

And as for my paragraph which you quoted, It indeed has very much to do with this thread and rackshack. The thread started asking how anyone can compete with them, and im offering factual evidence showing its very easy to compete with them.

Dont make me have to pull a joe on you "yet another reason chicken ****'s :) jjk man you know were cool.....

Originally posted by Chicken

As for the hardware they use, wouldn't it be interesting to have a host who uses Sun Enterprise come in and belittle everyone for using their servers. If it works and they can provide the service, and this si a part of the market you want to go after, then you ain't gonna get there by offering more expensive servers and not overselling. You will be priced out, but not to the entire world, so either go after a different market entirely, or at least a different segment of the same market.


I think Charles was getting at the reliability aspect - if, with cheaper and therefore 'lower quality' hardware, that the server will still be running perfectly a few months down the line? For example, and it has happened to me in my personal machine, you purchase pretty much the cheapest harddrive on the market. It does a substantial amount of work, and is on pretty much 24/7... and after a couple of months, it burns out. It could have been just a one off, that I got, but it could also be more widespread.
Yes, the manufacturer will replace it, because its within the warranty period, but there will be substantial time lapse between you sending the faulty one, and receiving a new, working one.

My post wasn't made on the assumption that mostly novice users will go for this deal. I don't see why more experienced ones wouldn't. Not like there is anything seriously wrong with this offer. Their hardware may not be the best... but I know it isn't the cheapest they can get, it's probably decent. From what I hear support is decent, so people won't be running away from them because of no support, and the connection is obviously good.

Except the hardware... I don't see why any normal user wouldn't jump on this deal, instead of one at least 3x for maybe a few extra support hours.

No clue if they offer CPanel with these, but I'm guessing it's available.

They could have made these $150/month and still had the same amount of business. Now a Raq is about useless because they still carge a setup fee on those, and you can get a much better system for the same price. Only reason to get those now is because "they look so cool." lol
:rolleyes: :rolleyes:

Originally posted by cbaker17
And as for my paragraph which you quoted, It indeed has very much to do with this thread and rackshack. The thread started asking how anyone can compete with them, and im offering factual evidence showing its very easy to compete with them.

Dont make me have to pull a joe on you "yet another reason chicken ****'s :) jjk man you know were cool.....

LOL, I'll watch it. I see what you meant and agree. I mean, let's face it folks, there are hosts on this forum who offer packages for $1.50/mo that you offer for $20/mo. (or more). How are you all surviving? OK, so everyone doesn't know about them. Geocities and others like it, offer hosting FREE!!! Some of the free hosts come close to paid hosting features, how is everyone even selling one package with these guys around??? Why aren't we all eating leftover cat food out of dumpsters??? Ok, I'll stop, you get my point.

Why just not to ask a rackshack's customer wheather he is
happy with rackshack's services, hardware, network or not?

If a person is 100% happy, his server does not experience downtimes, tech support answers quickly then, hopefully rackshack will become next RackSpace within next several monthes. If not - they die or change pricing model.

Aloha
Chicken actually on Maui ya just go hiking and find your food on the trees or go in the ocean and find it swimming ???
besides when I was on the mainland dumpster food was not that good and the left over cat stuff had hair in it YUCK !!!!!!
now supermarkets throw out some good stuff ;) drk brown smelly meat yummmmy yellow chicken, green bread ;)

hehhehheheh

I love these kind of threads where people are so worried what other companies are doing dont people remember ya get what ya pay for ????
jjhheeessssssshhhhhhhhh

Aloha
well have to say they will not becoem rackspace or will they die ???
(who really knows) but they are filling there niche

so they will be rackshack and rackspace will be rackspace
I have a RAQ with them it isi fine for what I do with it. would I host my business site on it ?? NO but would I host some of my other sites on it sure good enough and it fills a niche I need ;)
I expect some probs for that price
at least they are learning form there mistakes and have come very far in there service.

Originally posted by Anatole
Why just not to ask a rackshack's customer wheather he is
happy with rackshack's services, hardware, network or not?

If a person is 100% happy, his server does not experience downtimes, tech support answers quickly then, hopefully rackshack will become next RackSpace within next several monthes. If not - they die or change pricing model.

Not to cut RackShack down or anything but quite simply

"Their pricing will catch up to them!"

Forget the cost of machines and bandwidth, how about the new data center?? HeadSurfer mentioned on the Rackshack forums that the building itself was priced at $11 Million (but they got it for a lot less), and that didn't include the cost of building it into a data center. They've obviously invested a lot of money into this, probably not on a whim.

By the way, Rackshack isn't the only one offering inexpensive bandwidth like this and there will probably be others trying to enter the market at similar low rates. So even if Rackshack disappears (and leaves the user of their 2000+ servers high and dry), someone else may step into their place...

Bad Business Ideas are thought of and launched every day, the vbery fact they invested in a couple of million dollar building, confirms the very fact that it will be almost impossible to make money based on the model they have chosen to proceed with.

Im sure headsurfer will make it into here soon to try to tell us all their very profitable, and no one will have anything to worry about. But then again thats what all of the now dead .coms told everyone shortly before their demise......

I of course dont know any more then any other joe shmoe on rackshack, just commenting on their business model and what ive heard from past ans present customers.

Does offering pricing at this price make them a bad company ABSOLUTLY not. Does it make them a stable company, offering a stable product that will be around down the road, who knows.

I think they're looking for a very very quick way to recoup their investment. Once they've done that, they'll rise their prices. After that, however, the new clients rushing through the door will come to a snail racing pace and they won't be in a position to expand or make a decent profit... in the future!

Or, they've got tons of money lying around going to waste and don't know what to do with it, and, oh whatever...


Kinda reminds me of w**q.

Originally posted by cbaker17
Bad Business Ideas are thought of and launched every day. . . . . . . .You talking 'bout me??:bawling:


:D

I will be the first to take lessons :D

They buy cheap hardware, cheaper than you thought.

.....

These are pre-built cages for colocation customers that are current being utilized to secure inbound shipments of new servers. On top, you'll notice 100 of our new Duron 1 GHZ units and on bottom, which you can't quite see very good are about 70 Cobalt Raqs, 70 WBL Pentium 1 GHZ with 2 drives, and about 20 Lucent TNT Max units that we bought from a recent dot-bomb. Additional servers are expected weekly through the end of the year.

.....

;)

??? what??? are you talking about..

I wanted to say: they've found a way to purchase very cheap but brand new hardware, much cheaper, than you estimated.

This is another reason why they can provide $99 servers.

How do you know how much they buy servers for, i said 500.00 or 600.00 thats pretty cheap, even say 400.00.... Anything cheaper then that and its refurb or used. EIther way their still using crappy parts, theres a reason why a servers a server and a personal computers a personal computer. You dont use a personal computer for a server, as they are doing.... but oh well.

I guess I don't see the big deal. With the $99/mo offer and others on the 99servers site, I really wouldn't expect to get a SUN Enterprise, and I don't think anyone does, nor do I think they are misleading people into believing they are getting something they aren't. What the beef?

Originally posted by cbaker17
How do you know how much they buy servers for, i said 500.00 or 600.00 thats pretty cheap, even say 400.00....


http://www.rackshack.net/colo/storage.asp



Taken from site:
These are pre-built cages for colocation customers that are current being utilized to secure inbound shipments of new servers. On top, you'll notice 100 of our new Duron 1 GHZ units and on bottom, which you can't quite see very good are about 70 Cobalt Raqs, 70 WBL Pentium 1 GHZ with 2 drives, and about 20 Lucent TNT Max units that we bought from a recent dot-bomb. Additional servers are expected weekly through the end of the year.



:D

Originally posted by cbaker17
How do you know how much they buy servers for...
Am I missing something or does this not answer the question?

well, i guess server can be bulid under $300 if there is bulk purchase say > 500 units

amd duron $40
motherboard $60 (includes built in display)
cabinet $20
512 mb sim $40
lan card $10
hd $100
etc $10

$280 around. it may be even less if they buy in bulk.

so i guess there is not much investment from there part as far as hardware goes. how know's what brand they are using. there are lots of motherboard manufactures from tiwan making motherboards available for as low as $40. and lan cards available under $10 (10 / 100mbps) ...

well, i don't know much about data centers but i do used to assemble comps, so have idea about this market.

:)

as far the support is concern i would not axpect from my $99 host to do anthing for me accept reboot my server and install patches. :)

You obv. are quotying prices out of some place like pricewatch.com, and you are forgetting shipping etc, furthermore pasrt that cheap wont stay running for more then a few minutes together, much less under any type of load such as a server environment.

And besides i dont think rackshack is using that shotty of parts :) i mean its in their best interest to keep them up and running, so im sure they spend slightly more on parts then that.... I would hope so anyhow...

ANd for 99.00/month i agree with chicken, i wouldnt expect them to use expensive servers, 99.00/month is bone dry cheap..... and anyways you cant really complain, i mean if you only want to pay 99.00 for a server then you shoul dbe willing to compromise

Aloha
hmmm pricewatch aghz amd = $56 (looks like this is without a fan)
not sure about a cabinet w power supply they can rely on for $20

but besides that the time for them to be put together and ghost off the HD configure the basic stuff etc...
that alone might take an hour a box ???
and as Charles said shipping etc...

Originally posted by mahinder
well, i guess server can be bulid under $300 if there is bulk purchase say > 500 units

amd duron $40
motherboard $60 (includes built in display)
cabinet $20
512 mb sim $40
lan card $10
hd $100
etc $10

$280 around. it may be even less if they buy in bulk.

so i guess there is not much investment from there part as far as hardware goes. how know's what brand they are using. there are lots of motherboard manufactures from tiwan making motherboards available for as low as $40. and lan cards available under $10 (10 / 100mbps) ...

well, i don't know much about data centers but i do used to assemble comps, so have idea about this market.

:)

as far the support is concern i would not axpect from my $99 host to do anthing for me accept reboot my server and install patches. :)

who said servers at that price will not work. i had comp at my home and offices built on same priced hardware working for more then 2 years. and you can not imagin weather and power conditions at my home.

not only this i have sold 100's of such machines. these are not gizzzmo kind of machines these are real computers built for real jobs, the only thing is that these are not known brands like sun etc., ofcourse quality must be compromised but when it comes to price china and tiwan are king, they produce monitors for $100, the last time i checked the prices for via cyrix 750 mhz mii proccessor in local market was around $80 with cpu + motherboard with 1 year replacement warranty and i must tell you the performance is equal to celeron 750 mhz, but the only thing is that it is not intel. who cares,, some of my friends have these systems and those are working just fine. so i guess at datacenter where voltage and weather conditions are well maintained it should not be be much of problem.

ya, i haven't gone through any web site, these are the gerneral prices in asian market and apporx. same in US too.

i didn't consider any shipping becuase i don't know about it specially in US.

Whether or not you can get parts from china for that price or any other price, does not change the fact that the parts are going to be POS....

hey, i don't say china is the only country making cheap parts, there must be companies in US giving such prices. infact i found many such prices at cnet.com prices, of course it depends what hardware a host use to build server, all i said these are the least possible prices available for computers and not neccessarly anybody or rackshack is using these prices, and there is nothing like computers with such pricing don't work, they do work and they do work fine but some parts do fail due to low quality material.

anyway, if you replace about parts with average good qulity parts then also prices will not go up by $100 so it still remain around $400 + shipping :)

Originally posted by mahinder
who said servers at that price will not work. i had comp at my home and offices built on same priced hardware working for more then 2 years. and you can not imagin weather and power conditions at my home.

not only this i have sold 100's of such machines. these are not gizzzmo kind of machines these are real computers built for real jobs, the only thing is that these are not known brands like sun etc., ofcourse quality must be compromised but when it comes to price china and tiwan are king, they produce monitors for $100, the last time i checked the prices for via cyrix 750 mhz mii proccessor in local market was around $80 with cpu + motherboard with 1 year replacement warranty and i must tell you the performance is equal to celeron 750 mhz, but the only thing is that it is not intel. who cares,, some of my friends have these systems and those are working just fine. so i guess at datacenter where voltage and weather conditions are well maintained it should not be be much of problem.

ya, i haven't gone through any web site, these are the gerneral prices in asian market and apporx. same in US too.

i didn't consider any shipping becuase i don't know about it specially in US.

I agree, for normal use, these parts are fine. Consider, however, that servers are running 24/7, 365 days a year (at least, hopefully they are :D). Components get hot, and with hard drives etc., the moving parts wear. You therefore want the best possible components that will last in servers.

Originally posted by M@tt


I agree, for normal use, these parts are fine. Consider, however, that servers are running 24/7, 365 days a year (at least, hopefully they are :D). Components get hot, and with hard drives etc., the moving parts wear. You therefore want the best possible components that will last in servers.

agreed. but what about same parts. i mena 5600 rpm ibm hard drives will be ok, cpu is same, a good motherboard is also considered in $400 price ranged server, a very very good heat sink with 10000 rpm can be arranged for $25-30 (i guess) what else you want in low prices server, to keep itself cool ??

of course there are people read to invest $20000 on servers but when we talk about low prices, i guess low prices parts will not perform that bad.

Originally posted by mahinder


agreed. but what about same parts. i mena 5600 rpm ibm hard drives will be ok, cpu is same, a good motherboard is also considered in $400 price ranged server, a very very good heat sink with 10000 rpm can be arranged for $25-30 (i guess) what else you want in low prices server, to keep itself cool ??

of course there are people read to invest $20000 on servers but when we talk about low prices, i guess low prices parts will not perform that bad.

The point I was making that for servers, you want higher quality parts... but this has got pretty off topic, lol.

Its been interesting to say the least to read this thread because like most of you, i too was quite taken back and shocked at the prices that rackshack is offering....i got to thinking, "man this is really going to kill my business"......but then.....here is where the reality of life kicks in...

I remembered the very first server that i ever got when i entered the world of webhosting..i.e when i moved from reselling that is. My first server with with, guess who?? ....Rackspace, yes Rackspace, a company charging over 4-5times what rackspace is selling at.....so it got me thinking why i had forked out so much money for a rack...and gentleman/ladies, this is were the logic of it gets really simple....yes its the issue that most of us more often than not overlook MARKETING plain and simple.....you see a loaf of bread that cost 20cents is no god to me if i dont know it exists....

Rackspace and many other marketing focused companies are of the realisation that the world is a BIG place and not everyone is fortunate enough to read/know about places like webhosting talk were all the issues are laid out on the table.....

My simple point is, have you ever purchased a product say because you saw it on television....latest Nokia xyz phone $49.99 e.g only to a few days later walk past that man's shop round that part of your town you gardly ever visit and realize HEY Nokia xyz $9.99 .....lol i know we have all been there.....

So now i ask you, how many of you would have EVER had the slightest knowledge that Rackshack existed...that is before you bacame more a part of the industry ha?...

Go out no to 10 of the places that you would have most likely gone when you were first lookingfor a dedicated server...i am talking search engines, webhosting directories...do you see Rackshack NO...........you see the companies that know that there is more than one "P" to marketing....its not just about the price people......and anyone whow is expecting to make a business out of this aught to know...but for the benefit of my friends out there..heres is a lesson on me.....

>> Promotion

Advertise, your advertisng spend should reflect your confidence in what you sell..to make money you must spend money..

>> Product

over 70% of you sales should come from existing customers and referral " i had 5 servers ith rackspace before i left, only to open my own place

>> Price --- strike a balance ----

>> Place

Presentation counts especially for first time buyers, most have never owned a dedicated server, so would you buy your first server from a site that looks like it was designed over night??

if you play the price card too far, you will wake up one day to to realsize you cant lower the price anymore and you are all played out....

Cheers all, its 5am here in London so if i am chatting rubish, please excuse me....

Hello,
Rackshack isn't at all anti-competitive. There are a few aspects of there buisness model that haven't been mentioned.
1. A signifigant portion of there bandwith is probably already paid for by the ISP, Like rackshack we operate a regional ISP. It generates ~80Mbit of inbound traffic and ~12 of outbound traffic. However our circuts are all semetrical in capacity meaning a LARGE chunk of outbound space is essentially free and clear.
2. There payoff range may not be 6 months, our model says 1 year. I can not disclose the purchase price of our servers but I can say we were cash positive in <6 months (Do to unexpected demand for upgrades).

I do agree it is a little risky and my bigest worry would be cogentco being around in a year but I think they are doing ok(rackshack not cogentco).
Also it looks like HS has taken care of this with other bandwith
commitments.
Competition is a good thing :-)... It keeps all of us hosting companys on our toes and striveing to give the customer the best deal we can, (s)he afterall pays all of our salarys. I am a
direct competitor to rackshack but I still have to respect them
for runing a good company :-)......

Sam Moats
Cobalt Racks AS19517
http://www.cobaltrack.com/cgi-bin/nph-traceroute.cgi

PS: It's 1am here in the US and if I'm babbleing blame it on the caffeine :-)

<<Please set up your signture (see profile), no hot links inside your posts please.>>

competition is a good thing :)

300 GB Monthly Transfer
$99 per month
Watch their prices skyrocket if everyone uses all of their bandwidth ;)

I'm very happy with the service that I've gotten from rackshack, and wish them the best. I don't see a particular problem with their business model...they leave themselves the "out" of raising prices if needed. Considering their prices are already so much lower than everyone else's, the possibility of a price raise isn't really a concern to me at this point. And time is on their side in the sense of slowly falling bandwidth prices, and falling hardware costs.

With about 15 sites on my RAQ, I doubt if my total bandwidth usage is much over 20 GB a month. And a year from now, maybe it will double if that. I suspect the mean bandwidth usage for RAQ owners there is 30 GB a month or less. It is likely to be very low if cbaker's point about rackshack's user base being novices is correct.

Rackshack is a nice break from the many companies offering discount servers that make available only token bandwidth, e.g., 10 GB a month.

Originally posted by Kiwi
Watch their prices skyrocket if everyone uses all of their bandwidth ;)

I think *everyone's* prices wold skyrocket is everyone used all their bandwidth allowed.

Ohh, and at least one person was mistaken about the fact that I use Rackshack's services which is why I'm defending them. Note that I do not use Rackshack for anything, never have, don't talk to Robert off-forum, we don't hang out, go golfing, etc.