Just noticed something interesting. Since we saw cogent dedicated offers started a few weeks ago. We now see some non-cogent provider dropping their price dramatically. Some non-cogent are offering 300GB(Acutal Usage) for $199 or $150 for colo. Wow, 50 cent per GB. I guess cogent competition must be putting some pressure on non cogent ones.

Personally, I think this is a knee jerk reaction in the market. The trends are all pointing to an increase in the cost of bandwith over the next couple of years. I will see if I can dig up some of the articles/studies I have read and post them here.

Originally posted by Eiv
Just noticed something interesting. Since we saw cogent dedicated offers started a few weeks ago. We now see some non-cogent provider dropping their price dramatically.

I suppose you also think that Intel is only making faster/cheaper processors because AMD is competing with it? Technology moves forward; silicon gets cheaper; bandwidth gets cheaper.

Yes, that is true over the long term. Prices will decrease and technology will increase. However, it is not necessarily true over the short term. I would imagine that some providers are going to need to raise their prices to cover losses during this recession.

Mike - it would be very interesting to see what articles you have on this, so please post some links! :D

Companys are going to have to start competiting not only on price, but our going to have to increase the level of service they provide, this is expensive as it means adding more bandwidth and more personel and more equipment. All of this will drive prices up. Not to mention that i would almost bet in a year cogent will drop off the face of the earth or raise their price 2x or 3x. That in itsself will cause their competitors to do the same.

Not to mention that i would almost bet in a year cogent will drop off the face of the earth or raise their price 2x or 3x. I would second that. It's only a matter of time :(

One more thing that potential clients of Cogent hosts (and all hosts) should consider are the financials of the company. If you are a serious business person, sit down the with CFO (Chief Financial Officer) or as close to his position as you can and talk cold hard numbers. Of course, it's easy to not disclose that info or just plain make it up, but a shrewd businessman can spot a liar.

We just did a deal with Inflow and prior to the deal, we did over 100 hours of research. And BTW they -offered- a 12-month agreement up-front. Any coldly rational person may read into this that in 12 months pricing will be higher. Who knows. Just be sure you're not causing yourself trouble with a fly-by-night host.

"The opportunity cost of changing hosts is immense."

Drew Nichols

That brings up an excellent point, wich is, if you offer Cogent, make sure you sell it for a margin big enought to cover your expenses if these 2 probable scenarios should happen:

1) Cogent goes out of business (hey you can only lose money for so long)
2) Cogent increases pricing 2x or 3x or even more (like cbaker17 pointed out)

Just be carefull, that's all

If and when cogent bites the dust it will be a mess for sure. I hear already places are raising prices on their bandwidth also, so in the 6/12/18 months if cogent dies prices could be significantly higher than they are now. I have stuff on cogent and am allready doing like CRego has said many should do. Make sure your eggs are ready to get thrown around should anything happen and take precautions to prevent them from cracking.

I agree that Cogent is one of those things causing sleepless nights right now.

I'm actively pursuing a colo deal with a local ISP that's been around for like 10 years now, they're not cheap, but they're solid. Hopefully I can grow my business enough to afford it (the costs per mbit vs Cogent has a curve where eventually the two meet! Right now as close as I can cut it that's about at 4Mbit, I can afford 2 right now).

Cogent truly does worry me, they're another Northpoint/@Home just waiting to happen, this time instead of end users, it's gonna be service providers getting smacked in the face.

Gary, I'm in the same boat as you, but the curve never gets close to touching Cogent's pricing. I think we'll all be proud of our diversification strategies in 18 months max.

Drew

our diversification strategies What is your strategy (just curious)?

Originally posted by RackMy.com
What is your strategy (just curious)?

He's changing his company name to:

cobalthost,bait,andtackleshop.com :D

Originally posted by RackMy.com
What is your strategy (just curious)?

Trying to grow big enough so I can afford a DS3 with AT&T to put into my own small data center? Then grow big enough to make it redundant with a second DS3 from ITC/Deltacom! And then by that time Cogent will either have made it, or went bust, if made it then try to get my own gigger and start offering cheap colo/dedicated with a side order of best path premium service!

Or did I mean "getting enough customers so I can start eating ham and cheese rather than bologna and crackers"??

I suppose you also think that Intel is only making faster/cheaper processors because AMD is competing with it? Technology moves forward; silicon gets cheaper; bandwidth gets cheaper.

We'd like to see it here... worldcom/UUnet announced an increase last month in Italy.

2 Mps: 1,700 bucks

:((

We're paying $1200 for 2 Mbps that was ordered about a year ago. There is plenty of room to make money off of that.

Drew

Originally posted by cbaker17
i would almost bet in a year cogent will drop off the face of the earth or raise their price 2x or 3x.

Oh no!!!! that will make their bandwith like ... $0.18/GB (assume $300/100mbps)... woa, still good deal :D

cheers,
:beer: