Seeing how Rackshack's servers are only $99/month, they must buy their servers really cheap if they're going to make any profit. Does anyone know where they buy their servers or how they plan to make money?

Setup fees I would guess :)

Originally posted by Vex
Setup fees I would guess :)

Where have you been the last 2 months?

Does Rackshack oversell? Is there anyone on this forum who uses the full 400GB on their dedicated server?

lol

Oh lord, let me unsubscribe from this thread right now before i have to listen to anymore stupid questions.

Originally posted by clocker1996
lol

What:confused:?

They oversell hugely on bandwidth.

Although some use all of it, it's probably less then 5%!

OK. I won't ask more stupid questions(well, I still probably will).:)

What percentage of websites on dedicated servers use more than 300GB of bandwidth?

How is that relavent and what does it matter? It doesen't, you can go look at their network graphs, see that they have bandwidth for everyone, see that they utilize like 40% of it, and really thats all you need to know, and a lot more information then most companies would give you frankly.

It's revelant to how RackShack makes money. I was just wondering:D

http://webhostingtalk.com/showthread.php?s=&threadid=47004

myles i thought you were unsubscribing from the thread? :x

I did, till i browsed through, commented again, and got re-subscribed heh

They make money alright.

ok i did some rough sums a while back, based on number of servers and amount of bandwidth used (from their mrtg's) and on average (my sums could be complete rubbish of course) a server used 100 GB a month. feel free to repeat my experiement. work out the average useage of their pipes in and out convert to gb a month and divide by about 6000.

do they make a proffit. i bet they do. i bet having ev1 as a sugar daddy helps em real nicely on lines of credit and financial backing. robert wont have had to go crawling anywhere for money.

how do they make money,
1 - use gig e's
2 - use value line servers \ or bulk perchase servers
3 - keep a small product line , diversification can lead to extra overheads
4 - dont provide much support.
5 - buy the sorta big that makes even your suppliers cry let alone your competitors.

they have made themselves a market place, if you know what your getting into they are excellent. do they oversell? tricky, if everyone used 400 GB they wouldnt be able to support it this month, roll on another gig or two and yes they could. 400 gb is only a little over 1 mb of bandwidth, thats about 30 bucks from cogent (3000 bucks for 100mbps). other providers are more expensive true, factor in the datacentre costs, the proffit made on upgrades (robert admits this is where they make money as well) and the bulk buying power and your left with what i consider to be a good business plan. so allow maybe 15 bucks on bandwidth, 50 on the server (over two years = 1600, take your guesses as to how mucht he servers cost, personally i reckon between 600 and 1750) and 30 on power and dc and company overheads. that still leaves 4 bucks proffit. not much i grant you but i think those 99 buck specials dont cost 1600 so the 50 once you have subtracted the setup could be 20 and the proffit just went to 34 x 6000 x 12 = 2448000 :D minus wages and tax. ok so its incredibly rough and innacurate. the point isnt to calculate roberts take home wage but to show that they can be proffitable.

i dont have any inside information, all this is based on me being curious and doing my sums on the information i have available. if anyone has any thoughts or comments id be glad to listen. if robert would comment it would be great. im interested to find out how close i am on some things :)

I heard they bring in 3 million total.

that would make their average income per month per server 41 bucks. so either they have way under 3000 servers, or that figure isnt gross yearly, maybe its 3mill a quarter? just playing with figures:) but a little bit of maths gets to the bottom of stuff fairly quickly.
99 bucks is their cheapest server, even if you allow it as an average and exclude setups, their gross income has to be far higher. at least 250% higher right? maybe theyre older figures, or maybe im just plain wrong :)

Originally posted by richy
i bet having ev1 as a sugar daddy helps em real nicely on lines of credit and financial backing.
That's the crux of the matter - RS was started to utilize extra bandwidth from the EV1 network. And I bet RS is now strong enough to stand on its own feet, so to speak ...

Add Robert's business sense, and you have a recipe for success!

I will try to answer, this is not my main language.

First of all servers are very cheap if you buy them directly or better if you build them (or own a share of a company who builds them).
Important: Rs is a branch of a phone company, isn't it?
So we have to consider that phone Co's manage monthly traffic very easily if the would host servers as further activity.
Servers consume band in a very unbalanced mode, a visitor just clicks and gets Kbs and Kbs of data returning him. If you check by Mrtg you can see how "unbalanced" bandwith could be.
So that gap between incoming and outgoing band is "free" to be sold to "phone calls" customers or vice-versa (it works fine in both ways).
It is clear that those 300 Gb month are cheapest than the average other companies pay for.

Well just my 2 cents (or Euro)

Bye