What would you pay for the following:

20gigs of bandwidth a month
1gig diskspace

only 10 clients per server.

or maybe 20 clients per server, and only 750mb diskspace?

Originally posted by Dylan
What would you pay for the following:

20gigs of bandwidth a month
1gig diskspace

only 10 clients per server.

or maybe 20 clients per server, and only 750mb diskspace?

Not more than $75 and $50 per month

so, you saying $50 a month for the first ones good?

I would say 39.95 and say your going to only limit it to 20 sites per server

Originally posted by cbaker17
I would say 39.95 and say your going to only limit it to 20 sites per server

I try not to disagree with other hosting providers here, but, frankly, in this case I have to. I do not see any way possible for a hosting company to maintain profitability if they are earning only $800 per month per web server. I just don't see it.

You're giving them 20 GB of bandwidth. Even at the *extreme* low end of cost, that bandwidth is going to cost you $20 per client - and that's *extremely* low, I'd say it's much more likely that you're paying $2 to $3 per GB than it is that you're only paying $1 per GB. But, assuming $20 per month per client for bandwidth, that's $400 your cost for bandwidth. So now your entire server is down to $400 in "profits".

Then, factor in what it costs to keep the server running. Maybe you own your own NOC - if so, factor in the electrical costs, the cost to maintain the UPS system, the costs for air conditioning, etc. Or if you're co-locating, calculate what you're paying for your colo. Chances are it's in the $100 to $200 per server range.

So now you're down to $200 to $300 per server for profits.

Now, let's say you bought this server and you paid $1500 for it (if it's only holding 20 accounts, it doesn't need to be that powerful - a single processor box with 256 MB RAM should do it, and you can get those easily for $1500). At $300 per month in profit, that means it's going to take 5 months to amortize out the cost of that server.

Now, I'm not even counting the labor costs of running a server, because I don't know how many servers you have. But assuming you have $10,000 a month in payroll (not an unreasonable assumption for a hosting company), you'd need to have 5000 of these server boxes online just to break even. Even if your payroll is only $5,000 per month that's 2500 of the servers to break even.

I just don't see it happening.

My suggestion - if you're going to limit a server to 20 sites per server, factor in the following cost assumptions:

Bandwidth: $40 per site per month
Colo: $10 per site per month
Hardware Amortization: $12.50 per site per month
Support/Admin Cost: $20.00 per site per month

Total to break even: $82.50 per site per month

So price it at $99.95 per site per month and you should at least make a profit.

Now, before everyone leaps on me and says "but they could rent a dedicated server for that price!!!", please remember that a dedicated server (at least one at under $100 per month) typically includes no tech support, no server management, etc. This does. For a dedicated server that includes all the tech support and management you can expect to pay $300 to $600 per month. So even at $99.95 per month, this is still a very good option.

That's just my opinion, you can do what you want. But what I have seen out of this industry in the last 6 or 8 months makes my blood run cold. We as hosting companies are sabotaging our own industry by trying to sell our services for half or even 1/4 what those services are actually worth, and I firmly believe that the industry will not be able to sustain it's present level of growth if the trend toward basement-level pricing continues.

Good luck,

Jason

I see it happening!

To cut the long sab to one line, here goes...

"Help your client and you'll strive with them!"

Originally posted by Dylan
so, you saying $50 a month for the first ones good?

Sure, I believe $50 for the first one is good.