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View Full Version : Prepared to pay slightly more for quality?
Ben Fairfax 03-07-2001, 08:26 AM Our bandwidth requirements are relatively small approx. 10GB (at least in the
near term) but our data (at least to us) is very valuable. We are Java component
developers who offer demos of 500Kb-3MB - maybe more to our visitors who generally
have fast connections. Our priorities for a hosting provider is as follows:
1) Never cut our URL or mail servers (this has just happend to us! An absolute
nightmare and without warning! And I hardly slept for 5 days!)
2) 99.9% uptime, hopfully never refuses packets
3) Fast US connection particularly to New York and San Francisco areas, Europe
a bonus, India, rest of the world we do not really care about. Sorry ;)
4) Full root access (including reboots through telnet without intervention)
5) No restrictions on software (i.e. can use JDK1.3EE, EJB server etc.)
6) Easy and painless upgrade, i.e. bandwidth, HD, RAM, CPU etc
We do not really need (or want) admin Panels we can configure and install everything,
so a very high service level, like live chat, free phone etc is not important to us. But
if the machine physically fails then we expect then to run rather than walk when they are
getting the new pieces to plug-in. We prefer the Red Hat 6.2 distribution of Linux with an
Apache web server, but any of the others Linux distributions will do.
A shortlist I have got down to is:
1) http://www.dialtoneinternet.com $289/month package 6 month contract (not to happy about) P3,
10K SCSI, 65GB/month traffic
2) http://www.serverhost.com $129/month March Special, P3, IDE 20GB, for 512MB RAM (one off $200 chage),
10GB/month traffic
3) http://www.server4me.com - maybe but we haven't found any reviews and they haven't even replied to our
e-mail after two days
The other route is to buy a server at ebay (I just saw a beautiful Quad Pentium Probut big box) and
cohost it somewhere, the only cohosting company on my list is:
4) http://www.dtwebworks.com space for 2u is $35/month plus bandwidth $20/10GB month and then $3GB/month,...
The http://www.4webspace.com and http://www.rackshack.com and similar offers cannot really offer quality, and how
can a K6 move 100GB/month of website traffic anyway? I imagine that their networks are flogged by people
with porno/mp3 sites and virtual hosting companies. But they performed OK (surprisingly!) with ping
and traceroute showing they have Tier 1 providers.
Please tell me about any practical experiences you have with the above people, any advice or info on
other providers. Any help much appreciated. I want to be very careful now because of bad past
experiences.
If anyone wants I can post some juicy horror stories about my experiences with UK hosting providers.
Email: ben@webcabcomponents.com
Duster 03-07-2001, 10:02 AM Several of us here, myself included, have or have had servers at Dialtone Internet. I've had mine for 10 months now. I've found the service generally superior and that they strive to continually improve (something I do myself).
A legitimate complaint against them is rare. In the past year, on this forum and the one at scriptkeeper (which I haven't read in months since they remove posts that are derogatory about certain companies) the complaints have been:
1. From someone who replaced or recompiled all the programs and then was upset that they weren't supported. Some of us suggested he colocate his own server as it was clear only that would satisfy him with any company.
2. A woman (vixen) who didn't know what she was doing, caused harm to others via IP addresses, refused to admit it was possible, and refused to take responsibility for her actions. Some of the technically inclined pointed out to her that it was possible for her to cause damage to others. DI's tech dept. actually responded to this one. She had left quite a bit out of her version of the story.
3. About the 95th %ile bandwidth method. It is generally misunderstood by many people who perceive it as unfair and even bad, when, in fact, it has advantages other methods don't have. I have an explanation of the various methods on my site. This is now a moot point as DI offers a choice of bandwidth methods.
In short, DI is not perfect and, as with any company, it is best to follow up and make sure such things as welcome letters (with server instructions) are sent, that tech requests are executed as desired, and similar things. Chances are high they will be done right and expediently, though any of us are capable of human error at any time.
I'd rather do business with a company that acknowledges it is not perfect and strives for excellence than one that is deluded in thinking it is perfect and makes no allowances for the fact it can be at fault and can improve.
Chances are very high you would be happy with DI. They continually strive to improve their offerings, their service, and they genuinely care to please their customers. Some of us were even called on the telephone a few weeks after we got out servers to see if we were happy with everything and if there was anything that they could improve on.
I did a lot of research before I chose DI (as you are doing now). I had two less than satisfactory hosts before and wanted this to be the last time I switched. As time passes, I grow more firmly convinced that it was the last time I will switch.
Ben Fairfax 03-07-2001, 10:36 AM Thanks for the reply, I just did a ping on just site and the 64bytes came back in approx. 290ms which is good. And then a traceroute and the same tier 1 provider alta.net. Two of our partners are ComponentSource and Flashline which also seem to use alter.net, does anyone know how the network of this tier 1 provider behavious and/or it advantages over provider such as Sprintnet and UUnet?
I imagine that DI NEVER outsources it webhosting? But techcellence.net is certainly using there network.
Ben
allan 03-07-2001, 11:15 AM Originally posted by Ben Fairfax
Thanks for the reply, I just did a ping on just site and the 64bytes came back in approx. 290ms which is good. And then a traceroute and the same tier 1 provider alta.net. Two of our partners are ComponentSource and Flashline which also seem to use alter.net, does anyone know how the network of this tier 1 provider behavious and/or it advantages over provider such as Sprintnet and UUnet?
Alter.net is the UUNET backbone.
Duster 03-07-2001, 12:29 PM No, I don't imagine they ever do outsource their hosting (connections). They have no need to. They have a first class facility and have expanded in the area. I've been to where they are located. It's in the next county Broward), about 30-40 minutes away depending on traffic. Like I said, I did a lot of research before I chose them.
At one time, they did NT hosting, and sold that off to concentrate on Linux. I think they may have done shared server hosting also at one point, and sold that off before the NT. They have chosen to focus strictly on dedicated servers with Linux (including Cobalts). Judging by their record and performance, it was a wise decision.
The title of this post is "Prepared to pay slightly more for quality?" Your intent is clear, and smart. I'll just add that the most expensive thing can be buying too cheaply. We see it here all the time, and there are current discussions that prove it.
DI doesn't promise the world, "free" support that is built into the price, or deal in gimmicks. They deliver solid, reliable performance and service. If they make a mistake, they make amends for it.
The most important factor to me in any business is the attitude of the company, just as it is with individuals. DI excels in theirs and I am confident you not only will not find any better, but few as good.
BlazeBox 03-07-2001, 01:12 PM Although I don't colo with them, I have great experiences with my server @ dtwebworks. After Burst and Ultraspeed servers this host really made me happy - hardly any downtime, which possibly is the biggest thumbs up on this company, along with the good support.
Just a few cents to toss in the basket ...
Have a great day,
Mike
Ben Fairfax 03-10-2001, 09:51 AM After further consideration and discussion it seems that CPU power rather than network speed is our main concern. It seems that serverhost.com offers the best deal for us a P3 at 750Mhz for $99 a year if we pre-pay. The problem I face with this that if our service of running remotely EJB components really takes off then we will need more CPU power.
DailtoneInternet.com seem very good but if you are looking at CPU power as your central purchasing point rather than network connection then they are much worst value than serverhost.com Colocation is a solution but I not like the worry of the machine physically failing since this has happened to me in the past.
At present I am thinking about serverhost.com, if anyone has any ideas then let me know. I really want to make the right choice and my requirements are slightly unusual so I am not explicitly catered for.
Ben Fairfax 03-10-2001, 10:12 AM I got a reply form DialtoneInternet and server4me, but parties answered all my questions and both where reasoonable.
I was offered $175/month deal from DailtoneInternet with 10GB/month, P3 500Mhz, 128Mb RAM and 10K SCSI HD. Much better for us but I still prefer serverhosts.com special with 512MB (or 256MB ram). It seems that DialtoneInternet have sales people on commission since certain people seem to be sitting on the email all day. I would be happier if I knew they where investing in there services rather than investing in trying to sell their services.
Server4me did get back to me and mayso answered my questions, but there offered still seem slightly to good to be true. Does anyone have any experience with them?
Also no one at there has used serverhosts.com. If you do not want to identify yourself then you can send me an email at bfairfax@mth.kcl.ac.uk
Duster 03-10-2001, 12:38 PM Originally posted by Ben Fairfax
It seems that DialtoneInternet have sales people on commission since certain people seem to be sitting on the email all day. I would be happier if I knew they where investing in there services rather than investing in trying to sell their services.
What a stupid remark to make about any company! Would you be happier if they ignored your e-mails or didn't respond promptly? Also, sales and technical services are entirely different departments, rendering the latter part of your comments senseless.
As a point in fact, DI does invest in their services and add to them. In the last few months they have added ChiliSoft at no additional charge and also Sphera (also at no additional charge), giving users a choice between it or their own proprietary server interface.
Choose who you like, and you would do well to skip the inane comments.
May you get what you deserve in a hosting company.
Ben Fairfax 03-10-2001, 02:23 PM In reply, any product depends apon branding as well as what you actualy get. Since this is seen to differentiate and "add value" to the underlying service or product. The cosmetic industry for example manages to maintain huge margins because of an imagine.
My attitude to web hosting is that it is a commodity, and the "value add" which providers can offer ourselves is very little. Services like the GUI provided with Cobalt's RAQ's or DailtoneInternets interface does not "add value" from our point of view. Further, branding, customer support (like installing OS, installing scripts or whatever) are not of any use to us. But I accept that a products value can over be decided from the customers prospective, you apportion desirablility of services according to your needs and the degree to which these services improvced your basic value added proposition.
My job like DialtoneInternmet CEO is to run a company, our responsibility is to maximise earnings per share for our shareholders not nessesarily to offer our customers the best price or to pay the salaries of marketing people.
So lets just get some figures, a web hosting company whoever they are pays about $1/GB, theoretically less but after the wastages and the need for redundancy I imagine it works out something like this (Say DailtoneInternet pays $2 because it has a high level of redundancy) That is they buy this commodity off a tier 1 provider, in the hope of reselling it. I imagine the hardware is purchased at something like a 15-30% discount to the retail market prices. So an entry level server are probably put together for $600, maybe $700 after to pay someone to plug it pieces together. The servers again are commodities the web hosting company's just buy and plug the pieces together. Again my question is where is the value being added in this process. So the basic product which is now detailed is ready for the market and if you accept the above comments then you will agree that it is purely a commodity.
Now what you want to pay for in excess of this depends apon the users needs. Sales people need to be paid, given a desk, a pension etc etc... They are not free, and GUI are not free. All I wish to pay for in excess of the basic product is the service that if any physical components fails then they will be replaced quickly. I do not want a welcome letter, sales people phoning me, a branded product; since I believe I am dealing with a just a commodity.
So lets go back to the numbers; 10GB cost approx. $10, the box $600 (maybe $700), the rent of space $15 month (maybe $25 month if they really go over the top). Assuming the server depreciates at 40% in the first six months, and it costs $100 to pay someone to connect the server to the network, then a company will be paying something like $400 to offer the service in the first six months (if we assume that they are paying $2/GB and to rent too space it is $25 month, then the figure would be $520). The figure is going to be far closer to $400 than $520, but lets not go into detail it is not nessesary to illustrate this point.
If a company is charging $99 setup and then $125 month then there revenue after six months will be $849. They have to buy the other equipment but I cannot see this being more than $150 per client for these six months if they have any ecconomies of scale. They will also need insurance, accountant, a lawyer, cleaner etc etc maybe anpother $100. So they are still looking at $200 dollars at these charging levels after an outlay of $650 dollars over six months, at a return on capital of over 30% in six months, thats way over 60% annually (George Soros achieved 32%, over his fund managment career).
I have nothing against people making a very good return out of me as a customer. What I object to is me paying 100% more than a commodities base cost and 60% more than the market price in order to cover a salesmans commission.
That is a good argument, but saying that web hosting is a commodity is a bit outlandish. You could say the same thing about any service industry.
The reason companies charge their pricing is not based solely on hardware costs, nor bandwidth, rack space, etc. It is a combination of everything and it is also their support.
If it was to be based on price only, then nobody would be running the show. There needs to be some value added, and quite frankly, I know that plenty of people would rather spend a few extra dollars with a company that provided not only the hardware, but good support. That in istelf is worth more to people then just paying for bandwidth, hardware and rack space.
It is not a commodity, but a full service that you get what you pay for.
Duster 03-10-2001, 03:35 PM Originally posted by WeinBar
That is a good argument, but saying that web hosting is a commodity is a bit outlandish. You could say the same thing about any service industry.
I agree with you Michael, except that it is much more than outlandish to make such a statement. It is ignorant and uninformed, even stupid.
I see computers often referred to as commodities, yet that is not true either. There are clear distinctions in quality among several components and brands which make very big differences. To refer to a service as a commodity is even more absurd and illustrates a total ignorance of what a commodity is.
I say this having been a commodities broker and currently involved in the commodities market once again.
"I have nothing against people making a very good return out of me as a customer. What I object to is me paying 100% more than a commodities base cost and 60% more than the market price in order to cover a salesmans commission."
There is no market price for hosting, no base cost, and the assumption that the difference between a cheap host and an inexpensive one is a salesman's commission is a total fabrication that cannot be substantiated in fact.
Ben Fairfax 03-11-2001, 12:40 AM In business going for the cheapest service provider turns out to be the most expensive option in the long run. Usually I try to choose a quality service providers and then select a provider from this group.
The point of my earlier post is that the figures of some providers seem much higher than is nessesary to offer the service I am after and make a reasonable profit. Whether this extra money is going to sales people or support or excessive profits I do not care (the cost of the box and bandwidth are known and are takening into consideration). I am focused on my companies performance and I want to get a good deal for my company since this is my job.
Computers are commodities in the sense that a computer of the same spec will perform the same (assuming it is working) whether it is at DialtoneInternet, serverhost or my shed. Hardware also does not degrade significantly with time, a two year old 128MB PC100 will perform the same as new one.
But it is very important that they rapidly react when anything physically fails. Also the question of network security is a good value add service which I overlooked. But for people/organisation with server administration knowledge these other services are of little use and we have never used then. There is no need for intervension with any of the above mentioned hosting services since all of then allow the user to reboot the machine remotely through telnet access, so the user can install software without intervention.
Duster 03-11-2001, 01:58 AM Originally posted by Ben Fairfax
The point of my earlier post is that the figures of some providers seem much higher than is nessesary to offer the service I am after and make a reasonable profit.
How do you know what is necessary for them? You demonstrate an appalling ignorance of the simplest economic principles, as many consumers do.
The shame of it is that these are the same principles that most anyone who is employed, either for themselves or for others, face, so it doesn't take any imagination to think of a business having expenses. Out of each paycheck, a certain amount goes to pay taxes. Out of the balance, there may be a car payment or transportation to get to work, insurance, gas, utilities, a mortage payment or rent, and other expenses. Just as you don't get to keep every bit of the take home pay, businesses also have many expenses and you can't possibly judge their profit margin without knowing their expenses, capital improvements and expenditures, and many other things.
Computers are commodities in the sense that a computer of the same spec will perform the same (assuming it is working)
That's not what a commodity means. Soybeans are a commodity, there is no difference between one group of soybeans and another. There are differences between computers. Since they vary by specs and quality, they can't possibly be considered a commodity.
But for people/organisation with server administration knowledge these other services are of little use and we have never used then. There is no need for intervension with any of the above mentioned hosting services since all of then allow the user to reboot the machine remotely through telnet access, so the user can install software without intervention.
Maybe you should be looking at colocation instead. Buy your own box, pay only for storage space and bandwidth, and do all your own servicing.
I have found that DI's support staff are usually slow and don't know what they are doing. If you need emergency work, you will be spending a week authorizing charges over and over for the same thing. We moved one server to skynetweb, and while they lack a control panel (they do install webmin) and the backend bandwidth reports, and support database, their support staff is fast, top notch and know exactly what they are doing. Another I would recommend would be rackspace. I only hear great things about them and their connectivity is to die for.
Ben Fairfax 03-12-2001, 02:26 PM It seems after looking at the posts on these noticed boards that a significant proportion are from salesmen trying to drum up trade.
With the quality of the support at web hosting company's,
I imagine that are very few good programmers holding positions in web hosting companies since there are not even enough programmers to go around the software development companies.
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