Hello,

My name is John Jaskolski. I am starting a Web hosting company and I am seriously thinking about using Alabanza as my wholesale source. The product I am looking at leasing from Alabanza is what they refer to as their Configuration 2 - Raid Server. Its a Dual PIII 733 with 1GB RAM and 18GB HD Space and 100 GB/Month in traffic. The sales rep that I spoke to at Alabanza indicated that we can host 1000 virtual accounts on this server. When you do the math on this it averages out to 18MB of disk space per account and 100MB/Month per account in traffic. After that, the cost of overages is $10/GB for traffic over and above the 100 GB/Month that is allocated. When I go out to other Web hosts I read things like Most web sites do not exceed 1GB to 2GB per month in traffic. That is like saying 1000 sites wont exceed 1000 GB to 2000 GB per month. Alabanza is only allocating 100 GB per month for 1000 sites. Here is my question:

What kind of bandwidth does the average site use in GB/Mo? If we put 1000 customers on a single server will 100 GB/Mo be enough or will we be paying $100s and perhaps $1000s extra per month for Bandwidth Overages? What have other peoples experiences been in this regard? When using Alabanza do you find that you are paying extra for overages? Alternatively, if you are using Alabanza but are nowhere near 1000 accounts, is your average customers usage such that if you did hit 1000 accounts you would be paying through the nose for Bandwidth Overages?

Also, I frequently read in posts on WebHostingTalk.com about people complaining about Alabanzas prices. They seem to feel that Alabanza nickels and dimes them to death. Can anyone give me details regarding what your experience has been? Do you get hit with unexpected charges? If so, what are they?

The way I figure it, once a server is maxed out, the cost is $1695 (Cost of Server) + $1000 (Cost of 1000 Control Panels) - $35 (First 35 Control Panels free) = $2660. If you have 1000 clients on that server, this comes out to $2.66 per hosted account ($2660/1000). In addition you have credit card charges of say 2.5% Plus 40 Cents per Transaction: On a $20 per month account that is .90 Cents (.025*20+.4=.9). Thus the total cost is $3.56 per $20 Account (Plus the cost of Technical Support, etc.). But, if you assume that Support costs $1.5 per Account, you are still making $15 per Sub X 1000 = $15,000 in profit per Full Server.

Alabanza tells me that Jumpline has 20,000 customers on 20 of their servers (1000 Subs per Server). Based on the numbers outlined above, I figure that they should be making $300,000 per month minus Administration costs. That is good money! What is everyone complaining about? Am I missing some costs here?

Are there other factors that I am failing to take into account?


Do you have any other advice for me, and whether or not I should use Alabanza, as I begin this venture?


Sincerely,


Dr. John V. Jaskolski

P.S. Other wholesale sources I am looking at are Hostopia, InQuent, and VDI. Hostopia just came out with a new product called their VM Server for which the average hosted account costs $2.60 per sub (with some pretty severe limitations on things like number of Emails, etc.). One drawback to Hostopia is that they offer NO automated mechanism for setting up accounts on their VM Server. I have not heard back from InQuent yet and I do not want to use VDI (or consider them) until they come out with Version 4 of their Control Panel.

Pick anyone but Alabanza. Their servers are not worth the price they show, and there Control Panel is not worth $1 per user. You can find Control Panels for $200-$300 a month, per server, else where. Sad thing is, I cant remember the addresses. We have 4 servers with Alabanza, and 5 servers with Dialtone Internet. The five servers we have with Dialtone, are overall better servers, a much more reliable network, and alot cheaper. Last month, for 4 servers, we paid a total of $7500 for the cost of the servers, 2200 Control Panels, and there additional hidden fees they tend to toss on the bill. Our 5 servers with Dialtone, we pay $2500/mo, and we were able to provide a much more reliable network, our customers are very happy with our choice of Dialtone, and we can offer many more features as well.

My thoughts of Alabanza are they got the "Corporate *******" attitude a bit too fast. Hell, they laid of 60% of there employees in September to raise prices 90% in November.

The choice is yours, but I would look into other uplines, Alabanza is just too greedy, too expensive, and with there very unreliable network, you will lose alot of customers as well.

Get a server elsewhere and use something like http://www.ensim.com for the control panel. Its a one time fee :)

-BW

Jaj,

Why dont' you try to figure how many customers you would need (average data transfer: 300-500MB/mo per customer) in order for you to break even? Next, figure out how long it would take you to get these many customers. After that, figure out how long can you sustain lost (not only for a server at alabanza, but also for advertising, etc) before you even break even.

Personally, I would be mad if my host put 1000 accounts in one server.. That's just simply too much. Ventures Online has this Dual P3 1Ghz with 2GB of memory (and not sure about their HD, but I believe it was SCSI) and they promise to put only 300-500 customers on this server. 1000 accounts per server is just plainly non-sense (I won't go with such host). Of course alabanza will tell you how good their servers are and how many accounts their servers can handle, but it's not for real...

Another thing, $10/GB overage bandwith charge is just way too much... I think even $3/GB is already too much (still OK though). How if you have several customers (out of 1000 you are planning to put on this server, say... 1%, i.e. 10 customers) who needs more than 20GB of data trasnfer per month? Are you going to just pay $200+ for each customers just for the bandwith only? No way...

Anyway, there is a lot of solution you can think of... Asking questions is a good start and Webhostingtalk is a good resource for just this reason. But more importantly, take the advices that some of these people are going to give you since they have been in this business and they know what they are talking! Good luck.

Cheers,
:beer:

[Edited by dektong on 04-07-2001 at 10:01 PM]

I feel the alabanza system is very useful and that $1 per control panel is somewhat worth it. I had a server with OLM last year before they introduced what they have now, and they provided a couple of basic scripts to do things and that was it.

The alabanza software does everything for you - billing, setting up new accounts, maintains accounts etc.

I study university fulltime and don't exactly have much time on my hands. I run about 400 sites now on my alabanza server. I check my email each day, respond to support and sales questions (i have a big support site which brings the support load down a bit), I answer the phone when I can and I mark of cheques and credit card receipts (emailed to me) to the appropriate accounts.

I just don't think that it would ever be possible to run so many accounts without alabanza's software with the little time I put in. That's about 30 hours per week towards my business I think.

The other thing is that the software is somewhat scaleable. I'm getting about 50 new sites per month now and have been for the last 5 months (hence the sudden growth). That's only going to increase too!

I think that bandwidth is a bit overpriced but if I was to setup the same operation in my country, the main telco company charges $0.12 per MB! so I think the $10/GB is reasonable for me :)

My 400 sites use about 50 GB of traffic a month too.

Cheers,
Nigel

John,

Did you receive my reply to your original email?

The VMServer product we are offering is not intended to be used as a high-volume business solution, rather it is intended for use by YOUR resellers.

This allows you to offer an automated "Hostopia-lite" solution for the web-development community. The typical profile would be a web-developer with 100 websites or less.

Since we are very flexible in our design, be aware that we are already revising our offering to reflect the feedback we are getting from people like yourself.

I am in agreement with the previous posts stating that putting a 1,000 websites on 1 server is a risky proposition. One looping script could take the whole server down along with all the websites. Receiving a 1,000 phone calls from angry customers could kill your support and create ill-will among customers.

Automated account set-up for you and your customers is available through usage of our API technology. All aspects of the solution can be fully automated with no human intervention required including billing. Some of our customers have contracted their billing and automation integration to http://www.arrowup.com who do a fine job.

However, in our case we expect you to maintain the billing relationship this ensures that you maintain account control and we remain completely anonymous to your users.

Lastly, to my knowledge, Alabanza does not offer native NT support for Windows applications and since this represents about 50% of the market, if you are not offering this you will not grow your business as quickly. Also, customers are willing to pay a "Microsoft Tax" for hosting if you offer support for applications like MSAccess, ASP, Coldfusion, and others, thus allowing you to achieve much higher margins and a more profitable product mix.

Franc

That bandwidth price is way over the top. Not speaking from experience but negotiate, I'm pretty sure someone like jumpline and a few of the older clients, would be paying under $3 GB.

I think these guys are growing too fast and trying to be very selective of who they are bringing on, to keep their tech support down and stabilize. But they are quite happy to be bringing you on for 10GB as they are probably making over 400% on that alone. You would have to be crazy to be paying $10 Gb As for their sales people they would tell you anything if you are prepared to listen.

I think that VDI are reaping the benefits of Alabanza new pricing . I see they are not taking any more customers at present system overload. If Alabanza is putting the extra dollar into research and development to keep there customers on the top of the game, well maybe keep an eye on them, but if it keeping there execs on a yacht in the Caribbean forget it.

The choice is yours, but I would look into other uplines, Alabanza is just too greedy, too expensive, and with there very unreliable network, you will lose alot of customers as well.

I don't know what kind of "very unreliable network" you are talking about, but I have 1 web site hosted with an Alabanza reseller, and access times are great. I have not noticed any down time either.

However, the amount they charge for bandwidth is simply too much -- $10 per GB, I mean really, what are these guys thinking!?

However, the amount they charge for bandwidth is simply too much -- $10 per GB, I mean really, what are these guys thinking!?

Think in terms of buying a car. $10/GB is the "sticker price". You need to negotiate, and try to bring that down. Be persistant, I think you will be pleased with the results. However, keep in mind that many clients do not use a whole lot of bandwidth. The average client in fact uses under 1 GB/month.

In regard to the network, overall we have been pleased with it- every network is going to encounter problems somewhere along the line, but to me, the Alabanza network seems like one of the better networks available.