Hi guys,

Quick question: How's the dedicated server market?

Do I have any chance of competing (assuming 24/7 (phone) support, state of the art NOC and fast connections) with a company like rackshack who can offer 400G (pracitcally a t1) for $99/mo? - is there any room for competition? Is it worth putting the time and effert into running a server business (and/or a datacenter)?

Thanks

400g burstable to 100mbps is much better than a t1. just a heads up.

aim for a different market niche, say people that want more service, server management, value added services, sane upgrade fees =]

I didnt know the 400g was burstable to 100mbps - i woudl just like to see the expression on the customers face when they see the bw bill if they burst near that high :)

Anyway, i was just saying 400g is about the same as a t1 can push

You can get a 100 megabit line from cogent for about $3000/month.

I'm fairly new to the dedicated market also, but my strategy is to get people to realize that those 400gigs from RS are all for show -- who really uses that much? Obviously, if you offer it, you'd better be prepared to make good on your word. Offer a reasonable price; leave plenty of room for profit. Trying to run razor-thin margins will only burn you out and reduce the quality of your service. Your advantage is a more personal touch. Someone needs help installing a scripts? Walk them through it. Server load is too high? Don't immediately try to sell an upgrade -- try to figure out the problem and see if you can remedy it without expensive solutions. Know your customers by name. If you have so many customers you can't know them by name (that'll be the day!), keep a giant database of customer info. I don't mean contact info -- I mean personal touches, things you pick up in conversation. I believe that people will apprecaite these things, and that adds tremendous value to your services.

Originally posted by dbbrock1
You can get a 100 megabit line from cogent for about $3000/month.

:rolleyes: I know. thats not the point (i was asking about the market). I will regret saying this but I dont think I would run a business JUST on cogent.

hmm,

the one server we have with rs is doing over 300gbs a month now. so yes, some people do use it.

cheers,
paul

Wow -- you're pushing that to the limit. :) However, my (non-hosting-related) server running 60gigs/months on RS compensates, and it all averages out. I wish I could find some good statistical usage studies, so we could all pour over the hard numbers.

How many people would host on a cogent only line if the server included a lot of bw?

Originally posted by MaB
Hi guys,

Quick question: How's the dedicated server market?

Do I have any chance of competing (assuming 24/7 (phone) support, state of the art NOC and fast connections) with a company like rackshack who can offer 400G (pracitcally a t1) for $99/mo? - is there any room for competition? Is it worth putting the time and effert into running a server business (and/or a datacenter)?

Thanks

It depends on who you're marketing your servers to. What I mean is, some dedicated providers cater to people's different needs: (eg: Managed servers, Budget servers, Windows servers, etc...)

Rackshack is pretty much budget. They market their servers to people who just need a server with bandwidth (and lots of it!)

Then you've got Rackspace. Rackspace is on the oppisite end of the spectrum, (Completely managed servers.) Rackspace costs as much as two times more than rackshack, yet they still have a pretty fat customer base.

RackShack is pretty much dominating the budget server market, (there isn't much headroom there) but maybe if you go for high end managed servers, you'll find it a bit easier to breathe.

I don't know, that's just the way I see it. I could be totally wrong...:)

sounds pretty right to me, rackspace and rackshack are both tough to compete with :(

Absolutely! If you can provide an excellent product at fair pricing, find a niche and go for it. Don't try to compete with RS as they have way more resources than you and will win the price battle.

Know your strengths and find customers willing to pay for those strengths. You won't grow at a RS pace, but you can build a respectable business if you are smart about your offerings and diligent about meeting your promises.

Good luck!

now here comes the critical question:
Can i run a server biz just on cogent? I doubt they will tank, they have a huge line of credit from cisco, they (hopefully) should be profitable next year and most importantly, i want them to stick around :)

Is it true their network is 2nd par, does anyone have a 100mbps line with them and has experienced(s) serious issues? 1,2,3 issues are normal even with dedicated circuits like t1, but i mean is there a constant lag or is that just made up by people who dont want to accept that some people with cogent pay less than them?

Thanks

Originally posted by MaB
now here comes the critical question:
Can i run a server biz just on cogent? I doubt they will tank, they have a huge line of credit from cisco, they (hopefully) should be profitable next year and most importantly, i want them to stick around :)

Is it true their network is 2nd par, does anyone have a 100mbps line with them and has experienced(s) serious issues? 1,2,3 issues are normal even with dedicated circuits like t1, but i mean is there a constant lag or is that just made up by people who dont want to accept that some people with cogent pay less than them?

Thanks

not that im on the cogent bashing bandwagon but im not sure how you can think they they will be profitable in the next year . based on their 2001 filings they had sales of just over 3 million and operating costs of 64 million that will take quite some doing to turn that around. just as a side note their 5.00 per share price has tanked to 39 cents that means they could be bought up for a meager 1.36 million bucks. if their shares hit 10 cents or lower you can bet their creditors will be forcing them into CCAA its happened to just about every other company thats traded, so i guess my answer is no you can not create a cogent only business and survive.

Steve

I won't speak to Cogent's business model or profitability as I haven't seen the numbers but as far as the network itself goes they're fine.

Like anything else though. It depends on where you are. Look at thier network Map. Look for the point all the lines come together. That's where you want to be. Actually, for Cogent you want to be in Dallas or Kansas City. (in case you can't find the points on the map)

Take my Cogent pipe for example. I'm located two floors above the main Cogent NOC in KC. If something were to happen I can take the elevator or stairs down two flights and knock on the door. In the last six months I've been using them I haven't has a single minute of downtime and my speed is good.

Again, it all depends on where you are and how you use it.

Aaron

I'm in ny. but damn, id like to be 2 floors above them :)

I personally wouldn't run a webhosting business customer's rely on on any single provider solution, whether it was Cogent, Internap, or Starfleet's subspace frequency. It's just too risky.

Greg Moore

I hear that. However, sometimes, when we dont have $10M in VC, its just too costly to build a dc with mutiple lines and stuff. We started hosting on a t1 from a single provider (bell) and grew from there. We hope to grow from the cogent, and we plan to. However, look at worldcom and qwest. If they went down the drain, any telecom can....