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  1. #1
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    W2Servers Confessions of a Budget Service Provider

    There are many ways I could start this post but I feel that the best place to start is by pointing at an illustrative example of something that happens all the time in this industry.

    http://www.webhostingtalk.com/showpo...14&postcount=1
    http://www.webhostingtalk.com/showpo...0&postcount=14


    Furthermore, while I have some personal conflicts about doing this I hope that everyone takes it in the spirit that it is intended. Therefore, my intent is not to slander or harm in anyway the person or the service that is the subject of my commentary. But to clarify and to reasonably approximate the situation as I see it and hopefully this whole episode can serve as a "teachable moment" for many customers and aspiring providers.

    There are several threads on the board filled with angry people regarding the situation with W2Servers the most recent of which are here:

    http://www.webhostingtalk.com/showthread.php?t=1035994
    http://www.webhostingtalk.com/showthread.php?t=1053201


    As and IaaS provider LeeWare Development provides back-end services for a variety of companies and services that operate Internet based services and applications. Basically, it is a niche based offering for Interactive / Transactional services and backup capacity for live systems. It is a value based offering As a technical consultant I do a lot of systems management work for dot-com and other technology oriented businesses. The bottom-line is much of my success comes from being effective and competent. Furthermore, I rely heavily on my customers being responsible, trustworthy and competent.

    Therefore, my business is structured around this reality and a lot of my pre-sales negotiation is geared towards setting the appropriate expectations for the customers. Which by the way is the reason I will always be grateful to FDCServers because they didn't try to sell themselves as something they were not. Hosting with them turned out to be a mistake for me for reasons I am sure others can understand but I take full responsibility for my decisions.

    The positioning of my product offering makes it very attractive to resellers. But my experiences with resellers always ended in disaster for reasons I didn't understand at first but quickly learned many years ago. This final case was no exception. Just to set the stage, I would have to go back in time several years 4-5. Learning from my previous experiences I decided that I would only accept resellers on a conditional bases and that is I would work closely with them to make sure that they would actually be providing a value-added service and in spite of my mentorship, these relationships ended in disaster and failure.

    The straw that broke the camels back regarding resellers for me is when I started to lose high-value customers running important applications because they had determined that the platform was too unreliable. When I looked at the root causes for system instability as well as constant fire-fighting 80%+ was based on reseller sub-customer activities. The usual suspects (bandwidth abuse (bittorrent-farms), spamming, in-coming DoS attacks, outbound Dos attacks, machine mis-configuration, security violations, phishing, farming, scanning, hacking) you name it. In response, I cleaned house and got rid of all of the resellers. System stability returned and some previous customers started to relocate assets again.

    From this point forward I pretty much referred people that were interested in reselling to BurstNet, JoesDatacenter and FDCServers as better alternatives for general purpose reselling.

    The next reseller I accepted onto the platform was a company that was able to demonstrate that they were providing a Value Added Service in terms of system management and support. Furthermore, they were doing a consolidation from more expensive or unreliable providers onto my platform in spite of my advice against this. I spent a lot of real money doing build outs for this customer because frankly I didn't believe that they would put on as many systems as they ended up putting on. Outside of the bumps in expanding to meet the demands of their growth everything appeared to be working well at first. But then the cracks started showing up. It turns out that this customer was offering reseller opportunities to his sub-customers and all of the problems I had worked hard to get rid of had returned system the RFOs for system instability were approaching 60%. I worked with this reseller to purge his customer base of problematic customers and to move others that were inappropriate for the service to other providers. Just around the time I broke even on my investments for this customer, I started getting messages from his sub-customers that he was unresponsive and that they needed help with this or that. Other than paying his bills on time and in full (good thing) I never had problems getting paid for stuff. His communication with me became sporadic. Finally, I received a message from some other person who had purchased the business. While I suspect that the original owner started out with good intentions something happened and he started with the "explosive growth" just so that he could pawn the company off on someone else. The new owner ended up acquiring a lemon that was upside down in all of its obligations basically the business had a lot of assets but not enough revenue to cover the on-going costs. So boxes and services were cancelled in mass across several providers and things were moved around between providers and until all was good and stable again.

    However, this was all too late for me as I lost more of my high-value customers and some of them were not going to come back. Fast forward to a little more than a year ago. When I received pretty good pitch from Lyron Foster and W2 Interactive. In spite of my serious reservations and my efforts to mentor him and offer a different kind of opportunity to him for which he could have gained financially, he choose to do it his way and While I think that this whole episode is a interesting case story and probably a really fascinating story for those who might be interested in the details. I don't know what is happening with W2servers and their other providers and I can only suspect the reasons their customers are suffering through abrupt service terminations has something to do with cash-flow issues.


    The only relevant facts are as follows:


    (1) Since W2 Interactive became a customer of LeeWare they have been staring down the barrel of a shotgun because I made it clear from day one I had a very low tolerance for irresponsible general purpose resellers especially when the activities of the reseller or his/her sub customers are disruptive to any portion of the service I provide to other customers or me personally. As a result of this, over the life of his accounts I have taken a hard-line approach with dealing with issues as they have come up. Which includes, (a) Permanently Dropping machines from the service that engage in illegal or abusive activities. (b) Applying global rate-limits and traffic controls where bandwidth abuse is detected. (c) Refusing to support unsupported operating system (d) Refusing to perform changes outside of defined windows (e) Charging for excessive changes. and (f) Performing service disconnection we payments are not paid in full when due.


    Therefore, sub-customers of the service might be under the incorrect impression that the service is "oversold" or "using crappy hardware" or that the provider is having technological problems etc. I don't know what he tells his customers and suspect that some of the public complaints I've seen about the service is related to the customer lack of imagination when it comes to the possibilities of why a service may fail or not perform the way they expect it to which goes back to expectations.


    (2) While I have communicated in private that I wanted W2servers off of my platform for more than 6 months and the reasons for this have been fully disclosed to them. I have out of the kindness of my heart and at the encouragement of my wife let this drag on for longer than it should have. On 06/14/2011 W2Servers were permanently disconnected from my system for repeated failures to meet its business obligations and my failure to learn that no good deed goes unpunished.


    In terms of my personal opinion of Lyron Foster and W2Servers, I do not think that he is a "scam artist." He may be too proud to admit failure which is more of an ego problem. I just think that as the first story illustrates he's in over his head. In his defense he did offer to pay to continue his services with me as he has done in the past but I refused to accept the payment encouraging him instead to use it to refund some of his customers.

    Finally, in terms of all of this talk about legal action and class-action-lawsuits let's be honest, no one is going to sue anyone. Just simply suck up your losses and move on.

    Hope this helps
    Lee Evans, Owner/Operator
    LeeWare Development
    Linux Dedicated Server Grids
    http://www.leeware.com

  2. #2
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    I don't know how you think noone is going to sue, or do anything about it but I personally have filed a chargeback, and I intend on getting my money back. If not, my bank will until he is drained. I have looked up business licenses in the state of Texas, and Hawaii, and I don't see a LLC, or any other deriviative of a business license which as far as I know then relies back on the owner. He should not have stated we would get a refund if he couldn't refund us. If he tries to start another business I WILL let my facts known. I have screenshots of every single communication, and emails of both invoices, and the message requesting a refund.

    If he doesn't refund me, or my bank I won't go away when he starts another business.

  3. #3
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    Quote Originally Posted by bluemer View Post
    I don't know how you think noone is going to sue
    The financial and opportunity cost of a lawsuit would likely exceed the value of any potential judgement.

  4. #4
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    I won't incur any charges for my bank coming after him/W2 Servers except $5.00.

  5. #5
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    A lot of banks are going to be handling a lot of disputes. I wonder if anybody at VISA or MasterCard will notice?
    Skeptic Hosting
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    Hosting by invitation only, nothing for sale

  6. #6
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    Quote Originally Posted by leeware View Post
    Finally, in terms of all of this talk about legal action and class-action-lawsuits let's be honest, no one is going to sue anyone. Just simply suck up your losses and move on.
    I couldnt argee more, I find the people moaning about being scammed are the ones who didnt do any due diligence before ordering.

    Rather still they just saw a cheap offer and jumped in head first.
    UK Based Proactive Server Management.
    Zabbix Enterprise 24/7 Monitoring.

  7. #7
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    Quote Originally Posted by cd/home View Post
    I couldnt argee more, I find the people moaning about being scammed are the ones who didnt do any due diligence before ordering.

    Rather still they just saw a cheap offer and jumped in head first.
    Point?

    The issue I am most aggravated about is the promise of a refund, and then not getting it. If you do a search on my posts you will see that 2-3 months ago I was complaining, and then I stopped. I was settled with myself to take it as a loss, and move on. I quit using the server at all, and just went on my way. However, he then sent an email about stating we could request, and receive a refund, and I was like alright well maybe they realized they f'ed up, and are going to fix it now. I'm not letting it go this time.

    Just like the old saying, "fool me once, shame on you, fool me twice shame on me".. I'm not getting fooled twice.

  8. #8
    Quote Originally Posted by bluemer View Post
    I won't incur any charges for my bank coming after him/W2 Servers except $5.00.
    The bank may pay you back, after which you have no further standing to sue.

    The bank itself is not going to sue someone for $1,000.

    And you can't launch a class-action suit - no attorney is going to take it because the money involved is so small, the overhead in such suits so big, and the defendant's likely assets probably wouldn't allow for recovery. If he took your money and spent it, then there's probably nothing to recover, sadly...

    Class action suits are about thousands seeking tens of millions of dollars, not dozens seeking thousands of dollars.
    raindog308
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  9. #9
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    Quote Originally Posted by raindog308 View Post
    Class action suits are about thousands seeking tens of millions of dollars, not dozens seeking thousands of dollars.
    No-one really knows how many victims are involved yet. They're only just beginning to appear. Here's another victim of W2Interactive out by $1000, and it's only early days yet

  10. #10
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    Lee,

    I really appreciate you taking the time to post this both to shed light on the W2 situation as well as generally the informative post about the dangers of reselling and unprofitable business models.

    You are right, no one is going to sue. It's a commonly heard refrain and to sue over losses for this is just throwing good money (and time) after bad. Your post should help people though.

  11. #11
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    Quote Originally Posted by bluemer View Post
    Point?

    The issue I am most aggravated about is the promise of a refund, and then not getting it. If you do a search on my posts you will see that 2-3 months ago I was complaining, and then I stopped. I was settled with myself to take it as a loss, and move on. I quit using the server at all, and just went on my way. However, he then sent an email about stating we could request, and receive a refund, and I was like alright well maybe they realized they f'ed up, and are going to fix it now. I'm not letting it go this time.

    Just like the old saying, "fool me once, shame on you, fool me twice shame on me".. I'm not getting fooled twice.
    The point is, If you dont do due diligence in this industry you run the risk of being shafted...

    Fool me once fool me twice, Generally if your going to be shafted you only get shafted once, In this case you already have, Time to move on...
    UK Based Proactive Server Management.
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  12. #12
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    Quote Originally Posted by cd/home View Post
    The point is, If you dont do due diligence in this industry you run the risk of being shafted...
    And Point #2 is if you DO get shafted talk about it - On reputable forums like WHT. Don't just walk away sulking and hiding your embarassment. Post about it so that if the same perpetrator comes back in xxx months time and tries it again, there's evidence available for others to find with their due diligence.

    I'll be the first to admit that I was shafted by Lyron Foster and W2Interactive, because my own due dilligence failed me. Hopefully, if enough of us do the same, we'll all leave sufficient data for future potential victims to find.

  13. #13
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    Quote Originally Posted by raindog308 View Post
    The bank may pay you back, after which you have no further standing to sue.

    The bank itself is not going to sue someone for $1,000.

    And you can't launch a class-action suit - no attorney is going to take it because the money involved is so small, the overhead in such suits so big, and the defendant's likely assets probably wouldn't allow for recovery. If he took your money and spent it, then there's probably nothing to recover, sadly...

    Class action suits are about thousands seeking tens of millions of dollars, not dozens seeking thousands of dollars.

    You are wrong, there are possibly other damages he can recover should he proceed with a lawsuit.

  14. #14
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    Quote Originally Posted by F-DNS View Post
    And Point #2 is if you DO get shafted talk about it - On reputable forums like WHT. Don't just walk away sulking and hiding your embarassment. Post about it so that if the same perpetrator comes back in xxx months time and tries it again, there's evidence available for others to find with their due diligence.

    I'll be the first to admit that I was shafted by Lyron Foster and W2Interactive, because my own due dilligence failed me. Hopefully, if enough of us do the same, we'll all leave sufficient data for future potential victims to find.
    Their is enough information around here for people to undertake due diligence from Lyrons previous mess of ByteFortress.

    So judging by his history/blog and the complete mess of ByteFortress am suprised people actually signed up to W2...

    My opinion is, Lyron started W2 to heap loads of money to pay off old clients who got burnt with ByteFortress, He'll probley come back into afew months and start another business to pay off the clients who got burnt with W2 aswell, The cycle will continue untill hes either locked up or dead...

    With my years of business experience and knowledge I do think he runs a pyramid scheme type structure where he has to continually sell servers so he can pay his providers on a monthly basis, Once sales drop so will service as their is no money to pay providers because its all been spent on hardware and the previous months colo... Any how thats just my opionion of his business model...
    Last edited by Server Management; 06-16-2011 at 07:39 PM.
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  15. #15
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    Quote Originally Posted by cd/home View Post
    So judging by his history/blog and the complete mess of ByteFortress am suprised people actually signed up to W2...
    Yeah. This time it was ME that should've gone to Specsavers

    Fortunately I didn't get ripped by anything like the amounts of money that other posters are talking about. I'll write the loss off as an "educational fee" and not loose any sleep over it

    You'll have to forgive me if you think I'm ranting about it - Maybe I'm just trying to help (prevent) future potential victims, or maybe it's because I'm worried that my TARDIS will land me in the wrong time and place and I'll screw up again

  16. #16
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    30 days for a refund?

    Either,
    A) They need 30 days to run away with your money.
    B) They need the cash and can't afford to refund clients immediately.
    C) OR, hopefully, they will return your money.

    I honestly don't know why they need 30 days to refund their customers. They claim they are understaffed, but even some of the slowest companies out there don't take that long. I've heard of 2-3 day refund delays, but 1 month?
    Last edited by TinyVox; 06-16-2011 at 07:49 PM.

  17. #17
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    Quote Originally Posted by F-DNS View Post
    Yeah. This time it was ME that should've gone to Specsavers

    Fortunately I didn't get ripped by anything like the amounts of money that other posters are talking about. I'll write the loss off as an "educational fee" and not loose any sleep over it

    You'll have to forgive me if you think I'm ranting about it - Maybe I'm just trying to help (prevent) future potential victims, or maybe it's because I'm worried that my TARDIS will land me in the wrong time and place and I'll screw up again
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  18. #18
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    Quote Originally Posted by TinyVox View Post
    I honestly don't know why they need 30 days to refund their customers. They claim they are understaffed, but even some of the slowest companies out there don't take that long. I've heard of 2-3 day refund delays, but 1 month?
    Apparently it's withheld for 30 days in case there's any spam complaints against the (non)service they shafted you for.

  19. #19
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    Quote Originally Posted by cd/home View Post
    Educational Fee
    My accountant claims to be "acrobatic" with the bookkeeping, which is why he's so good. I've not met the bookkeeper so I can't comment (although I've heard that she's cute)

  20. #20
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    Quote Originally Posted by F-DNS View Post
    Apparently it's withheld for 30 days in case there's any spam complaints against the (non)service they shafted you for.
    Is sounds like some BS to buy themselfs more time...

    Quote Originally Posted by F-DNS View Post
    which is why he's so good.
    Quote Originally Posted by F-DNS View Post
    (although I've heard that she's cute)
    Heshe?...
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  21. #21
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    Thanks Lee you helped me get my data back great news thanks again

  22. #22
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    Any chance of being able to keep paying you directly Lee for a service we had with W2Servers? I really loved my server it worked great for what I needed and was very economically priced. Please message when possible, thanks.

  23. #23
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    My take on this is that if you believe too much on people offering you servers at unrealistic prices and with good support and etc, you will soon notice that you will get something like this happening.

    Their prices were quite unrealistic and too cheap to begin with. From this experience, at least now people will at least know that when you talk about servers at unrealistic prices, you should start to beware. I know that looking for cheap servers is human nature but when someone comes out with prices which is "too good to be true" it usually spells TROUBLE.

    Thanks Lee for shedding light on this topic. I doubt that W2 will return the money and I'm taking a wild stab but they easily earned tens of thousands if they didn't return any money at all.

    Seriously speaking, if it is so easy to get tens of thousands, I would also like to start a company and do the same thing W2 did. It's easy money after all. Do it 3 times and you'll most probably be able to get a house bought in CASH for free.
    Aaron Ong
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  24. #24
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    To the people who have been asking both in private and public about continuing their services with me. Let me make a few comments for the record:

    1. Judging by all that has been happening surrounding the W2 brand according to what I've been reading regarding the impacted customers many of them were not hosted on my platform. Which means they were down and offline while I was still providing services for W2. Thus my comments about not knowing what is going on with W2Servers' other providers.

    2. My offerings are geared towards a niche market that needs a lot of computing power which means that (a) I don't sell individual units and If I did, they would be at a price point that would probably put them out of range for what seems to be the typical W2 server customer. Therefore, I would have to recommend BurstNet, Joesdatacenter or FDCServers.

    Those providers are probably a much better fit for the client types that used W2.
    Lee Evans, Owner/Operator
    LeeWare Development
    Linux Dedicated Server Grids
    http://www.leeware.com

  25. #25
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    Like many other I took advantage of this . Human nature I guess I got 2 of these I suppose if I am realistic over all it was no major loss. The loss would have been with Lee who it probably still "waiting". I am only pleased that I got access to my data and was able to satify my client. I wont do this again .

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