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  1. #1

    Why are servers in the US nearly 10x the price of identical servers in Europe?

    In Europe (OVH):

    Intel Bi Xeon E5606 2x4x2.13+ GHz CPU
    24GB Ram
    2x40GB SSD & 2x3TB HDD
    Hardware raid
    10GB/s bandwidth
    30TB data transfer (Once 30TB is used up, network connection is dropped to 100MB/s (I lied, they drop the connection to 10MB/s but still) with unlimited bandwidth, or another TB of bandwidth @ 10GB/s can be bought for 14/~$22 month)

    189.99/month (About $310)

    In the US (Softlayer):

    Intel Bi Xeon E5606 2x4x2.13+ GHz CPU
    24GB Ram
    2x50GB SSD
    NO hardware raid
    10GB/s bandwidth
    20TB data transfer

    $3000/month (I couldn't even get the same config as the EU servers)

    Why the huge difference? I get that servers in the US might be closer to customers, but by offloading media (Images, CSS, JS etc.) to Edgecast/Akami etc. CDNs (Nearly all cheaper than a US server) that shouldn't make more than maybe a few MS per request. And maybe datacenter land is more expensive in the US.

    And this isn't just that one provider, generally hosting in the UK can be anywhere from 5 to 20 times less than hosting in the US, depending on server specs.

    I've worked with both OVH and Softlayer before, OVH have superior support, free hardware replacement, generally more reliable hardware, better SLA etc. and are one of the leading hosting providers in Europe.

    This topic even goes down to (ugh) 1and1, their services in Europe are cheaper than in the US, even though I found my (very) old 1and1 server was actually hosted in the US

  2. #2
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    Quote Originally Posted by samarudge View Post
    I get that servers in the US might be closer to customers,
    I think servers are closer to end-users in Europe.

  3. #3
    i thought that US servers are much cheaper... I might change my mind about that.. I will search on the net to clarify that...

  4. #4
    Quote Originally Posted by interactive3d View Post
    I think servers are closer to end-users in Europe.
    Haha yeah fair point, but most of our users are in the US =)

  5. #5

  6. #6
    Quote Originally Posted by greatseeder View Post
    Because OVH is a budget hoster and Softlayer isn't
    I wouldn't say they were budget, their one of the largest dedi providers in Europe and quite a lot of providers resell them. And like I say, even 1and1 on identical services is cheaper in the UK/Europe

  7. #7
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    1) The main factor in the price is how much bandwidth they include by default. The difference is in the bandwidth pricing model, not in the base server cost. Compare it to a US provider that also pushes high bandwidth, like say 100TB and you can get the server for 1/3 the price as SoftLayer, without even contacting their sales people. Contact 100TB and FDC sales people and see what they can do. Sure, they probably won't match, but it'll be a LOT less then 10x the cost. Basically, OVH is including 30TB because they know 90%+ of it's users will never come close to using it, with SoftLayer, you're specifically buying more meaning you'll be using more. 100TB would be a much more fair comparison there.

    2) The hardware differences are really non-existant, the cost of the two configs is basically the same as you're comparing lower end $90 SSDs to high end SLC based drives that are ~$600 each.

    3) Support levels. Most US providers will provide 24/7 support, even if you're unmanaged. With European providers I have very often found it to be the case you can only get support 9-5 M-F if you're unmanaged, either that or support is extremely slow outside those hours or extremely slow in general. With the likes of SL you can expect very prompt service, always. Note: I don't have experience with OVH specifically, so yes, that is a general statement.
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  8. #8
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    Quote Originally Posted by samarudge View Post
    I wouldn't say they were budget, their one of the largest dedi providers in Europe and quite a lot of providers resell them. And like I say, even 1and1 on identical services is cheaper in the UK/Europe
    OVH is the cheapest you can find in Europe, they are definitely a budget provider. Comparing them with SL is not fair in any way.
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  9. #9
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    from what I know, usually servers are cheaper in US

  10. #10
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    You get what you pay for.
    You can't compare a premium provider with a budget provider, not good to compare that when only looking at the price

    There's always a difference, it all depends which market they are targetting.
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  11. #11
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    Quote Originally Posted by samarudge View Post
    I wouldn't say they were budget
    OVH is the king of the budget providers in Europe and should not be compared with premium providers.
    You basically take a Premium provider in the USA that has one of the highest prices and compare it with the cheapest budget provider Europe has to offer. Then you ask why prices in USA are so much more expensive then prices in Europe. Not fair really.

    Nearly all other providers in Europe will be more expensive then OVH
    Nearly all other providers in the USA will be cheaper then Softlayer

    Your not comparing apples with apples.
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  12. #12
    Quote Originally Posted by KarlZimmer View Post
    2) The hardware differences are really non-existant, the cost of the two configs is basically the same as you're comparing lower end $90 SSDs to high end SLC based drives that are ~$600 each.
    But with free hardware replacement, does this really matter?
    Also I've never had a drive failure on OVH, we had 4 severe failures on our 'The Planet' (Now Softlayer) servers and it took them 6 hours to replace a failed hot-swap drive.

    Quote Originally Posted by KarlZimmer View Post
    3) Support levels. Most US providers will provide 24/7 support, even if you're unmanaged. With European providers I have very often found it to be the case you can only get support 9-5 M-F if you're unmanaged, either that or support is extremely slow outside those hours or extremely slow in general. With the likes of SL you can expect very prompt service, always. Note: I don't have experience with OVH specifically, so yes, that is a general statement.
    Out of all the companies I've worked with (The Planet/Softlayer, Site5, Rackspace, 1and1, LiquidWeb) OVH has far and away the best support. Their SLA is 2 hours for 'priority' failures (Drives, network etc.) but I don't think I've ever had a ticket open for longer than 30 mins. Even non-critical things.

    Quote Originally Posted by Rens View Post
    OVH is the cheapest you can find in Europe, they are definitely a budget provider. Comparing them with SL is not fair in any way.
    Quote Originally Posted by swiftnoc View Post
    OVH is the king of the budget providers in Europe and should not be compared with premium providers.
    You basically take a Premium provider in the USA that has one of the highest prices and compare it with the cheapest budget provider Europe has to offer. Then you ask why prices in USA are so much more expensive then prices in Europe. Not fair really.

    Nearly all other providers in Europe will be more expensive then OVH
    Nearly all other providers in the USA will be cheaper then Softlayer

    Your not comparing apples with apples.

    I'll admit I used them as an example because they are the cheapest. But check out UK2.net (The company behind 100tb), ServerBeach UK (By PEER1) and many others, and you'll find the prices cheaper in the UK.

  13. #13
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    The OVH network relies heavily on peering. Even then, their network has 30 to 50 ms on average more on each route then most other European providers. This is well known.
    Their transit and non European traffic is limited and they simply admit that, it is not secret that they limit International traffic.
    The hardware SLA you speak about is only available on their top end range, lower end ranges have different SLA levels. All in all they are certainly not bad, but they should definately not be compared with Premium providers. They are a budget provider and in that market they do pretty well.
    You mentioned you worked with Rackspace, they are a full managed providers with very fast response times, how can it be that you feel their support is of less value then OVH support?
    Last edited by swiftnoc; 06-01-2011 at 01:36 PM.
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  14. #14
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    Even if we were to compare Apples to Apples in fair budget style stuff, you will still find that servers in the US is about 3-5X more expensive than compared to EU. However with that said, the problem is that not all carriers in US is actually as upgraded as in Europe. Cost in the US is far more expensive than EU.

    With that said, if you compare again Apples with Apples from US to Asia, then you will see about a 3-5X difference again. The reasoning here is the same as in the US previously. Not all carriers in Asia is willing to upgrade their Technology stuff to the latest when they have not much need to do it.

    This is basically something like saying "Nobody cares if we use technology which is 10 years behind, as long as it works and everyone is paying, profit is our bottom line". You guys basically get a connection of 1Gbps for $79.95 per month and yet we get only 4Mbps and we are basically paying %79.95 per month in Asia.

    With all that said, the biggest reason why you see such difference is because of competition. If there's only 1-3 ISP in any Asian country to begin with, they basically have the right to push their prices up. But when you get 10-30 ISP trying to compete for the same business, you will see prices lowered in order to get more clients.
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  15. #15
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    Quote Originally Posted by samarudge View Post
    In the US (Softlayer):

    Intel Bi Xeon E5606 2x4x2.13+ GHz CPU
    24GB Ram
    2x50GB SSD
    NO hardware raid
    10GB/s bandwidth
    20TB data transfer

    $3000/month (I couldn't even get the same config as the EU servers)

    Nice ROI they have - about 2 months. Ok, the 10GB/s network card and switch port are going to cost too, but still 20TB data transfer is just over 60Mbps average for a month.
    I would say this price is unreasonably high, no matter how good the service might be.
    Of course if you want to get an equally high price in Europe you will not have to look too long, there will be tons of providers willing to make you an offer

  16. #16
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    Intel Bi Xeon E5606 2x4x2.13+ GHz CPU
    24GB Ram
    2x50GB SSD
    NO hardware raid
    10GB/s bandwidth
    20TB data transfer

    $3000/month (I couldn't even get the same config as the EU servers)
    HOLY SH*T.
    You can buy that server for that price, and colocate it for like 150Gbp in UK...

  17. #17
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    You are being unfair comparing an the entire European industry to effectively two providers, OVH and Hetzner.

    These two companies are able to offer low hardware costs by providing:

    1) Homebrew Server Configs.
    2) Homebrew DC Designs (built to their 'budget' spec).
    3) Lights Out Operation.
    4) Extensive Automation (Large US providers have caught up here now).
    5) Relatively cheap power for Europe.

    See how far $300 goes for any kind of managed hosting service in the UK operating out a metro DC. You would be lucky to get anything at all.

  18. #18
    US/EU is good. UK is a LOT more expensive.

  19. #19
    It would be more fair to compare OVH to 100tb.com

    100TB obviously makes use of SoftLayer, never understood why the difference in price is so big between those two. But well pick one server from 100tb.com and go to SoftLayer and ask for a quote.
    For some reason for exactly the same setup SL tends to ask a way bigger figure.

    For me that's a big mistery. If you look at the management between those two, you'll notice that 100tb.com isn't unmanaged at all.. in factk, there are a lot of active support reps that'll respond to tickets in just minutes. So what does justifiy the difference in price between SL and 100tb.com?

    Looking at OVH, you'll notice that there is no such thing as ''Managed Support'' You can be lucky if you receive any type of support. Simple things can take over 24 hours to get solved. But as a budget hoster they'll have to cut in the costs somewhere, one of them is staffing. They try to automate nearly everything, which can be a huge advantage for people that know what they are doing. But for rookies, OVH might not be the right place to start.

  20. #20
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    Quote Originally Posted by greatseeder View Post
    It would be more fair to compare OVH to 100tb.com.
    The thing with OVH is that you need at least two servers for anything remotely serious because you cannot guarantee support/remote hands when you need it.

    That said, two servers at OVH might provide a lower cost and better availability/performance than a single managed server, even if one box does experience the occasional extended downtime.

  21. #21
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    Quote Originally Posted by topgun View Post
    The thing with OVH is that you need at least two servers for anything remotely serious because you cannot guarantee support/remote hands when you need it.

    That said, two servers at OVH might provide a lower cost and better availability/performance than a single managed server, even if one box does experience the occasional extended downtime.
    Well that's the thing. We should really be designing our sites/infrastucture around the concept of failure and how to minimize the effects. If there is one thing I've learned, it's that things happen.
    No matter if you're on low end or high end hardware (even entire datacenters have occasional glitches)

    As for the comparison between SL and OVH.. well others covered that one.

  22. #22
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    In theory you would expect the way that OVH is setup as a company to actually cost them more to run than other companies.

    They have call centres in each of their different territories, for instance, here in the UK we can call a UK number and speak to people located in London.

    The problem with this is that they actually have no power to do anything, they often just refer you to open up a ticket, or refer it over to Roubaix themselves.

    They are also a "Take it or leave it" type company with off the shelf setups that you cannot change (Unless you are on the very expensive range which all have large setup fees and start from 399/month)

    I don't know what their network is like these days. We used to use them, but don't anymore as we got complaints all the time about buffering, which we don't get with softlayer.

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