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  1. #1

    Bare Metal Servers

    Hi Everyone,

    I am able to get server hardware and space in a colo facility pretty cheap and was thinking about offering bare metal servers with the following specs:

    Dual Intel E5-2640v2 8core 2.0ghz
    256GB RAM
    1TB SSD RAID1
    IPMI
    1Gbps Unmetered
    /28 of IP's
    Monthly: $1100

    Single Processor E3-1270v3 3.5Ghz 4core 3.5Ghz
    32GB RAM
    256GB SSD RAID1
    IPMI
    1Gbps Unmetered
    /29 of IP's
    Monthly $500.00

    I would allow the customers to install whatever OS they wanted via virtual CD mounts and IPMI. Do you guys think that the configuration/pricing is something that I could be successful in selling? I am pretty new to the hosting business and would love to hear what you all think.

    Thanks!
    Multicast

  2. #2
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    $500/m for the E3-1270v3 is "ok" since there's a 1Gbps unmetered port, if that's actually unmetered. I think your price is simply very high, and don't think it would work. Somewhere around half of that would be more realistic. You can get the same server without an unmetered port for around $170/m.

  3. #3
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    What market niche are you looking to target?

  4. #4
    Quote Originally Posted by leckley View Post
    What market niche are you looking to target?
    It would be in Los Angeles. The port really would not be metered. The customers could do whatever they wanted as long as they didn't do anything illegal or setup spam/DDoS hosts.

    I could change the server specs as well, its just for that level of hardware its pretty costly to me and with the costs of power/cooling/network I would have a tough time going lower in price. If you guys think that lowering the hardware/network specs to bring the price down is a better idea I'm totally open to that as well.

    As far as the niche that I was thinking about filling is the "do what you want niche". If someone wants to start up a VPS hosting business they can, or really anything that has very high cpu/mem/network/disk requirements that most hosting providers seem to charge more for. Or if someone with a small VPS business needs additional capacity they can use my servers to augment their existing capacity.

  5. #5
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    Quote Originally Posted by multicast View Post
    It would be in Los Angeles. The port really would not be metered. The customers could do whatever they wanted as long as they didn't do anything illegal or setup spam/DDoS hosts.

    I could change the server specs as well, its just for that level of hardware its pretty costly to me and with the costs of power/cooling/network I would have a tough time going lower in price. If you guys think that lowering the hardware/network specs to bring the price down is a better idea I'm totally open to that as well.

    As far as the niche that I was thinking about filling is the "do what you want niche". If someone wants to start up a VPS hosting business they can, or really anything that has very high cpu/mem/network/disk requirements that most hosting providers seem to charge more for. Or if someone with a small VPS business needs additional capacity they can use my servers to augment their existing capacity.
    Curious, what model of top rack switches will you running and how much capacity will each have to the outside world?

    You can certainly do the "generic host" approach, but you will have to come up with compelling reasons why a client will choose you over someone like FDCServers or 100TB.com who have been in business 10+ years longer than you and have better pricing that you can likely offer.

    LA also has a ton of providers...SoftLayer, FDC, 100TB, ColoCrossing, Quadranet, Gigenet etc. - they all operate in the generic hosting arena and all have been in business for 5+ years.

    The other thing to consider, if you are planning to sell 1Gbit unmetered of HE or Cogent bandwidth you are likely going to have a hard time. People like Quadranet & ColoCrossing will have better networks & bandwidth blends for same or better pricing.

    I would highly suggest you find a real niche to exploit, otherwise you will be fighting against all of us here, many of which have been in business for over a decade.

    Just my 2 cents.

  6. #6
    Quote Originally Posted by leckley View Post
    Curious, what model of top rack switches will you running and how much capacity will each have to the outside world?

    You can certainly do the "generic host" approach, but you will have to come up with compelling reasons why a client will choose you over someone like FDCServers or 100TB.com who have been in business 10+ years longer than you and have better pricing that you can likely offer.

    LA also has a ton of providers...SoftLayer, FDC, 100TB, ColoCrossing, Quadranet, Gigenet etc. - they all operate in the generic hosting arena and all have been in business for 5+ years.

    The other thing to consider, if you are planning to sell 1Gbit unmetered of HE or Cogent bandwidth you are likely going to have a hard time. People like Quadranet & ColoCrossing will have better networks & bandwidth blends for same or better pricing.

    I would highly suggest you find a real niche to exploit, otherwise you will be fighting against all of us here, many of which have been in business for over a decade.

    Just my 2 cents.

    Thanks for the feedback! The top of rack switches are actually a pair of 3750-X switches with 4 10GB uplinks(2 per switch). The upstream providers are a mix of HE, GTT, and Level3. The colo has 30Gbps of connectivity right now, but from what they can tell me they will add capacity anytime they hit 50% utilization.

    You actually make a very good point in that competing against companies that have been around for 10+ years I'm going to have to be more aggressive on my prices... If I was able to do:


    Dual Intel E5-2640v2 8core 2.0ghz
    256GB RAM
    1TB SSD RAID1
    IPMI
    1Gbps Unmetered
    /28 of IP's
    Monthly: $800

    Single Processor E3-1270v3 3.5Ghz 4core 3.5Ghz
    32GB RAM
    256GB SSD RAID1
    IPMI
    1Gbps Unmetered
    /29 of IP's
    Monthly $200.00

    Thanks!
    Multicast

  7. #7
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    Quote Originally Posted by multicast View Post
    Thanks for the feedback! The top of rack switches are actually a pair of 3750-X switches with 4 10GB uplinks(2 per switch). The upstream providers are a mix of HE, GTT, and Level3. The colo has 30Gbps of connectivity right now, but from what they can tell me they will add capacity anytime they hit 50% utilization.

    You actually make a very good point in that competing against companies that have been around for 10+ years I'm going to have to be more aggressive on my prices... If I was able to do:


    Dual Intel E5-2640v2 8core 2.0ghz
    256GB RAM
    1TB SSD RAID1
    IPMI
    1Gbps Unmetered
    /28 of IP's
    Monthly: $800

    Single Processor E3-1270v3 3.5Ghz 4core 3.5Ghz
    32GB RAM
    256GB SSD RAID1
    IPMI
    1Gbps Unmetered
    /29 of IP's
    Monthly $200.00

    Thanks!
    Multicast
    The E3 is not a bad deal, people will swipe those away from you; what are your plans when people push ~ 600Mbps on those boxes? Do you yourself have enough capacity from your provider? Would this break you?

    Friendly advice, you should offer SATA drives to keep cost low, no reason to by default offer SSDs, most people are ok with SATA and require the storage. SSD's should be optional.
    Last edited by Dustin B Cisneros; 12-30-2013 at 01:22 PM.
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  8. #8
    Quote Originally Posted by Dustin Cisneros View Post
    The E3 is not a bad deal, people will swipe those away from you; what are your plans when people push ~ 600Mbps on those boxes? Do you yourself have enough capacity from your provider? Would this break you?

    Friendly advice, you should offer SATA drives to keep cost low, no reason to by default offer SSDs, most people are ok with SATA and require the storage. SSD's should be optional.

    I wouldn't make any money on them though. Thats good advice on the SATA as well.

    What do you think about doing something like this:

    Single Processor E3-1270v3 3.5Ghz 4core 3.5Ghz
    32GB RAM
    1TB SATA RAID1
    IPMI
    100TB of Bandwidth
    /29 of IP's
    Monthly $250

    Single Processor E3-1270v3 3.5Ghz 4core 3.5Ghz
    32GB RAM
    256GB SSD RAID1
    IPMI
    100TB of Bandwidth
    /29 of IP's
    Monthly $300.00

    Single Processor E3-1270v3 3.5Ghz 4core 3.5Ghz
    32GB RAM
    1TB SATA RAID1
    IPMI
    100Mbps unmetered
    /29 of IP's
    Monthly $150

    Single Processor E3-1270v3 3.5Ghz 4core 3.5Ghz
    32GB RAM
    256GB SSD RAID1
    IPMI
    100Mbps unmetered
    /29 of IP's
    Monthly $200.00

    Something like that would allow me to make some money.... I want to be as competitive as I can, and I know I will have to earn the business since I'm new so maybe something like this will bring people in? As an option I could maybe do 1Gbps unmetered for an additional $300 to either of the 100TB plans.

    Thanks again for the feedback!

    Multicast

  9. #9
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    Do not compete on price if you want to be successful and it's good that you've taken the advice to keep your costs low.

    Those E3 seem to be around the current market prices which is good, so just work the numbers to ensure you can make a profit.

    Quote up some E5s as well, because if you're successful you'll have clients that will need more resources so you need to be able to provide this for them as well.

  10. #10
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    North Kansas City, MO
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    It looks like the niche you want to be in is high bandwidth with 1Gbit unmetered or 100Mbit. I would look at FDC or 100tb and see what they're offering as they have been in that area for awhile.

    I would echo the concern expressed about the bandwidth availability. My experience is that when people buy a server because it has a lot of bandwidth they intend to use it. Eacch switch could potentially use 48Gbits. Are you prepared for that and does your model scale for that?

  11. #11
    Quote Originally Posted by WII-Aaron View Post
    It looks like the niche you want to be in is high bandwidth with 1Gbit unmetered or 100Mbit. I would look at FDC or 100tb and see what they're offering as they have been in that area for awhile.

    I would echo the concern expressed about the bandwidth availability. My experience is that when people buy a server because it has a lot of bandwidth they intend to use it. Eacch switch could potentially use 48Gbits. Are you prepared for that and does your model scale for that?
    Hi Aaron,

    That's a very good point on the switch. Honestly the 3750-X won't cut it at those rates, however if I was to get past 30 customers I would plan to purchase a Cisco Nexus 3K series for top of rack switching. I just have the 3750-X's to get me started.

    What do you think about the pricing that I put down? Do you think that would be enough to attract customers? One of the large concerns I have is that I have the hardware sitting idle for too long since its a fairly large capex/opex expense to get started.


    Thanks!
    Multicast

  12. #12
    Quote Originally Posted by multicast View Post
    One of the large concerns I have is that I have the hardware sitting idle for too long since its a fairly large capex/opex expense to get started.
    That is a problem for all companies - especially new ones.

    If you have some good contacts in the bank you may be able to lease or
    rent the servers. There are companies that specializes in IT-leasing. It
    will of course be more expensive but you don't have to go broke to buy
    that new fancy server.

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