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  1. #1

    Quality service vs. Quantity service?

    Is it really better to offer a more quantity service(more space, bandwidth, bad support, etc vs. less space, bandwidth, better support, etc.) vs. a quality service?

    My logic behind this is by looking at the big boys - Hostrocket, powerweb, 1and1, etc. Yes, there are a few sucessful quality hosts, but i'd say the majority of the big boys are the quantity hosts.

    Opinions?
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  2. #2
    Good question, right now i am doing quality service instead of quantity service. I am interested in finding out which is better business wise.

  3. #3
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    Well I've seen first hand that Quantity sells its self.. where as for quality it would take a lot harder to work on...

    -Chris

  4. #4
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    But take a look at some of the other big boys, maybe the less prominant ones (httpme for example) who are quality hosts, and they seem to be doing just as good.

    Quantity hosts need to market/advertise constantly in order to keep getting clients. Quality hosts just need to do their thing (provide quality) and the clients will come in droves via word-of-mouth.

    Personally, I would rather have good word-of-mouth referrals than a banner on WHT for a couple months.

  5. #5
    As a customer, I'll say that Quality is all that important and what sets a good site from the others.

    With Quality service, you do not need to work too hard to promote your business because when you have satisfied customers, they will be your agents who would promote your business for you. 3rd party first-hand experience and review would be value above what the web host own's claims.
    http://www.batchimage.com - Offering Batch Image Processing and TIFF/PDF Software Solutions

  6. #6
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    Re: Quality service vs. Quantity service?

    Originally posted by dbbrock1
    Is it really better to offer a more quantity service(more space, bandwidth, bad support, etc vs. less space, bandwidth, better support, etc.) vs. a quality service?

    My logic behind this is by looking at the big boys - Hostrocket, powerweb, 1and1, etc. Yes, there are a few sucessful quality hosts, but i'd say the majority of the big boys are the quantity hosts.

    Opinions?
    If you want to be "big" then I guess quantity is the key .

    But as a 'quantity host' you have to take immense care about quality of your services and about automating everything you can. Otherwise you will not survive heavy growth.

    Customer Support is very difficult, too. Servicing 100,000+ or even 1,000,000+ customers is a very special task. You need a perfect organisation behind that.
    Andreas Gauger
    Chairman of the Board
    1&1 Internet Inc.

  7. #7
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    I would imagine that it would be very difficult to host 100,000 sites and be considered a quality host. With that many clients, there will have to be some that are unhappy for one reason or another. It would also be very difficult to have any personal relationships, something that I see most quality hosts doing.

    Just my thoughts, I've still got a couple hundred thousand accounts to go before I really have to worry about this....
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  8. #8
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    From what I have been reading seems Quality would be better then Quanity.

    I would rather have a client paying $20.00 then 10 clients paying $2.00.

    Though when you have Quality Clients they exspect to have Quality Services, and Quality Support.

  9. #9
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    Everyone has different views on this. Personally, I prefer quality over quantity anyday. Why? In the end, your work will be paid off and your clients will be happy with the service and support in which you give.

  10. #10
    It would definitely be difficult but it is not impossible. I believe as long as the tech support and service quality grows at the same rate as the sales growth, it will work out fine.

    From what I understand here, 1&1 targets local markets and supports them, in this way they could control their growth while still providing the needs of the local market.
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  11. #11
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    Quality service, or find a place in the middle

  12. #12
    I certainly do not define the *big boys* by the number of servers or clients they have. In my opinion the *big boys* are the ones that remain debt free and have the largest numbers in black ink at the end of the year. They are probably not the ones in your list either...

    Which million dollar company is more intelligent, the Company that grosses $10,000 per server with 100 servers and 1000 clients or the company that grosses $1000 per server and has 1000 servers with 10,000 clients? Which one would have lower overhead? Which one has fewer clients resulting in less support issues? Which one has the better profit margins?

    Intelligent consumers want and will pay for quality....

  13. #13
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    I was waiting for a discussion on this....sorta fits my title

    Through my experience Quality clients will always be better in the long run than quantity clients. Quality realizes the service offered while quantity is only looking for the better deal, and could move at any time.
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  14. #14
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    When we first started out, we concentrated on business clients who would pay us up to $200 a month for hosting and support. That gave us a good base from which to grow and we have been in the black since Day-1.

    Last year, we decided to go into retail hosting and determined that we had to have value pricing to attract the kind of customer we were going after now. That has worked out very well also and we continue to see growth and profitability.

    I think it is very possible to provide good service and a good value at the same time in the hosting business. That's what we aim for and I would like to think we are keeping our customers happy by doing so.
    Mark Oberg
    Techweenies.com

    (No longer affiliated with Uneedawebsite.com)

  15. #15
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    Re: Quality service vs. Quantity service?

    Originally posted by dbbrock1
    Is it really better to offer a more quantity service(more space, bandwidth, bad support, etc vs. less space, bandwidth, better support, etc.) vs. a quality service?

    My logic behind this is by looking at the big boys - Hostrocket, powerweb, 1and1, etc. Yes, there are a few sucessful quality hosts, but i'd say the majority of the big boys are the quantity hosts.

    Opinions?
    I say do both -- provide quality service in large volumn. Make money
    and keep your customers happy at the same time. Win, win, win.
    ---
    Dan Ushman
    Co-founder & CMO
    SingleHop, Inc.

  16. #16
    Originally posted by Torith


    I would rather have a client paying $20.00 then 10 clients paying $2.00.
    I don't think that's a valid statement in this case. I would rather have:
    100 clients paying $10/month
    vs.
    5 clients paying $100/month
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  17. #17
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    It works both ways.

    You can argue that having more clients makes you less hurt if one
    or two of them leave.

    Or you could argue that having less clients is less worth thus more profit.

    Dan
    ---
    Dan Ushman
    Co-founder & CMO
    SingleHop, Inc.

  18. #18
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    Originally posted by dbbrock1
    I don't think that's a valid statement in this case. I would rather have:
    100 clients paying $10/month
    vs.
    5 clients paying $100/month
    Couldn't have said it better... or ... maybe:

    1000 clients paying $5/month
    vs.
    5 clients paying $100/month
    Andreas Gauger
    Chairman of the Board
    1&1 Internet Inc.

  19. #19
    Originally posted by gaugi
    Couldn't have said it better... or ... maybe:

    1000 clients paying $5/month
    vs.
    5 clients paying $100/month
    How is that a comparison? If you would like to even it out so the end result were the same then what would your reply be?

    1) 1000 clients paying $5 a month = $5000 and a lot of overhead to cover support for those 1000 clients.

    2) 50 clients paying $100 a month= $5000 and the overhead for support would be 5% of what the first scenario would be.

    I know which of these scenarios I would prefer...

  20. #20
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    Originally posted by Watcher_TVI
    How is that a comparison? If you would like to even it out so the end result were the same then what would your reply be?

    1) 1000 clients paying $5 a month = $5000 and a lot of overhead to cover support for those 1000 clients.

    2) 50 clients paying $100 a month= $5000 and the overhead for support would be 5% of what the first scenario would be.

    I know which of these scenarios I would prefer...
    Watcher, I think this is one of the many cases where you probably
    shouldn't argue. 1and1 has over two and a half million clients. You
    most likely don't have more than a few hundred. I think they know
    what they are doing

    Dan
    ---
    Dan Ushman
    Co-founder & CMO
    SingleHop, Inc.

  21. #21
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    Originally posted by Watcher_TVI
    How is that a comparison? If you would like to even it out so the end result were the same then what would your reply be?

    1) 1000 clients paying $5 a month = $5000 and a lot of overhead to cover support for those 1000 clients.

    2) 50 clients paying $100 a month= $5000 and the overhead for support would be 5% of what the first scenario would be.

    I know which of these scenarios I would prefer...
    You are absolutely right.

    It is just my experience, having two different brands in Europe: 1&1 (low price) and Schlund + Partner (premium products) that revenue *and* profit are much higher on the budget side.

    It might be completely different in the U.S.
    Andreas Gauger
    Chairman of the Board
    1&1 Internet Inc.

  22. #22
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    Originally posted by gaugi
    You are absolutely right.

    It is just my experience, having two different brands in Europe: 1&1 (low price) and Schlund + Partner (premium products) that revenue *and* profit are much higher on the budget side.

    It might be completely different in the U.S.
    And you lose less money due to churn when a customer leaves
    if they only pay you $5 a month rather than $50.

    Snap!
    ---
    Dan Ushman
    Co-founder & CMO
    SingleHop, Inc.

  23. #23
    Like I said earlier Dan, I don't judge the success of a company by the number of clients they have, I judge them by their profitability. Enron was living proof that bigger does not necessarily mean profitable and only a fool would think otherwise....

    I'm not saying that 1&1 is or isn't profitable, you don't get to be their size without taking in a lot of revenue that's for certain. However this is just basic business 101. Lower overhead, higher revenue equals higher profit margins.

    I have no clue as to what the market is like overseas. It may very well be that by sheer volume of people wanting budget hosting those lower cost hosting offerings are the way to go. It's my belief in the US that quality and reliability of the services for many small to mid-size businesses are much more important than the cost of those services (within reason of course). That doesn't mean there are not thousands of people out there wanting to give up $5 a month for hosting, I know they are out there too.

    Personally, I would rather do 6 figures with a dozen servers as opposed to 100 servers along with the added responsibility of all the people necessary to run those 100 servers.

  24. #24
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    Originally posted by midphase-Dan
    And you lose less money due to churn when a customer leaves
    if they only pay you $5 a month rather than $50.

    Snap!
    If churn is practically nonexistant, then it really isn't even an issue.

    It makes more sense to me to work to satisfy and retain your existing customers who will subsequently spread the word about your company via word-of-mouth, than to constantly try to make up for lost customers by trying to attract large quantities of new signups through extensive advertising/gimmicks/whatever the case may be.

    Of course, different companies have different business models. Some shrug off churn/lost customers as a mere consequence of doing volume, while others place a greater value on their customers and do everything they can to keep them happy so they want to stick around.

  25. #25
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    Originally posted by Watcher_TVI
    Like I said earlier Dan, I don't judge the success of a company by the number of clients they have, I judge them by their profitability. Enron was living proof that bigger does not necessarily mean profitable and only a fool would think otherwise....

    I'm not saying that 1&1 is or isn't profitable, you don't get to be their size without taking in a lot of revenue that's for certain. However this is just basic business 101. Lower overhead, higher revenue equals higher profit margins.

    I have no clue as to what the market is like overseas. It may very well be that by sheer volume of people wanting budget hosting those lower cost hosting offerings are the way to go. It's my belief in the US that quality and reliability of the services for many small to mid-size businesses are much more important than the cost of those services (within reason of course). That doesn't mean there are not thousands of people out there wanting to give up $5 a month for hosting, I know they are out there too.

    Personally, I would rather do 6 figures with a dozen servers as opposed to 100 servers along with the added responsibility of all the people necessary to run those 100 servers.
    I think it is time to stop arguing here.
    ---
    Dan Ushman
    Co-founder & CMO
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  26. #26
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    Originally posted by Eric Radtke
    If churn is practically nonexistant, then it really isn't even an issue.

    It makes more sense to me to work to satisfy and retain your existing customers who will subsequently spread the word about your company via word-of-mouth, than to constantly try to make up for lost customers by trying to attract large quantities of new signups through extensive advertising/gimmicks/whatever the case may be.

    Of course, different companies have different business models. Some shrug off churn/lost customers as a mere consequence of doing volume, while others place a greater value on their customers and do everything they can to keep them happy so they want to stick around.

    When you do any kind of real volumn (more than a few dozen new
    clients per month) you will realize that churn will happen no matter
    how good your service is. People are people, and every person has their
    own reasons.

    Why not keep churn down while pushing advertising and generating
    new business? I never quite understood the Web Hosting Talk mentality.

    Dan
    ---
    Dan Ushman
    Co-founder & CMO
    SingleHop, Inc.

  27. #27
    Quote Originally Posted by Eric Radtke
    Of course, different companies have different business models. Some shrug off churn/lost customers as a mere consequence of doing volume, while others place a greater value on their customers and do everything they can to keep them happy so they want to stick around.
    This is only true when you place the same value on your clients as your clients place on the services they receive from you. I agree with you in that churn can be almost non-existent depending on the markets you target...

  28. #28
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    Originally posted by Watcher_TVI
    Quote Originally Posted by Eric Radtke
    Of course, different companies have different business models. Some shrug off churn/lost customers as a mere consequence of doing volume, while others place a greater value on their customers and do everything they can to keep them happy so they want to stick around.
    This is only true when you place the same value on your clients as your clients place on the services they receive from you. I agree with you in that churn can be almost non-existent depending on the markets you target...
    Churn can only not-exist when the number of customers you
    serve is tiny. If you serve thousands of customers, a few will
    cancel and there is nothing you can do about it.

    You can know their entire life stories and know when their kids
    birthdays are, but it still won't do you any good if they all of a
    sudden decide that they just dont want to have a website any
    more. Or if their business goes out of business.

    Let me ask you something, Watcher. Do you have any plan or
    hope for growth, meaning do you ever want more than the few
    hundred clients you host that have taken you years to build up,
    or are you content with the small numbers you are at?

    I say never settle Grow and never stop pushing. Otherwise, you
    will be stuck.
    ---
    Dan Ushman
    Co-founder & CMO
    SingleHop, Inc.

  29. #29
    You're so obviously blinded by the numbers mentality that you don't even see the most important question. If I make the same amount of money as a Host that has thousands of clients and hundreds of servers and I only have a handful of servers and a couple hundred clients who's to say what's better? While I go out and enjoy life those numbers chasing hosts are locked into their chairs staring at monitors dealing with one crisis after another.

    The quality of my life is more important than the number of clients I host. Just like the quality of the service I provide is more important than how many I provide that service to.

    Maybe you'll understand that some day, then again maybe you won't....

  30. #30
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    Originally posted by Watcher_TVI
    You're so obviously blinded by the numbers mentality that you don't even see the most important question. If I make the same amount of money as a Host that has thousands of clients and hundreds of servers and I only have a handful of servers and a couple hundred clients who's to say what's better? While I go out and enjoy life those numbers chasing hosts are locked into their chairs staring at monitors dealing with one crisis after another.

    The quality of my life is more important than the number of clients I host. Just like the quality of the service I provide is more important than how many I provide that service to.

    Maybe you'll understand that some day, then again maybe you won't....
    Personally, if not constantly pushing to do better, succeed more,
    I feel like a failure and don't have quite as good of a life

    Ok, I'm done with this generally pointless arguement.
    ---
    Dan Ushman
    Co-founder & CMO
    SingleHop, Inc.

  31. #31
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    Originally posted by Watcher_TVI
    You're so obviously blinded by the numbers mentality that you don't even see the most important question. If I make the same amount of money as a Host that has thousands of clients and hundreds of servers and I only have a handful of servers and a couple hundred clients who's to say what's better? While I go out and enjoy life those numbers chasing hosts are locked into their chairs staring at monitors dealing with one crisis after another.

    The quality of my life is more important than the number of clients I host. Just like the quality of the service I provide is more important than how many I provide that service to.

    Maybe you'll understand that some day, then again maybe you won't....
    Would u consider us a budget host? I for one am certainly not locked in my chair. I was much moreso when we were smaller.

    -Brendan

  32. #32
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    Ok, speaking from experience as a budget hosting provider....

    With over 1000 clients hosted in our first year, no support is not burdensome. At most 3 support issues per day, usually during the morning. If you call that support overhead burdensome...well what kind of clients do you host? The rest of the time is spent marketing, pondering how to improve service, adding new features, improving automation...etc.
    Crisis....What Crisis?

    Watcher, how can you say you know what budget hosting is like if you haven't done it, seriously.

    We've been on both sides, the very expensive and very cheap. The very expensive in fact is more support, thus the clients pay for it. The very cheap is generally quiet on the support side, and rightfully so.

    If you take the churn rate factor in - and it does happen - Having 1000 $5 accounts or 50 $100 accounts, who's better off? And should a meltdown occur - yes those happen as well despite the most well made plans of mice and men - who's better off? Getting back those 10 or so $50 clients you've lost will take time.

    Are lots of servers really that much of a bother? Sure you need to upgrade them, keep them secure, but how long does that really take out of a day, or even a week?

    Having made my point....I now bow out of this argument that I agree is really quite pointless.
    Last edited by HostingDotExpress; 01-28-2004 at 02:42 AM.
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  33. #33
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    David,

    I don't know what you are smoking, but when we signed our first
    1,000 clients (given it didn't take anywhere near a year) we had
    many, many more than 3 tickets per day. I'd say 3 tickets per hour
    and that during a slow time.

    Brendan is right -- budget hosting = big money and big profits. Same
    thing that 1 and 1 was talking about. And when done right, it also can
    be low churn and high customer satisfaction.

    Dan
    ---
    Dan Ushman
    Co-founder & CMO
    SingleHop, Inc.

  34. #34
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    You had more money to spend
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  35. #35
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    How much you spend really isn't the question - I'm wondering
    what you did so that you didn't get a whole butt-load of support
    requests
    ---
    Dan Ushman
    Co-founder & CMO
    SingleHop, Inc.

  36. #36
    Originally posted by midphase-Dan
    How much you spend really isn't the question - I'm wondering
    what you did so that you didn't get a whole butt-load of support
    requests
    Yeah me too. If I could get my tickets down to 1000clients/3 tickets per day on a BUSY day I could handle tech support myself.
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  37. #37
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    We offer many ways for our customers to learn to use their account. There is little to no technical jargon used. We keep is simple stupid

    Sure we get the odd client who believes hosting is simply a button to push, and then we show them where they can go to purchase software that will allow them to do that.

    Demodemo tutorials, helpdesk, knowledgebase, Live Help for quick questions. Most of these people are not looking for the latest and greatest in technology. They just want their own little portal on the web, nothing more. We gauge the popularity of certain features. If it's going to take up valuable support hours to teach these people how to use a product or if it poses a threat to your service, why offer it? Why work around it for a couple people?

    If you're answering support due to server problems, well then change the software you're using on them.

    Don't offer scripting services, unless you charge for them. Valuable time is wasted fixing problems that shouldn't be a technicians job. If a client asks how to create a form, or install a certain script, be outright, tell them it's an hourly fee. They'll understand, and if they don't, well they weren't a quality client. Scripting costs money.

    Costs are cut through automation, and efficiency. Tickets are closed after 1 or 2 replies. Not 10, or 20 replies.
    If you've been in the service industry long enough you begin to realize and predict exactly what a client is asking before they ask it. When you're in the hosting industry long enough, problems tend to be routine. You can read the ticket and know right away why something isn't working, you even make that quick 5 minute fix for the client and tell them what went wrong. The ticket is done, closed, and out of the way. And they never have the problem again because you told them why it occured, and how to avoid it.

    It all has to start when they get that first signup email. If it doesn't have the "mickey mouse easy to get started "information in it, well you just gave yourself a ticket to respond to, or several.

    Look at your support tickets, if there is a recurring problem, or question with new clients, why not send that info out immediately in that signup email. Simple changes can make big differences.
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  38. #38
    Greetings:

    When you compete on value, your main concern is ensuring your value stays consistent or increases in value in the eyes of your consumer.

    As long as you remain valuable to your consumer, your consumer will continue to use your products and services.

    When you compete on price, your main concern changes to ensuring you have a better price than your competition.

    While your consumer may fit within a bell curve where your price doesn’t have to be the lowest in the industry, you still have to fight to maintain your area within the curve less the consumer leave you to find some one cheaper.

    Very few companies, Wal Mart is one of them, can sustain a business model competing on price.

    While it takes greater start up effort to compete on value, and you still have to stay on top of things, competing on value provides a greater degree of sustenance than competing on price.

    In ending, as a provider, we try to focus on quality over quantity, on value over price, and we are always engaged in retaining and enhancing value to our consumers.

    Thank you.
    ---
    Peter M. Abraham
    LinkedIn Profile

  39. #39
    Originally posted by HRBrendan
    Would u consider us a budget host? I for one am certainly not locked in my chair. I was much moreso when we were smaller.

    -Brendan
    Yes I consider "u" a budget host. You also have proven my point for me.

    "I was much moreso when we were smaller."

    I am much smaller and I am not locked into my chair. I don't need 5000 clients or even 1000. I can (and will at some point) be able to close down sales and remain quite profitable and content servicing the clients I have. If you drop down to a few hundred clients you'll be locked back into your chair. On second thought with a few hundred clients at your plan costs and profit margins you would probably need to take on another job.....

    Quote Originally Posted by midphase-Dan
    How much you spend really isn't the question
    First you say in one thread that you are a firm believer that one needs to spend money to make money. Now you are saying it doesn't matter how much you spend? Which is it?

    Quote Originally Posted by Hostkookster
    Watcher, how can you say you know what budget hosting is like if you haven't done it, seriously.
    I know numbers. I know that in order to make the same profit margins I am making now, I would need 100 times the amount of clients, staff, resources and everything else (including headaches).

    Can you gve me one good reason why I should even consider adding all that extra aggrevation and pressure to make the same amount of money?

  40. #40
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    Hi all, I have been on these forums for a good amount of time now (not mentioning my sign up date) and I have to say, companies that have offered low price, good quality bandwidth and space have not done well, as there support lacks as they cannot afford to hire anyone, even though there bandwidth, system etc is of good quality. Those that offer cheap stuff all the way through still do not exist.

    However those that offer expensive, by this I do not mean £500 for something that can be obatined cheaply for £99. But £199 for a machine you can get elsewhere for £99. That extra £99 often re-asures you that:

    They have a network that is reliable & redundant - they must have spent the money on it or they would not be charging so much (unless money grabbers of course)

    There support is of good quality

    There bandwidth is of top quality and also redundant

    They will not lie to you, they give only what they wish to recieve etc etc

    They are the companies which succeed, they may have a few less clients, or maybe a lot less, but they would be payed more for the service (get more money) even though they will have to pay staff etc, they should effectivley get a good amount from it?

    Regards

    DislexiK


    AhH NOOO Still no word processor lads and girls, so bad spelling

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