Results 1 to 12 of 12
  1. #1
    Join Date
    Jul 2002
    Posts
    3,352

    Question price raise and bw/hw

    just wondering with all the price raised by dedicated server provider...did hardware and bandwidth drop at all or did hardware and bw price rise? shouldn't the cost of bw and hw drop as technology mature thus cheaper dedicated server.

  2. #2
    There are more to bandwidth and hardware cost involved here, other costs such as salary, utility cost and other infrastructure cost should be added to the mix of the cost.

    I am sure you know oil prices went up and with that, utility bills would go up as well. With airconditioning, power supply to run the datacenter infrastructure and powering up the server 24/7 would indeed add to some substantial dollar too.

    At the same time, datacenters would be adding to its arsenal of tools and devices to combat DoS, Viruses and adding redundancy and new bandwidth pipes and probably new datacenter which would indeed add to the cost of doing business.

    Hardware and bandwidth prices are dependent on the vendors supplying those product and services. I don't quite see prices actually facing that drastically as of late. Hardware do get through its cyclical stages and at times there may be some shortages of components which might lead to price hikes, sometimes they run specials and prices may fall.

    It definitely is hard to say. There is simply too much parameters around.

    Personally, I believe that the hosting business although is technology based is still very much powered by human beings either in sales or support. Salary is one element which would rise over time because of pay increments and so on. And when that happens, prices would generally start going up.

    For the most parts, I do find that things are more expensive as the years go by.

    Of course if in the future, the web hosting business gets fully automated and you deal more with machines than human beings then probably you should see a sharp fall in prices but until that time, I wouldn't see much bottoming up of prices. Over the years, you probably get better and faster hardware but the bottomline prices would probably remain constant or rise.
    Last edited by eddy2099; 04-21-2005 at 12:20 PM.

  3. #3
    Join Date
    Nov 2004
    Location
    UK
    Posts
    774
    Good answer

    Just to add: hardware prices very rarely fluctuate, and are rather steady. There have been no big changes recently, apart from a nice drop in processor prices. Certainly nothing generally has gone up in price. There have been peaks in the past though (like around a year ago, memory went quite high), but it's rare.

    As far as bandwidth goes, I haven't heard about any price rises, but I don't really keep up with that market as often as I should.

  4. #4
    Join Date
    Oct 2002
    Location
    In a house
    Posts
    949
    I often think of when I first got into the industry, dedicated servers were expensive, clients had to know how to run one, and control panels were a *fad*. Adding in a DS3 was a huge PR, and getting it for $16k a month was a good deal.
    Over the years, pricing has dropped considerably, gave way to a new breed of hosting companies, and customers. Not well versed in server management, and price wars came about. Service levels dropped along with pricing, but people ultimately weren't happy. More "features" had to be added and integrated into your general customer interfaces, and goodies had to be included just to compete. More management and support is requested and almost required, and subsequently pricing increases.

    This is not to knock them, but let's look at the rise of the leader in the budget industry, EV1 formerly Rackshack. Even their pricing isn't the "lowest" anymore, but their service greatly increased over time. DC wide DDOS protection, KVM over IP's, Remote Reboot ports, all these things cost money, as do the programmers developing their internal systems for them. Fraud's up, chargebacks thrown around like changing ones clothes, and jumping ship for a 30 minute downtime in 9 months is common.

    Ultimately I think the consumer started dictating their own higher pricing, requesting more services instead of lower prices, giving them more opportunity to work within their means. Seems to be the market's back to quality vs. pricing, and IMHO that's a great thing to focus on.

    Just my .02

  5. #5
    Join Date
    May 2002
    Location
    Sunny California
    Posts
    1,679
    I've noticed a lot of dedicated server providers saying the same thing we're seeing... it's not that "hard" prices like bandwidth or server components have gone up, but that the support needs are more intensive.

    A lot of our customers are asking for things like hardware firewalls, remote reboot ports, remote console ports, etc. to be included in the price of their dedicated server. We're also seeing a rise in customers realizing that it's not worth their time to self-manage a server (especially when Linux system administration is not their background) and asking us to do this for them.

    We recently had a strategic planner do an intensive 2-day session with us (which is something I'd recommend to any growing hosting company.) One of my goals for the session was to find out which of our hosting plans was most profitable. We crunched the numbers for a few hours, and amazingly, we make a higher percentage margin on a $20/month shared hosting plan than we do on a $199/month P4 dedicated server. Why? Very little upfront cost for the shared hosting plan. Also, most people are familiar with shared hosting, so we get fewer support tickets for a shared hosting customer than we do a dedicated server customer.

    This has caused us to re-think our entire dedicated server model.. and I'm sure we're not the only dedicated server company that sees this. It's not worth it to our company to wait 3-4 months just to pay back the hardware costs on a dedicated server, while those 3-4 months are filled with support questions like "Why is perl taking up 99% of my CPU?" (Answer: you got hacked) or "I installed the latest version of exim and it broke my email" (because the customer didn't know what he/she was doing.)

    Is this the end of cheap dedicated servers? No, there will always be companies who use cheap dedicated servers as either a marketing tool or a loss leader. The big problem is support. I think we will definitely see a market adjustment in the "fully-managed" server sector, with prices going up as companies realize it's not profitable to offer "fully-managed" servers for under $100/month.

    The dedicated server market is maturing -- there aren't as many companies trying to "land-grab" and get as many customers as possible, and now it's all about providing better service. I see this as a good sign overall.
    Erica Douglass, Founder, Simpli Hosting, Inc.
    I founded Simpli Hosting, and sold it in 2007 to Silicon Valley Web Hosting after over 6 years in the business.
    Now I'm blogging at erica.biz!

  6. #6
    Join Date
    Jul 2002
    Posts
    3,352
    Originally posted by Simpli-Erica
    I've noticed a lot of dedicated server providers saying the same thing we're seeing... it's not that "hard" prices like bandwidth or server components have gone up, but that the support needs are more intensive.

    A lot of our customers are asking for things like hardware firewalls, remote reboot ports, remote console ports, etc. to be included in the price of their dedicated server. We're also seeing a rise in customers realizing that it's not worth their time to self-manage a server (especially when Linux system administration is not their background) and asking us to do this for them.

    We recently had a strategic planner do an intensive 2-day session with us (which is something I'd recommend to any growing hosting company.) One of my goals for the session was to find out which of our hosting plans was most profitable. We crunched the numbers for a few hours, and amazingly, we make a higher percentage margin on a $20/month shared hosting plan than we do on a $199/month P4 dedicated server. Why? Very little upfront cost for the shared hosting plan. Also, most people are familiar with shared hosting, so we get fewer support tickets for a shared hosting customer than we do a dedicated server customer.

    This has caused us to re-think our entire dedicated server model.. and I'm sure we're not the only dedicated server company that sees this. It's not worth it to our company to wait 3-4 months just to pay back the hardware costs on a dedicated server, while those 3-4 months are filled with support questions like "Why is perl taking up 99% of my CPU?" (Answer: you got hacked) or "I installed the latest version of exim and it broke my email" (because the customer didn't know what he/she was doing.)

    Is this the end of cheap dedicated servers? No, there will always be companies who use cheap dedicated servers as either a marketing tool or a loss leader. The big problem is support. I think we will definitely see a market adjustment in the "fully-managed" server sector, with prices going up as companies realize it's not profitable to offer "fully-managed" servers for under $100/month.

    The dedicated server market is maturing -- there aren't as many companies trying to "land-grab" and get as many customers as possible, and now it's all about providing better service. I see this as a good sign overall.
    a lot of dedicated provider that raise their price do not offer managed service. how about those of us who just want a machine in the internet and do what we want and will never open a support ticket regarding the server other than why the connection is down. is there a market for those of us know what he/she is doing?

  7. #7
    Join Date
    Dec 2004
    Location
    New York, NY
    Posts
    10,574
    Originally posted by jt2377
    a lot of dedicated provider that raise their price do not offer managed service.
    It still does apply as people seem to expect more from a provider at a cheaper price. The provider may be unmanaged but lots of unmanaged providers are happy to help their customers. EV1 tends to help a lot even though they are unmanaged.
    MediaLayer, LLC - www.medialayer.com Learn how we can make your website load faster, translating to better conversion rates for your business!
    The pioneers of optimized web hosting, featuring LiteSpeed Web Server & SSD Storage - Celebrating 10 Years in Business

  8. #8
    Join Date
    Oct 2002
    Location
    In a house
    Posts
    949
    Originally posted by jt2377
    a lot of dedicated provider that raise their price do not offer managed service. how about those of us who just want a machine in the internet and do what we want and will never open a support ticket regarding the server other than why the connection is down. is there a market for those of us know what he/she is doing?
    Sure there is, but there's also the spreading out of $ over new servers to also cover equipment costs, network upgrades, power upgrades, facility upgrades, etc. When we deployed the new foundry gear, I can tell you it wasn't cheap by any means, but we were able to absorb the costs. But you also have to price out for the masses as well, and the masses as of late have been wanting more & more.

  9. #9
    Join Date
    Mar 2003
    Location
    Saint Paul, MN
    Posts
    826
    Originally posted by jt2377
    how about those of us who just want a machine in the internet and do what we want and will never open a support ticket regarding the server other than why the connection is down. is there a market for those of us know what he/she is doing?
    Now, dedicated servers are not our thing (except for leasing them, heh), but I think that the bottom-end of the market for servers is eventually going to be ceded to unmanaged colocation. I *think* inexpensive unmanaged dedicateds can be a viable offering, but only two groups of people are going to buy them - people who know what they're doing and want a good deal, and clueless cheapskate newbies.

    That there's a market for inexpensive servers (I'm guessing) any host who's offered sub-$60 servers on WHT can attest, and anyone who visits hosting forums that allow requests has seen. Whether it's worth catering to this market, well... depends on the host, I guess.
    redpin.com - offering amazingly competent email, dns, and web hosting since 2002... because someone has to!
    Because Simple Things Should Be Simple - YouCANHasDNS

  10. #10
    Join Date
    Jul 2002
    Posts
    3,352
    Originally posted by Ankheg
    Now, dedicated servers are not our thing (except for leasing them, heh), but I think that the bottom-end of the market for servers is eventually going to be ceded to unmanaged colocation. I *think* inexpensive unmanaged dedicateds can be a viable offering, but only two groups of people are going to buy them - people who know what they're doing and want a good deal, and clueless cheapskate newbies.

    That there's a market for inexpensive servers (I'm guessing) any host who's offered sub-$60 servers on WHT can attest, and anyone who visits hosting forums that allow requests has seen. Whether it's worth catering to this market, well... depends on the host, I guess.
    i think you have a point regarding colo. colo your gear and pay for the bw and space might be cheaper than renting someone's servers.

  11. #11
    Join Date
    Dec 2004
    Location
    New York, NY
    Posts
    10,574
    Originally posted by jt2377
    i think you have a point regarding colo. colo your gear and pay for the bw and space might be cheaper than renting someone's servers.
    Well, when comparing bandwidth allocation it will not be cheaper. But, if you are a large company then, that is a very feasible option
    MediaLayer, LLC - www.medialayer.com Learn how we can make your website load faster, translating to better conversion rates for your business!
    The pioneers of optimized web hosting, featuring LiteSpeed Web Server & SSD Storage - Celebrating 10 Years in Business

  12. #12
    Join Date
    Nov 2002
    Posts
    544
    I hate to say this, but it is because you are becoming as rare as the DoDO...LOL

    The same reasons why the guy who uses 50GB of bandwidth subsidizes the guy who uses 1500GB...

    Customers are demanding more services and all of us are going to pay for them...Sorry.


    Originally posted by jt2377
    a lot of dedicated provider that raise their price do not offer managed service. how about those of us who just want a machine in the internet and do what we want and will never open a support ticket regarding the server other than why the connection is down. is there a market for those of us know what he/she is doing?

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •