Results 1 to 9 of 9
  1. #1
    Join Date
    Aug 2002
    Location
    Scotland
    Posts
    125

    I still can't figure it out

    I've been lurking around these forums for the last few days, fascinated by the volume of postings, the help people provide, and the amount of expert help that is available.

    Like a lot of users, I've also been amazed (and a little depressed - cos we couldn't do it) at the prices and features some companies provide their services for. I've seen a few postings along the theme of "how do they do it?". I know companies oversell, but even then I couldn't see where the profits were coming from. I decided to put together a quick spreadsheet to see if I could figure it out.

    Unfortunately, I'm none the wiser. I created the spreadsheet so that it could take account of overselling (and add a contingency percentage - just in case!), decide how many users you wanted to recover the costs over, allow for different features to be added and costed, play around with various plans/configurations, and even allow for hardware replacements and maintenance charges/support time.

    I can't help feeling that some of the calculations I've made MUST be wrong, or the pricing models must have some fundamental mistake in them. I appreciate any feedback that anyone could give. You can download the spreadsheet at http://www.indigo-moon.co.uk/hostcostcalc.zip.

    It's a zipped XLS file. No macros but the sheet is protected (password 123456) just so you don't adjust any of the calculations.

    It was put together to account for Win2K and SQL Server licensing, and the bandwidth charges (at the top) are based on the "lumps" we can purchase it in but I'm sure you can just substitute what you would pay for these amount.

  2. #2
    Join Date
    Aug 2002
    Location
    UK
    Posts
    163
    The numbers you used are very unrealistic. For budget hosting, you can buy a 10 servers for say $5000, then colo them on a 10mbit (say effective transfer 2000gb at 60%) for $500/month

    Try putting those numbers in!

    Your bandwidth is listed as 20/gb and U space as 15/U. These figures are too high by far, especially the bandwidth.

    Cheers

  3. #3
    Join Date
    Aug 2002
    Location
    Scotland
    Posts
    125
    I can't argue when it comes to Free O/S's but I can't even buy 10 Win2K server licences for $5000 - they alone would cost me 7500 or $11250. Add in a Dual Proc DB Server for MS SQL and your talking almost $9,000 for the licences just for that. However, even with these sort of prices its obvious that hardware costs are only a fraction of the total cost and to a large extent are irrelevant to the equation.

    Bandwidth is expensive here and the cheapest 10Mbps we can get is 1000 (or $1500) per month, but even at $500 for a 10mbps line I can't figure it out.

    The 20 per GB doesn't really figure into the equation (althought it IS what we pay for over-using bandwidth) since the majority of the bandwidth cost was priced at 1 per GB. Even if I change the costing to 0.25 per GB (based on 2000Gb at $500) it still defies the pricing that I'm seeing here.

    If you base it on only 10% of actual bandwidth being used (i.e. 10 plans required to meet bandwidth traffic allowances), then some companies must be working on a knife-edge to make it work, are in for a nasty shock one day, or have little idea how much it actually costs.

    The results suggest that the only way to actually make it work is to purchase a reseller account. Then you don't have to worry about the server and costs, you just pay your monthly charge and let the poor so-and-so who is providing the server make it work for them.

    We do carry out hosting so this isn't a shot-in-the-dark. We only have about 1200 sites hosted on 9 servers and we've been around for over 3 years now, but our prices are WAY above what I'm seeing here. I was just trying to figure out how they make it work cos I'd love to offer these prices.

    I was looking to see if I was missing something in the calculations. You also have to remember that the calculation only covers the most obvious costs - and doesn't include making any actual profit.

  4. #4
    Join Date
    Jan 2002
    Location
    Boston
    Posts
    5,010
    If your using MS you will most likely be broke after the licenses and buying all the Tylenol you will need

  5. #5
    Lol, yes, I think you'll find that at least 90% of the web servers out there are Linux or BSD based... not only because of the license fees, but also because of remote management. I shudder at the thought of administering a Windows server without console access. Nothing's better than working from home.

  6. #6
    Join Date
    Aug 2002
    Location
    Scotland
    Posts
    125

    Post

    Yeah. I think I'll have to seriously consider another OS and MySQL. It kills me every time I purchase a licence that costs as much as a server.

    Don't get me started about the time we had to purchase 4 x MS SQL Server Enterprise processor licences for a quad processor server for a client. I had tears in my eyes that day.

  7. #7

    That worked a few years ago

    However, you must continue to move with the market and, frankly, your providers' pricing is now non-competitive. You really need to reevaluate your business model if you hope to remain viable.

  8. #8
    Join Date
    Aug 2002
    Location
    Scotland
    Posts
    125
    Thanks for your help. I've gone from stumpted and confused to completely dissatisfied in a matter of hours. Now I'm starting to get angry at the amount we are paying. If it wasn't for the bandwidth costs we'd be RICH (or cheaper).

    Open to offers for our latest servers http://www.webhostingtalk.com/showth...threadid=68338 might even consider giving US a try.

  9. #9
    Originally posted by PJamie
    I've gone from stumpted and confused to completely dissatisfied in a matter of hours.
    Welcome to WHT
    Jeremy [email protected]
    Front Drive Advanced multi-domain hosting solutions
    http://www.frontdrive.com/

Posting Permissions

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