How????

[nodehost]

Just want some word from other companies,

How the hell are some people doing $99 RAQ4's? These things cost over $1200 each, and at that price, it would take you a year to get your money back. This does not include the money you spend on bandwidth, support, etc.

How is this done?

 

[Alan Reynolds]

I havent figured out how they do it either. But I do have some in my network that people hav colocated with me or have payed a huge setup fee for one to lease it from us.

 

[hypernatic.net]

Rackshack's offer is THE most insane offer ever,
first, like nodehost said, a RaQ4i (about $1400) and above all that, 400GB of traffic!!
For 99 bucks? WOWWY!!

SOMETHING smells a lil' fishy here...

 

[Alan Reynolds]

I do beleive rackshack is using ensim(so are we) as their control panel, but i also heard from microsoft that they are changing a buttload of there servers over to windows xp.

 

[allera]

When you buy in bulk, the price comes down _significantly_. Anyone remember Vortech selling those Netra X1s a while back? They ended up selling them for $500 a pop (I think). I'm sure they paid around that for them, probably $100-$200 less.

Dell offers discounts on hardware if you spend $75,000 or more on them. Since we don't have that kind of cash, I don't know how "good" the discounts are, but I know that if you spend a large amount of money, you will get very nice discounts.

I wouldn't be surprised if RackShack buys (or bought) the Raq units for $300-$600.

 

[nodehost]

Trust me on this one, Cobalt thinks that they got the industry by the balls.

At the last company I was with, we were Cobalt True Blue Platinum, gazillion buyers, and the cheapest we ever got a RAQ for was $900. They just flat out do not give discounts to the buyers.

I thought about this also, and then remember how hard it was to deal with Cobalt being a business partner with them, much less an outside ISP trying to get a few RAQ's a month....

 

[Reyner]

I think if they have ******* and some setup fees, they should make profits in months. If you draw the diagram, the $99 price (Y) will be static and the growth of the customer and expenses (X) will take sometime to reach $99. I guess, they must have a low operation cost as well

Cheers!

 

[nodehost]

Still don't understand it.

As a ISP myself, I can not see how they even pay for their bandwidth with that. Unless they use cheap lines that really have no SLA's, etc......

 

[Vibe]

I would have to say for all small companies unlike rackshack they really make their profit on sign up fees. Some companies I have been looking at have sign-up fees around 500 dollars. Though for major companies like rackshack I agree with the above posts that they buy so many they get huge discounts.

 

[dektong]

Still don't understand it.

As a ISP myself, I can not see how they even pay for their bandwidth with that. Unless they use cheap lines that really have no SLA's, etc......

You guys need to remember, Rackshack does not pay for their bandwith because rackshack parent company, EV1 is an ISP. Or if they do pay for bandwith, their costs is very minimal, again because of EV1 being an ISP.

If you buy an OC3 or OC12 or GigE, most likely you will be billed by the 95th percentile of the maximum of either incoming or outgoing bandwith (not the sum of the two, unlike if you are being billed using average method). Now, being an ISP, you will get tons of incoming traffic (to your core router) from the people that use their internet to download stuffs to their computer (can you see this?). Hence, EV1 has plenty of outgoing traffic to spare, and as you all know, the outgoing traffic is very good for webhosting.

Thus, the dialup customers are the one that pays EV1 bandwith cost and rackshack get practically free ougoing bandwith at its disposal. So, rackshack can offer a dedicated server at $99/mo for 300GB or so because most of that montly cost will go to cover the server cost, not the bandwith cost.

cheers,
:beer:

 

[Reyner]

I wish I have my own data center