Overselling Price
- Thread starter Artashes
- Start date
Blue said:
Do you mean GB, not MB?
I know its a touch call, but you see, I'm trying to figure out if a company was solely dedicated to selling only bandwidth. Set aside all other operational and product costs, I just want to see when a company is really going out of the line. Imagine we're in fairy tale when all other costs are $0) and there is only bandwidth that is important. In THAT case, how low in pricing can any company go?
There is vastly too much over selling in the web hosting community and because of this the quality of web hosting has gone down regarding customer service. A company with 1000 sites on one server charging $7.95 a month is not making enough money to properly support all the customers. I find it disgraceful how cut throat it has become.
-V
-V
<< What is the absolute minimum 1 GB of bandwidth could cost to a company? >>
As Blue says, this is a very difficult question to answer. You also, though, need to note what type of quality the bandwidth is. I have quotes from Hurricane Electric on their latest special being $0.08 per 1gb bandwidth, if you took 30,000gb bandwidth in total.
It also depends on how much you order. Some companies offer very cheap prices if you order in big bulk, such as Hurricane Electric. They've actually gone cheap than CogentCo at points if an extremely large amount was ordered. Although, when ordering only 300gb, they charge over $1 per 1gb.
Although, if you go to Aleron, MFN, InterNAP, Verio, Level(3) and so on - you'll find the prices go a lot higher.
<< I also suggest not REALLY oversell because 1000Clients to give support to will be very hard. >>
This, unfortunately, is what lots of people say - yet in certain circumstances it can be quite different. If you have 1,000 clients who know what they are doing, who don't need hand holding, who can actually do fine without help - then you won't have any problems.
I've seen some companies in the past that charge between $30 and $40 for 100gb bandwidth, yet put only 10 clients per server - although they offered absolutely no support what-so-ever, so it was no hassle or hard work for the owner, so he didn't really care. Although he did make quite a bit of profit in the end after selling quite a bit.
You really have to realise that many clients don't need support, while others do.
.10 cent a GB is kind of pushing the extreme low.
As anjay said, you only get those prices if you do such a mass quantity of BW.
I'd say more the norm. is .50 or .75 per GB on low side, and up to 2.00 for resellers and the like.
Anyway....The problem, as I see it with overselling, stems from the DC's.
People think that just because a celeron 1.4Ghz comes w/ 1000GB BW, that the POS server will actually use it!!
That is a rarity, NOT commonality... to have a low end really push that out.
Then it is usually a 1 site server that has been heavily tweaked for that sites performance.
Anyway you get all these kids starting up and say "I have 1000GB server, so NO I'm not overselling" :shakes head in disgust:
Then they figure hell, I can make my BW ratio 35/1 plans and stay within my 1000GB and be OK...
They will learn
/end rant
As anjay said, you only get those prices if you do such a mass quantity of BW.
I'd say more the norm. is .50 or .75 per GB on low side, and up to 2.00 for resellers and the like.
Anyway....The problem, as I see it with overselling, stems from the DC's.
People think that just because a celeron 1.4Ghz comes w/ 1000GB BW, that the POS server will actually use it!!
That is a rarity, NOT commonality... to have a low end really push that out.
Then it is usually a 1 site server that has been heavily tweaked for that sites performance.
Anyway you get all these kids starting up and say "I have 1000GB server, so NO I'm not overselling" :shakes head in disgust:
Then they figure hell, I can make my BW ratio 35/1 plans and stay within my 1000GB and be OK...
They will learn
/end rant
Last edited:
Yeah, I know what you mean Esr Tek.
Also onto bandwidth price wise - I've just received a few quotes from LayerOne. They gave me prices with multi-homed tier-1 bandwidth providers.
They quoted me $600 per month for 1,200gb bandwidth. $8,500 per month for 30,000gb bandwidth and finally $10,400 per month for 48,000gb bandwidth.
The one for 48,000gb bandwidth is about $0.22 per 1gb of bandwidth. So of course the bandwidth prices do differ from one company to another, and also with different quality and so on.
Esr Tek said:
Anyway you get all these kids starting up and say "I have 1000GB server, so NO I'm not overselling" :shakes head in disgust:
Then they figure hell, I can make my BW ratio 35/1 plans and stay within my 1000GB and be OK...
They will learn
/end rant
EXACTLY. And if you bring it up to them, they argue, and argue, and argue with you about it.
I won't go too far into this because I don't want to 'self promote' but we have 2 branches now - and the absolute lowest that we go is 40 cents a gig (with restrictions). Any less than that, and it's operating at a zero-sum game. Generally around $1 is where things start getting comfortable, and to the point where you can actually support the customer base that you have.
<waiting for a host selling bandwidth at 7 cents a gig to come in here and tell me off
>-David
Greetings:
Overselling is advertising and promoting something you currently do not have on hand.
i.e. You have a 40 GB hard drive with 30 GB for actual use. Your primary plan has 1 GB of disk space, and you put 250 sites on the server.
250 GB if all used even though you only have 30 GB of free space on the server.
Overselling can work in areas where you can readily, easily, and financially acquire the said resources in time to deliver them upon demand.
For example, let’s state your plans offer 10 GB of bandwidth with the same 250 sites on the server. That’s 2,500 MB of bandwidth.
Let’s say your provider includes 1,000 MB of bandwidth…. But any overages are automatically provided and charged to your account.
Presuming your pricing incorporates paying for the additional 1,500 MB of bandwidth, you are covered.
Lastly, the one area to keep in mind if you do play (and it is playing to a degree) with overselling, the reliability and performance of your server(s) can be dramatically impacted for the worse by treating them like sardine cans.
So even if you think you have the math down perfectly in terms of quantity and finances, the actually deliver may cause problems for your clients on said boxes.
Thank you.
__________________
Custom Reseller Plans at Wholesale price
NorthTrex Hosting
http://www.northtrex.com/
Overselling is advertising and promoting something you currently do not have on hand.
i.e. You have a 40 GB hard drive with 30 GB for actual use. Your primary plan has 1 GB of disk space, and you put 250 sites on the server.
250 GB if all used even though you only have 30 GB of free space on the server.
Overselling can work in areas where you can readily, easily, and financially acquire the said resources in time to deliver them upon demand.
For example, let’s state your plans offer 10 GB of bandwidth with the same 250 sites on the server. That’s 2,500 MB of bandwidth.
Let’s say your provider includes 1,000 MB of bandwidth…. But any overages are automatically provided and charged to your account.
Presuming your pricing incorporates paying for the additional 1,500 MB of bandwidth, you are covered.
Lastly, the one area to keep in mind if you do play (and it is playing to a degree) with overselling, the reliability and performance of your server(s) can be dramatically impacted for the worse by treating them like sardine cans.
So even if you think you have the math down perfectly in terms of quantity and finances, the actually deliver may cause problems for your clients on said boxes.
Thank you.
__________________
Custom Reseller Plans at Wholesale price
NorthTrex Hosting
http://www.northtrex.com/
othellotech
New member
the absolute min 1 GB of *BANDWIDTH* costs a company is around the $8000/month and thats for cr@p quality
oh, you meant *DATA-TRANSFER* did you
totally different thing ...
a company that doesn't understand teh dynamics of traffic, the costs of routing/internet exchange point peering/decent hardware etc, and was just divying up sh!te bandwidth could *potentially* be offering it at 4c/GB of data-transfer
actual *cost* to them is more likely to be in the region of AT LEAST 4 times that if they took the "real" costs into account rather than soem mathematical formula taking 1Mb/s @ $10 and working out the max GB/month etc
oh, you meant *DATA-TRANSFER* did you
totally different thing ...a company that doesn't understand teh dynamics of traffic, the costs of routing/internet exchange point peering/decent hardware etc, and was just divying up sh!te bandwidth could *potentially* be offering it at 4c/GB of data-transfer
actual *cost* to them is more likely to be in the region of AT LEAST 4 times that if they took the "real" costs into account rather than soem mathematical formula taking 1Mb/s @ $10 and working out the max GB/month etc
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