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good idea
I personally think that LEB is a hard thing to start with. Better to do it later, when you have established sustainable business. But that is only my opinion.
One bad move can destroy you in a second...
Oh yeah?
Oversell, oversell, and oversell, literally. Most LEB companies start off offering really cheap services, then once they get a good client base, they remove the packages and start offering "premium" packages.
Yes, I believe it. But the focus of my doubt is: how to compete with LEB that focus only in PRICES (lowest prices).
Offer same price but better quality
The most successful hosts here offer quality along with a low price.
Will not be AWS quality, but close enough at half the price or lower for some people, better specs but not so stable.
However there is such thing as selling the leftovers.
When you have a few IPs left on a big vlan and no real space to host more VMs and no more demand for extra IPs you might as well sell a few low end plans from it.
Same on big servers with plenty of CPU left and some space but very little ram you can also sell a few of these.
The whole VPS business in prometeus was supposed to run on leftovers.
Some extra traffic, some extra space, some stray servers.
It turned into it's own sector now, with a few brands of it's own cloud services and international locations.
Of course it will never bring the revenue the corporate sector brings with streaming clusters and vmware/rhev clouds with 64 GB ram VMs and the like, however for the investment (apart from Salvatore's time which should have been put to better use) it didnt turn out bad.
Already some of the corporate customers are there because they heard of us via friends using the low end services. They are probably thinking if the low end quality is such, I suppose I cant go wrong with real business applications.
I realize this is not the story of the majority of the people here, but I thought it was worth sharing it.
Thank you share your experience. Specially the part you talked about where you work.
It is a real experience.
I liked the part about clouds, too.
But I'd like to have more examples about COSTS and profits. If it is really possible to generate profits or not.
And yes, you can use any place. If in USA the IPs are free, no problem. Because the majory of this kind of low end companies are based in USA.
Thank you, again!
It's not that hard to do the maths. Just look at cost of server and number of VPS sold. Data floats around with the leaks.
Yes, but there are big 'fly-by-night host's buying others 'fly-by-night' companies and I am really curious about how can they continue in the market. I believe they are losing money, but I can not understand how much and if they will really close one day. They close locations but continue in the market. They continue with brands they bought (not good 'brands' in fact), but they continue there. So, the fly can be not 'by-night' when we do not know from where these kind of companies get their money. What is the limit a 'fly-by-night' company can survive?
Tks!
No one would tell you any trade secrets if there are any - that's their formula and how they survive. If not, everything else is out in the public.
Well, we are recently looking for places in US for our IWStack expansion. We did a bit of research for regular servers to test the place before sending ours.
For 200-300 USD in a yearly deal you can get a 32 GB latest E3 with 4 SSDs and raid card+BBU. Some will think that is overkill and I think too, but Uncle makes no compromise on quality, it is hard to get 1.5 GB/s in the "dd test" otherwise and he thought he should play ball for a change in that silly competition even if we both know it is futile but for giggles it was worth it...
This can do, say, 64 GB sold RAM with prices at about 3-4 Eur a GB at least, but we chose to go below that and a bit higher prices.
Other people might sell even more RAM imposing restrictions on what can you run and what fraction of the advertised CPU you can use, getting even more money not to mention the usage of SATA cheap drives for lots of space and lots of oversell, but will have to lower the prices in that case otherwise people will not buy.
In Eu that is not possible as IPs cost money but in US it is still.
Why would you want to base a business plan focusing on underbidding what effectively is other people's advertising dollars?
It is about this I am talking.
I am not asking anyone to say what they do to earn money. I think almost of the members here are not the same kind of company (price's focus). So, I think people can say what they 'imagine' this kind of company (if its name is fly-by-night, low end, etc. I do not mind) projects its business to earn clients or money.
Don't need a yearly deal to do this
Want 1?
The expansion project is on hold now after the setbacks with the last attempt, when Uncle will have time, will start looking again.
Do you have IPv6 ?
Yes sir we do have ipv6.
Well, going by @AnthonySmith 's numbers, live in a country where $218/month is a princely sum for starters. Second, live in one where the opportunity cost of legal claims is too high for any supplier/client to reach you. Third, use Mailboxes Etc and private whois if #1 and #2 are not possible. Four, don't leave a forum breadcrumb of yourself asking how to setup a fly-by-night deadpool company.
Thank you (yes, I have already clicked in 'thanks' button).
I did not know it.
Can you give examples? It does not need to be your real case.
tchen, sorry for the delay in your replies.
About business plan: I want to understand how this kind of company works and (for this reason) how to compete with it. It does not mean I will do the same thing.
Untill now I could only read people talking about general replies. I could not see any example of what a big company with A LOT OF MONEY (not one that opened yesterday) can do. The examples with prices (all of them from @AnthonySmith) look like examples for anyone who will start tomorrow a new 'company'.
About your 4 tips: the original post (the first message in this thread) is not about how I will compete with this kind of company by myself. When I talk about 'how to compete with this kind of company', I am trying to make the reader thinks if this is possible and how it can be done.
Now that I explained your doubt about me, if possible, can you try to explain how this kind of company (low low end prices) can run? Or is it impossible in your mind?
Tks!
The question is not about me, but how to compete with that ones that use this kind of strategy (best price). How can they survive? Overselling? No support (closing tickets without reply)?
Tks!
No support is advertised and customers know about it.
Closing tickets without reply, umm, no. Even if the user asks to install x or y for him solve some lockout issue he could have solved from console or things like those you could do it if you think it is fun and explain him it is not your job and he should be careful and hire an admin because servers get hacked, you know, pointing them to some basic security articles.
Sometimes I let tickets slip, when I replied already 10 times the same thing but the user cannot be bothered to look back, I get tired, eventually, but usually, no matter how "not my job" it is at least you can explain you dont have to do it.
it's not an yearly deal, I pay a big upfront to lower the monthly fee near to a colo fee. We need to do bgp, is this possible? :-)
I was talking in general, some people offer yearly deals instead of setup fees.
Oh that buydown thing. That's rent to own v2.
Anything's possible
, but yes bgp, sure, provided the order size justifies it.
Closing tickets without reply, umm, no.
When I talked about close tickets without reply was to mention a bad experience. Sure a real brand that is worried about its reputation will never close a ticket without reply.
But I think there are a few ones will do it.
@Maounique and @AnthonySmith thank you for your replies.
