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IPv4 costs & lowend yearly deals
I'll use a quote from another thread
@MarkTurner said:
Bruce - We don't discount IPs. Irrespective of the deal they are always $1/IP/month
Now, if an IP costs a provider $1/month, how do other providers do deals that include 1 IPv4 and are less than $10/year ? Obviously they are using their own IPs, or renting/leasing from a cheaper provider.
I'm not interested in that kind of business, but I am interested to learn about the pricing of IPs generally in the US.
UK typically is £1 (about $1.60), but there better deals. One reason why rapidswitch is very common with lowend providers here.
Comments
so cheap server and pricey IPs might not be the best combination.
It depends on what you are doing. $1/IP is not pricey - companies like OVH are charging $1.50/IP (nevermind setup cost which increases the cost as well).
Delimiter's business model is not to provide a single server with a load of IPs on it. We did this 2-3 years ago but usually ended up attracting the wrong type of customer.
We can do a lot better on IPs
Yeah, I'd suspect most providers aren't charging $1/IP because that's what IPs cost them, but because $1/IP seems to be the lower bound of what keeps spammers out
No, to make profit.
but how you make profit on 7.50/8.50$ vps?
Ubiquity .... they give you a hole /24 for merely 150 including server cost.... sounds ridiculous
@concerto49 If you call making $1 profitable then sure. But the reality is that its actually more aggravation to invoice/collect, but if you don't you end up with your resellers handing out IPs like Smarties (like M&M's to people outside Britain) and the knock on effect is that you have the spammers moving in.
You can see what happens with cheap IPs by looking at the drama Spamhaus has caused with Colocrossing's new IP block. (http://www.spamhaus.org/sbl/query/SBL214220) - a whole /15 blacklisted probably by just a handful of bad customers.
In your case @concerto49 you seem to get your IPs from Cogent's /8, now imagine spammers moved in there, just a handful. Its possible that whole /8 is going to get blacklisted. Spamhaus seem very trigger happy.
In the majority of cases customers do not need as many IPs as they claim, many are just panic buying/stockpiling and in some cases when a spammer comes along they'll resell the IPs for a quick buck. If you're selling a VPS for $10/millennium and a customer wants 20 extra IPs thats quadrupled your income. So in my experience I see these resellers simply take the cash and worry about the consequence later.
I maybe jaded by it, but I have been involved in a number of Yomura's acquisitions and the subsequent cleanup/purge of the network. Many times these companies were handling IPs to spammers, 'SEO', YouTube promoters, scrapers, etc.
As IP space is a shared resource between your customers, you have to be ever so careful to prevent the actions of one customers disrupting the service of another.
Yomura took the position to charge a reasonable rate for IPs, high enough to stop stockpiling and the majority of spammers, but low enough for a sustainable (important word) business to buy IPs to support its business.
For us, our profit is made in server rental, not in pennies from IPs.
@infinity580 - This LEB/LET pricing for VPS's is ultra low margins. Its actually cheaper to just give away the service - gratis. By the time you have billed the customer, paid off Paypal, withdrawn the money, paid the bank charges, your accountant's time and all the other costs just to get the payment from customer to your bank, its pennies.
£&$% sorry I asked now
I can see why Steve doesn't post offers here. lowend customers not welcomed, and for good reason it seems.
It is a penny business
.
We get very few of our IPs from cogent. Most are our own. (Minor correction)
http://bgp.he.net/AS62638#_asinfo
well if you get a customer with your lowend vps and they have good experience, if they need more power, there are more likely to check your other products. That is when you start making money.
See a lot of providers offering silly amounts of v4 now. Seems hoarding in the lead up to final /8 policy in ARIN region is in full effect.
@Bruce - LEB very welcome, we sold hundreds of those X5150 units over Christmas/January. But when selling servers at that low price, you attract two types of people - people who want a good deal and want to be a sensible/responsible user; and the idiots who want a cheap machine for spamming/booters/DoS/etc.
By restricting the number of IPs, we immediately discourage the snowshoes and the blatant spammers (though a few did try it and were promptly disconnected). Out of 600-650 customers who took that X5150 offer, I think we had to disconnect about 20 customers for spamming/DoS/etc. Its small numbers. Compare that to E3 customers with /25, /26 its around 20% of customers attempt to use the servers for spamming even though the servers are five times more expensive. They just want the IPs.
@Fliphost - my mistake. I just saw the 38.X.X.X subnet so assumed.
Spamhaus would not list a Tier1 /8 in its entirety. Simple as this.
By being ARIN member (500USD flatfee regardless of amount of IPs EDIT: 500 for small, ok in this calculation, multiple serve rone needs to assume 2k for ARIN which is covered by the higher calculated price for the servers), colocating in a cheap power state (like NV) wth cheap servers (E3 or older L5520+ for example).
Heres a (long) calculation example:
A Dual L5520 with 4x2TB and 100GB RAM can be had for ~1200USD, ROI of a year means 100$ monthly and 42$ monthly for ARIN.
Fiberhub sells colo at 59$, with upgrade to 25TB BW for 109$ (i just assume they announce IPs either free or for a one time fee)
This means (assuming one server, else ARIN costs need to be divided) a total cost of 251$ / monthly.
100GB RAM / 4TB RAID10 / 25TB BW to give out - Assume a /23 (~500 usable IPs) per server:
256MB RAM (25% oversold, exactly 200MB dedicated)
5GB HDD (non oversold)
50GB BW (non oversold, i am not sure if Fiberhub bills for inbound, if not then more)
0.032 (3%) dedicated CPU core (just calculated that to show that it is not extremely unreasonable low)
500 * 10 (USD / year / VPS) = 5000USD, costs per year (without maintenance and calculating ARIN account only on this one box) are 251 * 12 = 3012USD
This gives a profit of ~2000USD / year / node or 166$ monthly in the ROI timeframe and 3188$ / year or 266$ / month afterwards.
Scale this up to 10 of this systems (an initial investment of ~15000$, assuming very bad credit at 10% over 12 months this is 16500$ to be paid back) with a full rack and the profit will be, assuming 90% sold, in the ROA timeframe of 12 months:
138 (server/m with interest of 10%) + (500 / 10 / 12 ) 5$ (ARIN/server/m) + 100$ (42U rack w/ power + 1Gbit BW at fiberhub p. m p. s, rack is 1k) == 243$ / month per server including all costs
243 / 450 (90% of 500) = 0.55$ (rounded up) per VPS / month which * 12 is 6.6$ / VPS / year in costs while in ROI - which means 3.4$ profit at 10$ sale price (per year) or 1530$ / yearly per node or 18360$ / yearly p. 10 nodes
Outside of ROI costs per node are reduced by 138$ - so after 12 months calculation is:
105 / 450 = 0.24$ / VPS / mo which * 12 is 2.88$ costs p. VPS / yr and 7.12$ profit / yr / p. VPS * 450 * 10 == 3204$ / mo or 32040$ / yr profit across 10 nodes.
Assuming 30% tax (which for the US as sole trader is extreme i guess) and other costs this comes out as 22428$ profit / year after tax/costs or 1869$ / month (just to put that into perspective, i do not earn much more than this net at EDIS) - Which, assuming one man show, should be sustainable as full time job in a lower cost area or easily as part time venture.
//math
@William - ARIN charges $500 for upto /22
https://www.arin.net/fees/fee_schedule.html
$0.2-0.25/ip/mo is usual.
Not really. Most hosts charge .5 to 1 $
So basically a IP cost 3$ per Year, when people sell 7$ VPS's on owned hardware they still make profit. What a business
You can make more money from a fast food joint than a VPS company
Fast food joints are harder to start though
Even with the 2000$ for Small category this is not too much relevant in the calculation as i used 1500 per server instead of 1200 as in the single server calculation and the (hopefully) unrealistic 10% credit interest leave some area as well.
My point here is that Delimiter are charging $2-4 per IP per month. @MarkTurner quoted $1, which I don't see on their website.
If they are only making profit on the server, then it implies that they're paying someone to lease the IPs @ $1/m
if everyone else is selling IPs for much less, then either there's some misunderstanding or good profit from IPs. However, I've no objection with the NO_SPAMMERS_HERE policy
@Bruce - $1/IP for dedicated servers, $3/IP for VPS as they already include multiple IPs with the VPS. Delimiter passes on the IP cost price from Yomura for dedicated servers and marks it up to $3/IP for VPS.
lets leave this until we see that latest offer
Some background for others - from Delimiter website ($49 dedi march offer)
Subnet: /28 (16 IPs - 13 Usable - Requires Justification) $32
5 IPs included in the $49 offer. $32 to upgrade to 13 IPs. So $32 for 8 IPs = $4. with coupon code that's reduced to $2 per IP.
@Bruce - the IPs on dedicated always sell for $1/IP. I've helped many customers add netblocks to their servers and the price always comes out at $1
FWIW - my extra IPs are $1/month on Delimiter dedi. Purchased using a ticket.
so, bought after your service is live as an addon, rather than in the cart on the website. I've learnt a trick there. thanks.