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@key12 I didn't say you had to pay for anything? In that case, why would you offer vps when you aren't going to have very many orders in the first month?
Well, let's look at it closer then. The cost to acquire a customer for web hosting is about $60 now using google/faceboot/affilate maretking if you wish to oversell unlimited everything for $60/yr getting 2-3 years cash upfront. Wait, you want to sell realistic plans? Ok, where do you market that when you have to educate every potential customer? WHT? Ha! You know it is only $20/wk for a sticky in Web Hosting offered now? Compair that to $600/wk for VPS Offers, which do you think people are buying?
I found a niche in web hosting in 2006 offering high resource hosting, living off the scraps the big guys were tossing to the curb as resource abusers. It was mostly PPC Search sites and other get-paid-to type sites, and those are the only dedicated server and web hosting customers I still have today, and take up 4U of space in SC and 2U in LA, yet I cannot seem to add VPS nodes fast enough to meet demand. I see where my bread is being buttered, and cater to those who wish to be customers, and that is not web hosting or dedicated servers.
I don't think the domain name limits the market.
@miTgiB I did not know it was only $20/wk for a sticky in web hosting offers... this is probably because people coming to webhostingtalk are generally more savvy. So you can't judge off of just webhostingtalk.
Also I'm not sure how you came up with the figure on the cost to acquire one of those web hosting customers.... but once you have one it's practically pure profit.
Edit: At ydgh we decided to not publicly offer regular web hosting to customers so that our customers could feel like we weren't competing with them..... we spend $0 on PPC advertising and we get reseller, vps, and dedi customers.
@BassHost - even if it doesn't, their owners do. My only question is WHY.
They don't want to expand? That is a good question.
VPS Hosting is more profite than dedicated servers, E3 rent for $70 only where is the profite here?
E3 rent for $150-200 from reputable providers, how long do you wait to hopefully get one from VolumeDrive? or whoever it is selling em that cheep, I have heard 4-8 weeks sometimes.
@key12 the profit is when you have someone that's already rented that server before and it becomes an asset. You don't make tons of margin on just the server... but you do on the upgrades.
Thanks miTgiB I was thinking that was a low figure.
I'm referencing your argument over Brand Name limiting one to a particular service. In your case, your brand specifically mentions domains (and nothing else), which is clearly not your sole service.
Taking on a colo means we make less than we could have for the same amount of power. So yes, we would rather let a datacenter take them on, as we consider a single client bringing in far less than a VM node full of clients to be a loss.
If we were hurting for sales we might consider making exceptions for single clients. But as it stands, racking up our own equipment instead of someone else's means we can provide services for a far greater number of clients, at an increased profit.
The basis of your arguement (in that a name such as BuyVM limits us to only VPSes/etc) is rather flawed. We also offer rediculously popular SharedSQL plans, backups/storage, webhosting (once upon a time), etc. For many of us, VMs are ideal in that it's an easy system to remotely manage, and requires relatively little hands-on-hardware time at the DC. So it's not a limitation, but a sound business decision.
@Aldryic
Actually our brand name mentions were the domain goes.
I didn't say anything about colo now did I? I wouldn't sell colo not being a datacenter and would not make an exception for a client to colo in our space. So you would still be selling your own equipment.
Taking on dedicated customers means greater digits per customer - having to fill a full node full of vps means every customer is only giving you X per month when that one customer could be giving you XX per month in profit.
It doesn't really have anything to do with 'hurting for sales' you're just trying to make this a pissing contest, which it isn't. I don't see your sharedsql plans advertised on buyvm.net. Backups/Storage are mostly an addon for your current customers (don't see why a customer would use your storage plan but not use your vps services.)
Having dedi's racked in the DC with ipmi and remote switch access is a relatively little hands-on-hardware time at the DC venture as well, so I'm not sure where you are going with that.
@Aldryic did fairly well explain it. BuyVM woul rather sell a node and earn XXX from it than a dedi and earn XX from it. I also feel the same, I'd rather made the higher margin per U than a dedi will bring.
@miTgiB but what about the margin per customer? If you were that worried about margin per u I don't think you would be in the budget market.
Quick check, is that reselling or you provide your own equipment?
Francisco
Not necessarily. All of our plans are optimized for maximum income without overstepping resource boundaries. Trying to sell a node's worth of resources to a single client would be 1) a PITA, and 2) an end-loss.
No, I'm giving you a valid reason as to why we prefer virtualization. If you choose to take an offhand remark personally, then that is your prerogative.
We offer quite a bit that we don't advertise on buyvm.net. Including the BuyVM+ SQL and BuyVM+ DNS/backup services. We functioned just fine for three years without any website at all... our reputation and word of mouth is sufficient that making some shiny infodump isn't all that high of a priority. (That, and we prefer the personal interaction).
I don't see your point. Nowhere did I mention that these services were mutually exclusive.
I mean that if a client manages to FUBAR their system, I guarantee that it'd be faster to fix a VM than a dedi. To to mention that if a dedi client needs more RAM, you're looking at downtime, sending up a tech to install, etc. If a VM client wants more RAM (and the resources are available), it's as simple as issuing a few shell commands.
I don't think it's about worrying about margins, it's just making the best bang for the buck. If I have to maintain 4 racks of gear to make what I can make in 1/4 of a single rack, then i'm doing it wrong.
Sure, I can say I have so many racks and do the e-peen thing, but if I have to have a full time on-site tech providing support/KVMoIP/etc, then I'm out a lot more.
Many people have asked us to offer dedi's but the break even these days is like 8 months on the average node people want. Why should I take that cost on when I can just do a full node and break it in < 2?
Francisco
Irreverent, which makes a bigger pile of money to buy more stuff to reinvest into.
Yea our sites not quite as complete as it should be - my bad
I'm likely going to update/replace the site around the time that stallion2 rolls.
Francisco
hetzener? it's about $110
if you are doing alot of search will fin alot of provider provide E3 for $100 to $120 to rent with quick setup.
This is exactly why our whole business model is based on what we can do $/AMP. If we miss our mark on a node we find out why and either change it so it does or find a reason why it simply can't meet the margin and never let it happen again.
For instance, our storage plans? Super popular but complete shit for $/AMP. It's around $350/AMP on our storage node and that's well under what we are 'ok' with. But, we had the drives spare and I felt like playing with a new market so the guys let me.
Francisco
$99/m is the going rate i'm seeing boss
Hell, some people are doing 32G nodes for < $150/m I think.
Francisco
@Fransisco own equipment of course.
Well your argument was that you offer several other seperate products on the site, but actually those are just addon products for the vps customers you already have.
Two words, unmanaged provider.
That's expected from a dedi customer isn't it? That extra ram is going to bring in a much larger margin than a single budget vps customer.
What type of maintenance are you planning? Hardware failures are already accounted for in the margin you are making off each additional dedi customer.
Simply because many people have asked you to offer dedi's, you want all their business don't you? You will still be making profit.
I guess I need to buy xmas cards and cheese wheels for my dedi customers on the E3 shelf then
But seriously, I just bought that MicroCloud a few months back, fully decked out it was just over $6k, and ROI is $800/mo now? Yeah, don't see my rack usage on dedi's increasing anytime soon.
Fixed that for you. I never said we offered them on site, just that they were available, kindly take care to quote me correctly. Also, we have a handful of folks that used our SharedSQL and have no other services with us. Please don't make assumptions and assume them to be gospel.
Yes, we are an unmanaged provider. That doesn't stop us from lending a hand from time to time.
So tell me, how exactly do you plan on being an unmanaged dedi provider without giving them access to a KVM/remote/etc? Or are they pretty much just shafted if they'd like to do a reinstall/etc?
You're avoiding the point. You asked me how a Dedi was more hands-on work than a VM. I gave you a perfect example.
Any and all necessary to ensure that our services remain top of the line. We don't just purchase a box and let it sit forever. We even went and spend a good amount upgrading all of our older hardware about six months or so ago, just to bring existing clients up to the same performance as the new boxes.
If we were in this just to make a profit without caring how, we'd go back to Portland and sell to spammers, CP hosts, and skids.
To answer your question; no, we do not want all of their business. We have a specific type of customer that we view as an 'ideal client'. All of our services are marketed accordingly.
Trying to make a profit every and all ways you can is the mark of a novice. This will only lead you to headache and undue stress when the clusterfuck grows out of your control.
So when you have to sell an E3 for $99/m to compete in the unmanaged dedi market, you're having to:
Now, lets say you use one of the very affordable racking options, either HE or Colounlimited and snag a rack for $500/m. You then sell boxes for $99/ea and can only fit 15 (an amp for a switch) to a rack due to power (HE doesn't sell more power, don't know about colounlimited). Lets say you fill the rack and don't need more BW since you got a bunch of BW sipper clients, so:
- $33/m per server to operate
$66/m gross profits
That means that break even is 15 months before you start seeing a profit, nevermind your admin time to get to the DC.
I'm positive you can make more than $100 per AMP doing something else
Francisco
If we only made 100$/amp, bz and I would tie you to a chair for a serious talk
I'd call it HMO, Human Memory Optimization
Oh, I do apologize that I got two words wrong in my 'INDIRECT' quote. You were arguing that you sell more than just VPS. ( I assumed that you meant you market it on your site as well given the context of the thread. )
So let me get this strait, hostgator is a novice? They offer all of these services and market to different types of customers.
Burstnet is a novice? They also offer all of these services and market to different types of customers.
The list goes on and on... but I do understand your viewpoint of having a NICHE and sticking to that niche. Just because I have suggested to expand to other niche for the benefit of your customers and profit of your company and wondering why more people don't do it does not make those that do a novice. It seems every chance you get you throw in a jab.
IPMI
Not everybody disabled it on the motherboard, only @Fransisco does
Not really. Common practice is to set a umbrella entity and launch targeted brands.
I would venture to guess 80% of the lasting providers out there have a different identity and have other "brands"