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Comments
To be honest I find it insulting even at 2gb, it is praying on the uneducated and hurting the industry.
Not sure why that is. I sold what I consider a fair amount of 2GB at $7 on our newest node. Total memory sold on the node right now is about 39GB, total is 64GB, and profit achieved.
Maybe i have things wrong then, where do you lease 64gb servers for under $140 per month with ip's?
you mean showBiz
You don't. Nor do you fill a node with $7 promos
Promotional offers are supposed to be crazy, but part of the business plan.
out or curiosity. whats the average profit per node or kW
Off the top of my head, projected profit around $500/m.
Yes but you said you sold a fair few and that you have 39GB allocated, that is less than 20 of them and you said you are in profit at $<140
But if you are being honest and you only sell a few of these per node then fair enough, my comments are not really meant for you if that is the case.
As you are well aware people sell these €7.00 p/m and less on E3 nodes and we all know this is pretty much all they sell or they sell them in big enough quantities to raise eye brows.
Correct
Actually, I didn't say the profit was caused by them. At least not directly. That promotion has proven extremely valuable for increasing regular priced sales.
I sure hope not
and then this makes me question everything again, +1 for sharing such info, many would never do that but given your avg price p/GB is 10.99 and that does not include any promo's at all. That still only leaves around $140 p/month for the server+IP's
Then again hats off to you for having "The amount of RAM allotted to your container." on your site unlike these other jokers and clowns that call it dedicated.
I guess Xen has just made me too damn honest
Yeah, the cost per VPS is high for us. A bit lower than that on the full scale, which I obviously don't want to dive into so far as to drop the full business plan spreadsheet, but there's a lot of figures in there that might not be as easily assumed. Oversell ratio about 1.5:1, managed plans that aren't yet on the site, etc.
It'll do that to ya
Anthony, I'm going to prove a point or to get a loss, in both case I will learn something.
Remember, ram overcommit (or overselling) isn't something new. I work with vmware from ages (I even bought one of their first license for linux in late 90), vmware is by far one of the most oversellable technology I worked with, even with the VSPP contract they allow you to declare up to 50% of overcommit of total ram in reports :-)
whatever it is i got mine
, i have prometeus KVM since last 1 year and happy with it.. so let me give this a try too..
Im convinced it will turn out a great deal. Gonna put it to the test with a solr application soon
@prometeus I fully understand that and have been working with linux and vmware almost as long as you have and I fully understand the advantages of over provisioning for service density on physical hardware in production environments including enterprise level deployments.
I have no issue with the fact that the technology exists, I think it is a great thing and it even contributes towards a greener cleaner environment for the world as less physical hardware nodes are required to perform individual roles and functions.
My 'gripe/problem' is industry specific, the vast majority, I would go as far as to say 90% of people believe they are getting 2GB of dedicated ram for $7.00 and sadly some hosts also believe that is what they are selling and that is absolutely not true, and I promise the first time someone gets oom'd on a noticeable and regular basis on one of these magic unicorn 2GB plans we will all get to hear about it, or when performance is not great we will all get to hear about it.
I personally took a 2GB plan from one of the first hosts to do this for some investigation and found it was swapping out my 'dedicated' Ram to the node after only 300mb was in use, most customers do not know how to find this sort of thing out and it is because of that I feel that these offers prey on peoples ignorance which is unfair, it is not being made absolutely clear at the point of sale what they are buying.
It feels a bit like selling a car that 200 other car dealers sell for €20,000 except you significantly change the internals and engine for a much cheaper one that has been used already but make sure you leave the shell/body of the car the same so to the uneducated/ignorant customer it looks the same on the surface and you sell it for €5000.
How long do you think the other dealers would allow you to stay in business?
Not enough user awareness is done point of sale honesty is being done to ensure users know what they are getting, as a result of all of this and many of the things above what is happening is devaluing the whole industry and is building an attitude of "I can get it cheaper if I buy it there" when in reality they are not at all the same thing.
This is a topic I get involved in a lot, I don't want it to sound rant, I am just putting my feelings out there, and lets all be honest if we had a world 'Lets use all your ram for 24 hours on your OpenVZ VPS if you have been sold dedicated Ram DAY" this forum would fill up FAST with complaints and a lot of hosts would have a very bad day.
Off a single node? That's very good.
Please stop saying pray. It is prey. Prey on people's ignorance.
or
I still think that Salvatore can make this work, and even make it profitable. Not that i would try to do it myself - i don't believe in high density / huge nodes, prefer lower density smaller nodes to have less headache and better sleep at night.
Some people will want 5GB RAM for $7, other will be ok with 512-1024MB for $7. There are different people with different requirements and different philosophies.
The other providers should not worry so much, there is room for everyone under the sun
From the name of the service itself to the informations we are giving to the users about our intention to keep nodes with this plan at 70-100% usage of resources all the time I don't think there is doubt we are going to oversell on this. Everybody can also notice that for these plans you can subscribe only monthly for now, even if this will add some fixed paypal fee.
We have all range of services, from the business class vps to the more massive deploy, openvz, kvm and xen, just to mention the services we sell online. This will not replace our business, it just complement it.
one year ago people were asking if my business was sustainable, my crazy offers, the jokes and the like. I think it is, and hope people here can support my statement if they are still using our services month after month.
Going to the wording of the offers, stating that one or two of the resources are guaranted still don't say anything about the value of the service.
Let say that I guarantee ram and disk. What happen if a server is so hammered on the cpu that I give you a cycle every once in a while? Or if the network is so saturated that I get a few Kbps at max? Or my beloved and dedicated disk can be accessed at 5 IOPS?
http://www.lowendtalk.com/discussion/365/whats-next..-5gb-ram-for-7-dollars/p1
Yes
Now, people, I feel there are some misunderstandings here...
We never claimed everyone will have 5 GB dedicated with this offer, nor 4-8 through the other plans. On the contrary, made it extremely clear there is overcommit unlike in our regular offers.
Does this mean we will let the node lose performance or (jesus !) swap to disk ?
No way, unlike other (summer, spring) hosts, Prometeus has the resources to take the hit if people will start using all the node's ram and performance degrades to add more and eventually spread out to other nodes.
We just got a big shipment of servers and more are on the way, Supermicro is "sponsoring" this deal. There is plenty of space, the cloud setup is not going as good as planned and need some fun and relaxing with this kind of deals.
Of course, everyone is free to criticize, but as long as performance is good and people happy, I do not see a problem and if that changes, we have teh resources to absorb the supraload to other servers or add more ram.
At the end of the day, even if we lose the bet, no customer will suffer except briefly and very little since we see the performance problems till we make the move.
This is not meant to host businesses, we have many-many other plans for that, expect reboots for maintenance to add more ram, for instance, while we find out the right hardware combination.
This was the last step towards the complete VPS offer. From 128 to 5120 at LEB prices and up to 8G outside that. We even have 8GB offer with tons of space for Xen Biz, but it costs an arm and a leg, still there is no stock from when was launched and nobody ever let one unpaid or cancelled.
To answer also doom sayers, no, we do not plan to deadpool on this, this is in no way shape or form the revenue we need to survive and while we do expect a lot of fraud, I am personally handling it very cautiously, hence a lot of people that are denied service. Whenever we take loads of new customers in one go, we have an abuse problem, that is something we already expect and try to deal with as good as possible, if we did an 128 MB sale the situation would have probably been worse, every kid and their cat would have got a DDoS box out of it, the 7 $ price tag is somewhat higher and from previous experience I would bet will generate less abuse.
Now, just wait and see...
If you do need a target to attack, this was my idea and it stems from the fact that our regular non-oversold servers stay unused even at 10%, this is wrong, it hurts the environment, for once, while I agree there is a need for room in case of sudden spikes in demand from one VPS or another and the BIz line warrants such things a bit, it seems a bit too far in that direction.
I do think Prometeus is competing for performance... If it also has a low price tag and we can afford it, what is the problem ?
Our profit targets are much different from others, we start the conception of new plans from the HW available and what will be the worst case scenario of usage, then, if at that kind of extreme usage we can break even. Normally, nobody uses all the resources all the time, so there is room for some profit, say lower than 50-100 per node with leaving a lot of room for spikes in demand.
Also, all INCOME, not only profit, is reinvested, we have a very aggressive expansion policy, the other parts of the business generate the normal profit, this VPS side only has the rule not to get in fresh money, i.e. invest only the revenue and not hurt the main business, hence the policy regarding DDoS, for example.
Bad example ;-)
OK, then, expect reboots to be moved if the load goes too big
We do it offline since online there were some problems, including spurious node reboots.
@Maounique
I don't agree that is is made clear, the LEB offer is worded as if it is direct competition to the 2GB offers, no where does it say non dedicated ram, and https://my.iperweb.com/cart/overzold/ also says nothing about that either.
Clear as mud.
The end result will be that others will now try to compete in this market and things will get stupid, I am not going to write a wall of text as this was never an attack or specifically aimed at you guys but anyone with more than a few years experience that has been actively trending the market while combining this with 10 grams of common sense knows exactly where this is going regardless of what anyone has to say.
www.overzold.com
It is clearly bolded and all the sources you quoted link there.
While we didnt have any control over the LEB offer, Liam simply saw the LET offer and asked if he can list it on LEB (we didnt plan on that), even so, on LEB there are links to the site where everything is explained, we even have a FAQ about it...
So, I do not agree with your disagreement
About what others will do... Well, we cant control that either, all we can do is do our best to make this work.
If it doesnt, we have big safety nets for soft landing so the customers will not suffer.
I dont see a problem here, at least we didnt plan it to be problematic, so far no customer complained except those that were denied service for a reason or another and those unhappy we do not have yearly or at least quarterly plans... Unfortunately that cannot be helped, the fear of abuse leads the strict admission policy (at least in the beginning when we have many new customers) and we dont plan to commit the customer in the long term when there is some doubt on how this will work in the end and refunds cost us money.
Fair enough, I am sure Liam got plenty of protests to update the wording
We will have to agree to disagree, I know you are not stupid, you know expecting people to look at 3 different places before clicking buy when everything leads to the 'order button' is just not sensible.
Just because the domain is a play on wording means nothing, the web page is iperweb branded and my whole point about people not understanding what that even means comes in to play, frankly the first thing I thought of when I saw the name was (showing my age now) gianfranco zola
I know you guys have the resources and finances to back this up if it goes wrong, that is far from my point, my core point is the over all lack of user awareness through marketing tricks and the fact that this is a seed that will turn in to a 6GB for $7 plant and that becomes normal, people expect it and dont expect oom's regardless of what your FAQ may or may not say, the net result being the industry goes down the shitter.
The lower priced end of the web hosting industry (i.e. the non-enterprise segment) has been preying on the uneducated with used car salesman like marketing pitches almost since its inception. Point of sale deceptive advertising in regards to advertised resources vs actually available resources has been practiced by a very large percentage of web hosting companies since the 1990's so if deceptive advertising practices devalue the industry then the devaluation was probably done long before the current 2GB/$7 VPS offers appeared.
What is currently damaging ("devaluing") the entire low end VPS sector's reputation is the surge in incompetent hosts (often referred to as summerhosts even though they operate 12 months a year) who lack basic technical and business management skills and (pardon my English) don't know their ass from a hole in the ground when it comes to server management/security/running a business and who leave a string of pissed off consumers in their wake when they fail to deliver on their promises.
The 2GB/5GB for $7 promotional offers by the likes of larger players like CVPS and Prometeus could actually help the LEB sector in the long run by forcing the weaker incompetent hosts who give the sector a bad name to compete at a price point that is unsustainable for any "summerhost". A surge in the bad apples of the sector being forced into the deadpool would be a win win situation for both end users and reputable hosts.
I am sorry, but with customers that dont bother to read before buying, that is the expected result...
I mean, they dont read the ToS/AUP, even, what can we do about it ?
If everyone would bother to read reviews, for example, we would never have stock, no matter how much we invest in gear and network, so, the fact the customer is blind hurts us more than others, we would love to have educated customers that get all the info before buying, but it is out of our hands...
This is in no way a bag of tricks, and I am fairly confident we can pull this without oom errors, at least not often and at least 4 GB or so will always be available. If it is not happening at least like that, we will add more ram or move to another server. We aim to have plenty of ram left for caching, even. That makes the servers snappy and customers happy.
Bottom of line, we do joke with prices, but not with quality.