Quick question to server/vps providers...

[DavidsAwesome]

For hardware upgrades like hard drives, ram..... Why do you charge a monthly fee instead of a one-time fee?

If you offer both, that's excellent too...

I understand that you want to make money everywhere you can, but it gets me angry knowing that...

1) The hardware is already paid for by other customers use, and you're just using it as an excuse to make money
or
2) You will make TONS of money in the long run off customers paying extra every month.

Server providers can also PM me to prevent the public from seeing answers.... I'm not going to expose you if you say its about money or something... I just really want an answer.

PS: This has nothing to do with my server provider, I don't even know what he charges for hardware upgrades.... I was just browsing through server offers and got ticked off.

[impactgc]

I am not sure why you are angry about people making money.. Isn't that the reason people are in business?

I dont know of an non-profit hosting company.

It cost money to add memory and other hardware to a server. Costs are normally in any business passed onto the customer. Also there are many other costs to running a business- not just the "hardware".

Some business charge just enough to cover the cost.

Once again all businesses are different.. But I think all are in it to make some type of money - which shouldn't anger you.

Good luck finding your answers.

Adam

[Darknight]

If you do not like it there are alot of companys that offer one time fees. Just use them instead?
The reason companys offer monthly payments is becuse thats what they want to do... either way they make money. If A client pays 100$ for 1GB ram upgrade then leaves the company have 1GB ram for nothing..
Either way they make money out of it at the end of the day.
VPS's are differnt.. Money is made from selling the vps nodes hardware.. If they only did onetime fee upgrades they would be more limited on the monthly amount made each month becuse you can only put so much ram and so many HDD's in one server.

[cfhdev]

I would not say this question is directed at vps hosts as they generally are just increasing the amount of ram and hard drive space being made available to you. Not increasing the amount available on the whole system. Either way As far as on dedicated machines some do and some don't offer monthly and one time upgrades however it is usually is more favorable for the budget minded customer to pay a smaller monthly fee to upgrade rather then maybe a large onetime fee to upgrade. Especially when you do not usually know how long you might keep a machine. Also I do not agree with (The hardware is already paid for by other customers use) this may or may not be true there is no telling if the hardware you choose to upgrade to has been used or purchased by another client in the past. Maybe you can clarify what you are trying to say.

[GeekRack]

We actually charge on a monthly basis instead for a number of reasons, mostly this reasoning lies within keeping the cost as low as possible when offering a solution to the customer. Some customers cant or do not want to pay a large amount of money just to have additional RAM or HDD added to their server.

I cant say for other but we really dont make that much money from hardware upgrades to be honest. We do make enough to cover the actual cost of the equipment and thats about it really.

[fnixws]

Arent alot of you guys actually just renting the servers you rent?

As in, you dont actuall have access to the hardware?

In this situation, the company would then have to pass on to the user any costs charged by their provider.

Then of course there the situation where you would jsut distribute some unused RAM from another VPS to the one asking for an upgrade. This means you can now only sell the other VPS for $XX less than before since it has less RAM, and pass that loss on to the cutomer asking for the upgrade. Perfectly legitemate way to do it IMO.


Hypothetically for me to purchase 1gig of ram ($30) have it delivered to my
door overnight ($10) and remove a server from a rack and install the Ram (a 30min job at most $60) is only a total of $100 MAX that it would cost the provider to install it. Remember they buy in bulk and could probly have a tec do it in under 10 min.

I think the ultimate way of doing it would probly be to charge for the hardware and delivery on the spot and pay the install and hosters profit off at $10 a month for 10 - 12 months.

But then of course theres no guarantee you will stay on for 12 months unless you sign another contract.

[GeekRack]

Actually no, if you dont have access to the server it doesnt mean that you lease the server, alot of providers have servers colocated as well.

Also, show me where i can get DDR2 1GB stick of RAM for 30 bucks :)

[fnixws]

MEMORY (1st Grade)PRICE
A Grade DDR 2 Memory
Thermaltake Cyclo RAM Cooler – Cools upto 4 Module $19
512M-800 Generic-Retail $19
1G-800 Generic / Apacer / Samsung $25 /$28/$30
1G-800 Kingmax / A-DATA(Hynix) / Transcend $30/$31/$30
2G-800 Generic / Transcend / Apacer $48/$51/$51
2G Kit-800 (2x1G) Apacer-H.S. / A-DATA–H.S. $67 / $77
1G DDR2 1066 PQA “HOT” “HOT” $41
2G Kit-1066 (2x1G) PQA $85
512M-667 Generic/Kingston/Corsair/Samsung $24/$27/$27/$27
1G-667 Generic / Apacer / Samsung $25/$28/$30
1G-667 Kingston / Corsair $27 / $31
2G-667 A-DATA(Samsung) / Kingston $55 / $79
1G Kit-667(2x512M) Corsair / Kingston $54 / $54
2G Kit-667(2x1G) Kingston / Corsair $53 / $56
4G Kit-667 (2x2G) Kingston $154


Ill sell you 1gig sticks of Generic for $30US each. Cheep ram for you, $6 per stick profit for me :P

[GeekRack]

Yeah, we dont use generic parts. That should be a no brainer :(

And in your post i only see one listing for DDR2 and 40 and thats still GENERIC

[fnixws]

List maybe hard to read, but they are all DDR2.

Basically it says
ITEM - BRAND1 / BRAND2 / BRAND3 - Price1 / Price2 / Price 3
1G 800 - Generic / Apacer / Samsung - $25 /$28/$30

Anyway, if you wish to continue this discussion lets take it to PM and give the poor guy his thread back.

[Dan]

Anyway, if you wish to continue this discussion lets take it to PM and give the poor guy his thread back.

Great idea. :beer:

[GeekRack]

Anyway, if you wish to continue this discussion lets take it to PM and give the poor guy his thread back.

Feel free to PM me i love a good debate :fangel:

[Richard]

How else are providers going to make money? I mean come on, the connections are mostly oversold now, hardware is all that is left.

PS: The main reason is, clients do not always like to pay all in one go. We (Galaxy Solutions, LLC) do offer some hardware on setup rather than monthly fee's. We did have them listed on our site at one point, but 95% of orders still came in with the extra monthly costs.

[DavidsAwesome]

Thanks for being honest guys... Just bugs me how people charge $20/month extra for RAM, when... in theory... its paid for after a couple months, and they're making profit for the remainder of the time... Plus, I guarantee you they don't buy new sticks every time someone wants an upgrade, they just move the sticks around and buy in bulk when they need to.

I know people need to make money though... (I feel the same way about our WHMCS license btw... my partner and I differ in opinions on whether we should go monthly or owned)

And, sorry for creating such a seemingly stupid thread, I knew the answer but thought I should make it well known that I think its BS.

[impactgc]

HW-David.

What happens if hardware fails? Does the hoster have the right to charge the customer again? No.

You are looking at this the wrong way. If a business doesn't make money it can't improve services, support, hardware and the list goes on.

Since you are in business you will find out what best works for you. But you will also find out that you need the "profit" to re-invest in your company.

Good luck.

Adam

[Eclouds]

That is very true. Companies try to maximize their profit while keeping expenses low in order to get the most out of every service offered.

To have a one time fee on VPS upgrades would not be wise as it would limit the potential income (as mentioned previously). Most if not all businesses are doing what they are doing in order to make money. It's how the world goes round.