Split from What host..?

[Webdude]

Originally posted by Bruce
For decent bandwidth, yes. However, for hosts using Cogent primarily, they're only paying about 20&cent a gig.

We may soon be offering some Cogent bandwidth if I can get a connection run to our new location. However, we will still charge normal price for bw. It's the smart way to stay in business in case Cogent goes under.......since they have yet to break a profit... I am putting ourselves into a great position in case that happens. Ths way when RS and other places using Cogent as their primary fall on their faces when Cogent falls...we will be there to take up the slack

 

[FHDave]

Originally posted by Webdude
Ths way when RS and other places using Cogent as their primary fall on their faces when Cogent falls...we will be there to take up the slack

Actually, if you really spend some time looking at Rackshack's network page, you will find that (calculating only the outgoing bandwith measured on average), RS is only using cogent for 20% of its outgoing bandwith. In fact, 50% of RS outgoing bandwith (2.5 times more than that on cogent) is routed via Verio.

When Cogent falls, RS will sustain and many hosts based on RS too will sustain. In fact, at a GigE level, I have heard that Verio's pricing is not really that much different that Cogent's.

PS: I would hope that a host (especially a moderator) won't/shoudln't comment on any other hosts, especially when the comment is rather negative and baseless.

 

[the elf]

Originally posted by FHDave


Actually, if you really spend some time looking at Rackshack's network page, you will find that (calculating only the outgoing bandwith measured on average), RS is only using cogent for 20% of its outgoing bandwith. In fact, 50% of RS outgoing bandwith (2.5 times more than that on cogent) is routed via Verio.

When Cogent falls, RS will sustain and many hosts based on RS too will sustain. In fact, at a GigE level, I have heard that Verio's pricing is not really that much different that Cogent's.

PS: I would hope that a host (especially a moderator) won't/shoudln't comment on any other hosts, especially when the comment is rather negative and baseless.

Seems you missed the "(Moderated by: Chicken, Jan, Mandrake, Peo, Todd)" at the top of the index of this forum. Do you see Webdude?? I don't! Then he's not a mod here (on this forum anyway ). Next time read the whole page.

Second, I bet a good chunk of RS's profits comes from Cogent and Verio if they are priced the same. How long do you think these providers will be around for?? My guess would be not that long. Will RS be able to provide the same service for the same amount if the cheap backbones die?? No. Less and less people will buy buying dedicated servers if they have to pay more i.e. less and less dickwad hosts will be around. The dickwads are what makes RS.. well.. RS.

I don't think his comments were baseless, all he's doing is saying the truth. Seems your too blind to see the truth.

 

[FHDave]

Originally posted by the elf
Seems you missed the "(Moderated by: Chicken, Jan, Mandrake, Peo, Todd)" at the top of the index of this forum. Do you see Webdude?? I don't! Then he's not a mod here (on this forum anyway ). Next time read the whole page.

Ahh... I see... his custom title has fooled me. Bad webdude ... bad ... My apology to webdude, but still ... I think host should not comment on other hosts (been trying to do the same, although it's hard I know ).

Second, I bet a good chunk of RS's profits comes from Cogent and Verio if they are priced the same. How long do you think these providers will be around for?? My guess would be not that long.

At 100Mbps, Cogent is around $30/mbps and Verio is about 3 times that (I have heard somebody quote $90/mbps for Verio at 100mbps). But when you buy a GigE, then you have a great negotiation power on the bandwith price, no matter which provider you choose. Level3 is another great bandwith provider, and I have heard people can get around $160mbps only at 10Mbps commitment.

Will RS be able to provide the same service for the same amount if the cheap backbones die??

What is cheap backbone? Verio is not really cheap when you only buy 5 Mbps. And almost all providers (even tier one providers) will become very cheap when you buy GigE. So, again, what's cheap backbone? I consider Level3 at $160/mbps at 10Mbps commitment very cheap already.

No. Less and less people will buy buying dedicated servers if they have to pay more i.e. less and less dickwad hosts will be around.

Even if Rackshack increases its price by 10-20%, most people will stay with them. Where else can you get 400GB of transfer (and a server) for around $150/mo? You will be able to see this offer at other places who use cogent primairly. But, again, RS does not use cogent primarily.

Oh BTW, in case you don't know, VERIO is a tier one provider (unlike cogent). Although their price can be cheap, their network is in no way comparable to Cogent (which is not a tier one).

I don't think his comments were baseless, all he's doing is saying the truth. Seems your too blind to see the truth.

When somebody says that RS is using cogent primarily, that comment is indeed baseless. I spend 1 minute on RS network page to calculate how much of rackshack bandwith is cogent and it turns out only around 20%. 20% does not seem to be primarily cogent for me, does it?

As far as network is concerned, I think Internap is the best and I am with the best And ... I pay a lot more than cogent bandwith, but what I am paying is indeed a quality bandwith. But that's different story

Anyway, I am not with rackshack. I just can't stand it when people make a baseless comment

My apology for dragging the thread to go OOT.

 

[the elf]

Originally posted by FHDave


Ahh... I see... his custom title has fooled me. Bad webdude ... bad ... My apology to webdude, but still ... I think host should <SNIP SNIP> stand it when people make a baseless comment

My apology for dragging the thread to go OOT.

Let's look at it this way.. Cogent (and all the cheap providers, even at Gbps feeds & tier 1) figure out, "hey, why are we selling this so cheap?? There all gone (cheap backbones), let's jack the price". Last year I bought 512 MB ram for $99 CAD. Today, it's $200+. Why?? Because the company that made my stick was purchased by another company. They have nobody to have a "price war" with and can now recover any monies they lost in the war.

Another fact, RS makes the profit off cheap connections and hosts that don't use the full amount of sold bandwidth. If you jack the price for the people that only use 5% of the bandwidth, they will either 1) cancel, 2) pay. If they cancel, RS loses the "edge" they have and the saying "it's only $99/month" is gone as anything over $100/month to a normal person would be a big impact to ones income if they only do hosting as a hobby and/or don't have lots of cash to play with & if they are at RS, that's about sums it up! Take the knife (edge) away in a war, and your dead.

When you define a cheap provider, your still using todays market with cogent and other <$200.00/Mbps providers. Take the <$200.00/Mbps providers out, and you'll see a new wave of prices. As Webdude has stated, he's planned for such. His customer won't feel the "impact" of a hike in price, however, the companies that don't plan, will. As a host, you should know that...

 

[Editor]

Originally posted by the elf
Another fact, RS makes the profit off cheap connections and hosts that don't use the full amount of sold bandwidth.

Do other providers only accept clients/hosts that are going to use up all of their bandwidth...?

Gary

 

[the elf]

Originally posted by Editor


Do other providers only accept clients/hosts that are going to use up all of their bandwidth...?

Gary

Ugg, when you do the math (400 x .20 = $80) which leaves them $19 profit. I'm sure RS can't be supported by $19/server ($19 x 8000 = $152,000.00, and yes, I'm sure they have more then 8,000 servers) when you factor in costs such as workers, power etc. Plus, you have to add the cost of the hardware too. The fact is, a provider will accept a customer that uses 100% or 1%, but my point is even if they use 100%, there should still be a profit for the company. With RS (and others) they have no room for profit, if the customer uses 100% and no, I don't call $19/server a profit.

 

[Editor]

Originally posted by the elf
With RS (and others) they have no room for profit

That's better. That was the only point I was making mate. They are hardly alone in playing the numbers game. Except, the numbers *are* on their side.

Cheers

Gary

 

[Archbob]

Common guys, how many people actually use 400 GB/month ? I think maybe 10% of their clients.

 

[Editor]

Only 1 of our RS boxes does. It cleared 1100GB once a few months ago. But then, some others use <30GB.

Cheers

Gary

 

[FHDave]

Originally posted by the elf
Ugg, when you do the math (400 x .20 = $80) which leaves them $19 profit.

As somebody has already mentioned, how many customers use up all 400GB/mo? If you just spend one minute on rackshack network graph, then you can roughly calculate the average of (outgoing) traffic used is around 75GB/server (assuming Rackhsack hosts around 8000 servers). Now do your math again.

But even if every server is use up all their bandwith, Rackshack will still be profitable. Note, your calculation is based on a $99/mo server, but RS has been selling a lot of $129/mp and $149/mo servers. Regarding their network, also remember that Rackshack's parent company, EV1, is the one that running rackshack's network. And EV1 is very profitable. Read: http://thewhir.com/marketwatch/rac041002.cfm

But anyway, you will agree with me that Rackshack is not primarily Cogent, won't you? That's my whole point. Not defending Rackshack, but to say RS is primarily cogent is very baseless.

 

[Webdude]

I saw a post by Headsurfer somewhere that they host 60,000 servers.

On the other hand, Cogent also colo's at other providers such as Level3. It's a matter of who you are running the local loop thru. If you run it through UUNET, the traceroute will show UUNET although it is actually Cogent bw you are connecting to from that loop and on to the rest of the net. On local loops, you get charged a monthly fee, not a line or traffic fee like you do if you were sitting right on the backbone.

So if I set up a connection from Conroe Tx to use Cogent, I have to use a local carrier. That would be TXU who uses a pipe thru UUNET to get down to the major pop, which then I connect to cogent. I would be charged an access fee through TXU (which shows on traceroute as UUNET), and then my bw provider would be Cogent. Doing so, I could of course claim I use UUNET bandwidth as my primary, and Cogent as a secondary. Since Cogent is colo'd at Level3 at Greenspoint, that is the closest local pop. So I would use level3 instead of UUNET with a local loop thru TXU. I could claim I use TXU, Level3, and Cogent. I could setup mrtg graphs for each one as well. I wouldnt be lying either by doing so. Once you know how it all works, you come to the common conclusion that their "actual" bw is using Cogent.

RS could very well not actually use cogent as much as I believe. I am simply showing how it is obvious to me that they are. They wouldnt be lying to you if they did the above. If they wanted to lie to you, they could simply run everything through cogent, and make all their mrtg's show something else such as UUNET. Being that's the local carrier they might be using before getting to cogent, a traceroute would show the same. As I said, Cogent is also colo'ed by other dc's.....meaning you can hide their name in a traceroute or search since they can piggyback other carriers.

So you draw your own conclusions, and I will draw mine..

 

[the elf]

Originally posted by FHDave


As somebody has already mentioned, how many customers use up all 400GB/mo? If you just spend one minute on rackshack network graph, then you can roughly calculate the average of (outgoing) traffic used is around 75GB/server (assuming Rackhsack hosts around 8000 servers). Now do your math again.

There is something you need to learn, and fast. If they sell 400 GB, they better be able to provide the full 400 GB at a profit, as right now, there pricing system does not allow for such. When your selling services, you have to think that every customer will use the full amount of "service" sold, why else would they have bought in the first place. Your playing the "what if" if game, and you don't play that when your running a biz or offering services. If you play "what if" with your customers, I feel sorry for them already. If the customer does not use the full amount sold, it's the hosts bonus, however, you don't develop your biz plan (as RS did) on "what if".

All the servers cost the same (bandwidth wise), the high-priced servers are more because the hardware is more. So really, they make the same regardless if they sell a $99 server or a $149 server.

 

[FHDave]

Originally posted by the elf
There is something you need to learn, and fast.

You talk as if I am a newbie in this industry. Please do assume that I know about this industry more than you think I do.

If they sell 400 GB, they better be able to provide the full 400 GB at a profit, as right now, there pricing system does not allow for such.

I do agree with what you said. In fact, we ourselves do not oversell our bandwith and will never do. And I do personally hate if I meet other hosts that do oversell.

But I am very intriqued with your comment above. How do you know about all these? Or perharps you are a data center consultant or a bandwith broker that you knows everything that's involved in a day-day operation of a datacenter? Or have you also considered Rackshack's virtual hosting clients base? Or have you considered the relationship between RS and EV1? It will be unwise to analyse RS without even considering EV1 (and vice versa) since RS business model is build on the unique relationship between RS and EV1.

When your selling services, you have to think that every customer will use the full amount of "service" sold, why else would they have bought in the first place. Your playing the "what if" if game, and you don't play that when your running a biz or offering services.

I do completely agree, but I believe on the other hand you are thankfull that the whole telco industry is build on overselling (telco without overselling won't survive) ideas. My cell phone provider, Cingular, gives me 800 minutes of peak calling time and 3500 minutes of off-peak/week-end calling time. If only Cingular (as well as ATT, Verizon, Sprint, etc) were to play save, then I will be paying around $640/mo (at $0.4/minute), about 7 times the amount I paid right now. Even your local phone providers are overselling right now; does that make you decide to switch to different provider that will charge you by minutes instead of by call?

If you play "what if" with your customers, I feel sorry for them already.

It only takes you 10 seconds to visit our site and see whether we play the average game.

If the customer does not use the full amount sold, it's the hosts bonus, however, you don't develop your biz plan (as RS did) on "what if".

This is what some people don't see. I believe it's different for me (or even Burst.net) to play the number game than it's for RS. To understand RS, you need to understand not only RS but RS and EV1. Look at the URL I gave you that shows how strong the financial report for EV1. Also check this out: http://thewhir.com/marketwatch/eve030702.cfm to see that it is most likely EV1 that operates RS network (also refer to EV1 financial report I gave you before).

Don't get me wrong. I have no relationship with RS and I hates the number game. My business model is build solidly. I use one of the best (if not the best) networks money can get. And I do not oversell my server/network resources. I am running a quality hosting here.

What I don't like is for somebody to make a statement on without really knowing for sure what they know.

All the servers cost the same (bandwidth wise), the high-priced servers are more because the hardware is more. So really, they make the same regardless if they sell a $99 server or a $149 server.

I do not know for sure how RS business model is so I won't make any comment. But RS/EV1 financial report has shown otherwise and they are growing strong. If their business if build on overselling, then so be it ... I can't say anything about it nor will I try to be smart to say anything about their (RS/EV1) business models/financial strategy.

All I have said since the beginning is that somebody is really making a baseless comment to say that RS is using cogent primarily, and now there is somebody else being very defensive about my comment. I am not sure why.

But again,

Do you agree with me that to say RS is using primarily cogent is to make a baseless statement?

Have a nice day ...

 

[FHDave]

Originally posted by Webdude
So you draw your own conclusions, and I will draw mine.. [/B]

Conclusion is drawn after knowing the fact, not after thinking of hypothetical "if" cases. So, what is your conclusion? Is RS using lying in saying they are sending more than 50% of its outgoing bandwidth through verio? What factual evidences will you base your conclusion on?

 

[the elf]

Originally posted by FHDave


You talk as if I am a newbie in this industry. Please do assume that I know about this industry more than you think I do.

I'm not the one that brought up the 75/GB a server, then come here and say "oh, their making a profit".

I do agree with what you said. In fact, we ourselves do not oversell our bandwith and will never do. And I do personally hate if I meet other hosts that do oversell.

But I am very intriqued with your comment above. How do you know about all these? Or perharps you are a data center consultant or a bandwith broker that you knows everything that's involved in a day-day operation of a datacenter? Or have you also considered Rackshack's virtual hosting clients base? Or have you considered the relationship between RS and EV1? It will be unwise to analyse RS without even considering EV1 (and vice versa) since RS business model is build on the unique relationship between RS and EV1.

Gosh, a little common sence can figure that out. Why would I consider the virtual host base when dedicated servers are the "core" of the operation?? Do you think virtual hosting could keep RS alive? It's just there as another little "money grabber". As far as I know, EV1 is a dial-up internet provider (kinda like my local ISP - Access, Hosting etc). Do you think EV1 could support RS??

I do completely agree, but I believe on the other hand you are thankfull that the whole telco industry is build on overselling (telco without overselling won't survive) ideas. My cell phone provider, Cingular, gives me 800 minutes of peak calling time and 3500 minutes of off-peak/week-end calling time. If only Cingular (as well as ATT, Verizon, Sprint, etc) were to play save, then I will be paying around $640/mo (at $0.4/minute), about 7 times the amount I paid right now. Even your local phone providers are overselling right now; does that make you decide to switch to different provider that will charge you by minutes instead of by call?

Again, you missed my point. When companies target res users, it's fine to oversell, because no home user would use the full amount, however, in B2B you can't oversell. I bet you have a res cell package, not a commercial one.

It only takes you 10 seconds to visit our site and see whether we play the average game.

This is what some people don't see. I believe it's different for me (or even Burst.net) to play the number game than it's for RS. To understand RS, you need to understand not only RS but RS and EV1. Look at the URL I gave you that shows how strong the financial report for EV1. Also check this out: http://thewhir.com/marketwatch/eve030702.cfm to see that it is most likely EV1 that operates RS network (also refer to EV1 financial report I gave you before).

Why would I want to look at that for?? It's strong because they use cheap connections, and by selling more then they can provide at a profit. If you take out the cheap connections, and if the servers used the full 400 GB/month you'd see a large problem with RS. That's what I've been telling you all along, yet you keep coming back with "current" markets rather then markets without cheap providers. Like I said before, the cheap deals won't be around all the much longer. Companies are not going to keep on losing money, just to make people like RS happy. Once the price war is gone, so will RS.

Don't get me wrong. I have no relationship with RS and I hates the number game. My business model is build solidly. I use one of the best (if not the best) networks money can get. And I do not oversell my server/network resources. I am running a quality hosting here.

What I don't like is for somebody to make a statement on without really knowing for sure what they know.

I do not know for sure how RS business model is so I won't make any comment. But RS/EV1 financial report has shown otherwise and they are growing strong. If their business if build on overselling, then so be it ... I can't say anything about it nor will I try to be smart to say anything about their (RS/EV1) business models/financial strategy.

All I have said since the beginning is that somebody is really making a baseless comment to say that RS is using cogent primarily, and now there is somebody else being very defensive about my comment. I am not sure why.

But again,

Do you agree with me that to say RS is using primarily cogent is to make a baseless statement?

Have a nice day ...

Again, the reports you showing people here are based on TODAYS market, add a few options to it, and you'll see it fail. The loss of $30-$100/Mbps connections as an option would impact the report.

How do you know that the network status page is not fake?? Only two people know, RS and the provider. It's not that hard to change around numbers on a web site and rename a few files. There are ways to mask connections (as others have said already).

Now, let me ask you this question, if RS users used all the 400 GB/month, do you still think RS would use non-cogent bandwidth??

Conclusion is drawn after knowing the fact, not after thinking of hypothetical "if" cases. So, what is your conclusion? Is RS using lying in saying they are sending more than 50% of its outgoing bandwidth through verio? What factual evidences will you base your conclusion on?

When you consider the amount of overselling they do, what would one think?

 

[Editor]

This thread has got the makings of a perfect Mystery Romance novel...

Gary

 

[Chicken]

Originally posted by the elf
There is something you need to learn, and fast.

This thread has all the makings of some people posting without having any idea of what they are talking about. Seen the earnings for RS/EV1? My guess is no, but you might want to have a gander and then explain how they don't know what they are doing, you do, and how they are failing at what they are doing, and that their plan is wayyyy off.

Originally posted by Webdude
Ths way when RS and other places using Cogent as their primary fall on their faces when Cogent falls...we will be there to take up the slack

It's a nice dream isn't it? Yeah web hosts should be commenting on other web hosts, unless that's been removed from the guidelines and no one mentioned it.