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Peak Hosting In Financial Trouble
Read this earlier today and thought it was interesting enough to repost: http://www.thewhir.com/web-hosting-news/report-data-center-provider-peak-hosting-files-for-bankruptcy
Basically, Peak Hosting, which is a major player, is in financial trouble because its largest customer, which attributed to 80% of revenues canceled. Their major customer was Machine Zone, the maker behind popular games including Game of War and Mobile Strike.
Cannot imagine the stress that must be going on for the people that work at Peak Hosting. Very sad.
Comments
Why don't you say something about that email one of your employees sent to vpsboard?
Ha!
Good opportunity for a buyout?
Just sayin... imagine what it would be like if all the spammers cancelled
"The customer is Machine Zone, maker of the popular mobile games Game of War and Mobile Strike. Last year, following a Peak Hosting data center outage, Machine Zone started moving its infrastructure into a different facility in Las Vegas, according to the report."
Glad to see @Francisco won the Machine Zone contract.
But seriously...
This is a classic small business problem. You accept a large contract from a big customer that becomes 80% of your business, and then that customer goes away/cancels/etc. Now you're stuck with tons of gear and equipment and resources and people...layoffs and/or bankruptcy follows.
... then there wouldn't be LET
We are talking about 14 million USD per month... Crazy amount.
>
Or to protect yourself you require a large up front down payment, or worse, a long term contract, and then you stand no chance of winning the customer.
@OnApp_Terry article says that they claim they are in a contract with them that does not allow them an early cancellation, yet the Customer moved the services and stopped paying after their outage.
Correct, until October. Peak Hosting is suing them for 100 million USD for compensation, although, I "suspect" they had, and broke, their SLA (and probably many times?), causing Machine Zone to look elsewhere to host their servers. If that is the case then I don't think their lawsuit against Machine Zone will get them anything...
It's the same idea though. I'd much rather have thousands of customers that buy a few plans each than 5 clients that buy 90% of my stock.
It's the old saying of 'If you owe the bank $1000, you bank owns you. When you owe the bank $1,000,000, you own the bank'.
Francisco
What? Francisco hosts them now?
Congrats @Francisco , be careful though otherwise this is what happens. I wish you the best!
Did I miss something? What's about?EDIT: That's clear now.
No....
Congrats @Francisco
/s
Having your largest customer represent 80% of your revenue stream is no doubt an example of senseless leadership at Peak Datacenters. A mouse could have predicted something like this given the facts at hand.
Should have spent that money on a great sales team to help reel in a few more big fish. Having one customer represent that much of your income is fine, for a bit, if you're not going to let the cash roll in and pretend that it's permanent income.
I'd guess that 80% of your customers have 1-2 VMs...true?
I'm curious actually how many VMs your biggest customers have but understand if you don't want to discuss.
Why do I get the feeling that something else is happening here ? Might be the SLA agreement that's causing trouble at Peak Hosting ?