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Then that's reasonable.
Costs to much CPU..
Frontrangehosting was selling KVM's @ $1.5/mo!
Assuming everything is LEB prices? Wrong.
Assuming we even use E3's for KVM? Wrong again.
There is a healthy profit in it, don't hate... appreciate :-)
It doesn't matter if the final target is 1.5/month KVMs, the main focus is looking at how we can work the back-end in order to fit the price scheme of the LEB model.
So the only way to do this is basicaly get a full rack at someplace like corespace for 475.00 and have a bunch of servers and amotorize them over 2-3 years.
It is not a 3-6 month start making profit adventure.
No matter how you work it @ $1.5/mo is pretty cheap don't you think?
@BradND I am not stating that every thing is LEB pricing. I am starting to see these prices on providers websites as the normal price. I am trying to figure out how to make it work. With dual E5 and a ton of memory I can see it getting more profitable but at anything less than $7.00 it doesn't even really pay for the hardware.
well the LEB/T model works fine with Xen/KVM, example, lease a server for €200 with 32GB Ram, sell at €2.50 p 256mb so the revenue per server is around €300 and €100 is your profit. obviously any ones that you sell at full price elsewhere is a bonus.
Or if you are going colo then buy a server and work out your colo costs and try to keep it to €2400 for year 1 and you still get €100 p/m profit which goes up in year 2.
It is not that hard but it is lower margins than OpenVZ for sure as you can sell any old crap 8 (is that an elephant in the room?) times over pretend your selling dedicated ram when you are not and make €400 - 600 per node profit.
Wow that's good profit for one node!
Pay €200 for a node with 32GB, install OpenVZ, oversell it 4x which it is more than capable of doing.
Sell at $7 p/1GB and that is $896
Do the rest of the maths.
why do you think all the kiddie hosts do OpenVZ?
That just seems like good business, the question is why do you feel so good about the fact that other "kiddie hosts" are making more money/node than you.
If they can provide a good service, then OpenVZ is fine.
If you said "OpenVZ is easy to install and providers like OVH provide templates for their dedicated servers to get it up and running and the level of technical knowledge required is so miniscule, that it enables people like shovenose to start up in the business.", then I'd be inclined to agree.
@Syed my issue(s) with it are that it is now so easy that kids pop up right left and centre without the ability to back it up when things do not go to plan, shovedos is a great example.
The second part of my issue is that it is sold as if you are getting dedicated resources when you simply are not 9/10 times.
It has nothing to do with money directly, I personally built my business on dedicated resources to the highest quality I could manage and had enough cash to back me up for a long time while others build a business on, what is the cheapest combination of ram+IP's they can find regardless of quality and how many times can I over sell that.
Personally right now I think it is a waiting game, the bubble will burst sooner or later and those that have built a solid base will survive and those that reply on nothing but cheap IP's and OpenVZ will fade in to the wind, if Inception hosting did not get another order in 2013 it would still be a profitable business and survive.
I read a comment on a WHT post the other day that said something like, the only thing that is changing in openvz is that people are allocating more ram per package for the same price and everyone else follows the same pattern in some sort of resource war, that is obviously happening and no one can deny that however they are doing it on exactly the same hardware that was in use 2 - 3 years ago selling 1/4 the amount of resources for the same price.
I have seen people throwing the but what if I am using dual E5's with 256GB Ram... well yeah ok but that would cost 4 x as much as an E3 with 32GB of ram so has no real bearing.
Just gonna throw this out there... an E3 1230v2 with 32GB ram 4x1TB HW raid costs us $128 a month.
@BradND, u offer dedicated ?
@darknessends Soon :-)
Colo costs
only doing 32 kvm's per e3
cost of the server
@BradND
He was mentioning about Colo costs & the cost of the node, and then staffing costs, if you're a 'solo' guy, then your costs are already reduced without the overheads of staff.
There are three of us @ND the full rack is uh... ~600 ish
@BradND to rent?
Hetzner dont do E3's iirc so I would think it is colo.
To me the margin is just not enough. There are those of us who do offer dedicated ram and that is all we offer. No burst. Yeah we oversell a little bit but not x4. Regardless. OpenVZ is where I can build my business with profit. In the future I can use that to fund the other stuff when it becomes cheap enough to make a decent profit.
@BradND So the server costs $128 the rack $600. What U size are we talking on your servers? 2U?
Hetzner does both E3-1245v2 (69 €, 32GB RAM) and E3-1275v2 (99 €, 32GB RAM) and they just added a Dual E5-2620 w/128GB RAM
Well blow me down!
Then the margin would be exactly the same which gives no reason to use OpenVZ at all
Just added it all up.
the base model is €69 however with HW Raid, 4 x drives, IPMI, flexi pack, IP's it is €198 p/month with a silly €399 setup fee.
eq of €231.25 p/month in year 1.
so 30 x €7 does not compute
@AntonySmith and good luck paying for multiple /24's from hetzner!
30 x €5.5
@BradND, what's your load on that single E5 2620 with 64 VMs?
They have a max of /27 per server since a few months, so Hetzner is out of the question IMO.
Source: http://wiki.hetzner.de/index.php/IP-Adressen/en
@George_Fusioned, you can still get it if you have the language skills.