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Klaba: OVH to increase prices because 'cost of RAM is increasing'
#Ovh The cost of RAM is increasing. In December-January, we will have an impact on the prices of our products for new orders only.
Comments
More like: "Due expanding, our operating costs increased while we did not sell as many machines on the new locations as we expected. On top of that we gotta keep our new investors happy".
Are there some difficulties manufacturing RAM?
Which RAM cost increased recently? I have seen the contrary - i.e. RAM is now much cheaper than a year ago,
Maybe they live in a different world?
I found this on Google, article from 2014:
http://www.gamersnexus.net/industry/1557-why-are-ram-prices-so-high
OVH probably needs to pay some dividends to its investors...
There could be market-related forces at work (manufacturers pivoting to solid-state memory for phones, futuristic bacterial memory that can hold state, etc...)
And then back in the day (~15 years ago) there was price collusion. But the Attorney General of California supposedly shut that racket down and sent us all checks in the mail.
Guess they import RAM from Norway..
Someone answered with this to his tweet: https://pcpartpicker.com/trends/memory/
So it seems as it's not the investors wanting their money back faster.
In French business, you generally need a very good, very smooth excuse to raise prices. Otherwise everybody gets upset and protests.
Everybody still gets upset anyways. But it's good cover.
Well perhaps on the scale that they purchase ram you cant apply standard market knowledge, if it is BS though I don't know why they announce it like that.
I would always have WAY more respect and acceptance if a company said, "we are raising prices as of 'date' due to our increased operating costs.
Or they could just pull a WHMCS by saying, we are bigger now and are of more value to you so we charge more.
I saw some German sites report that ram prices are increasing because a lot of ram is manufactured for smartphones these days.
DDR3 ECC unbuffered RAM has more than doubled I'm the past couple months. It was like $120 for a 4 pack of 8GB modules but now it's past $250.
It added an additional $4k to our latest Slice roll out.
Francisco
How much did you save on bandwidth? How much did you blow on blackjack and strippers?
Well I haven't saved anything yet :P
The blackjack and strippers we don't discuss.
We do have a plasma drive happening later this week though.
Francisco
Apparently one of the typhoons that went through caused a significant disruption to the RAM supply chain. It is causing some issues with some RAM pricing.
Trying to get ahold of DDR3 ECC SODIMM ram is a pain. I have to customer order it from a company because its a 8 week lead time on the name brand stuff.
ram is like gold/stock market - buy low
Would you say this extends to buying high RAM servers on sale even if you don't need them in case you do need them in the future? The risk of RAM affecting prices is very concerning for those of us depending on high RAM configurations.
I knew I should have got another 8GB.
Seeing a 40% increase on amazon.in.
We also noticed a price increase on basically all DDR3 and DDR4 ECC modules that we order from time to time in higher quantities. Some larger modules are even difficult to get these days - already got some DDR4 ECC REG modules in backorder for about 3 weeks.
DDR3 is fine here, 22 Bucks for 4gig. SODIMM even 20.
DDR4 new is same price in EU still (just got 2x16GB SODIMM for a Skylake laptop, around 50EUR per module without VAT from Amazon)
Used DDR3 8GB are 16EUR, 16GB 40EUR, 4GB 7.2EUR. No changes yet, 250+ QTY available of each at my sellers.
Millions of old modules are currently pushed into the market by eg. AWS upgrades, so i doubt price will change much but still stocked up on each size in case.
New DDR3 costs a lot now/probably more shortly, but only idiots buy that.
DDR3 unbuffered was always expensive and is a niche product (only some AMD and E3s), the production QTY is far lower than registered.
Skylake E3s use normal registered IIRC so there is zero need for unbuffered modules anymore.
Kimsufi use non-ECC RAM, maybe those won't be affected.
let's make orders make new stock
For example, I'm planing to buy low end LTS SSD ECC Server in EU.
OVH - 852 euro per year
Hetzner - 827
Online.net - 420
They are more expensive than competitors right now.
That wouldn't be smart business. OVH buys stock and then sells it. If they didn't spread the price increase across the board, classical economics would dictate that demand would shift to Kimsufis w/o ECC and their ECC stock would go unsold and be sunk costs.
But as a business strategy, OVH really needs to pivot away from low end, low margin servers. Their investors didn't drop dough to get peanuts in return.
We don't buy Kimsufi for the same reason we buy an E5.
How elastic is the demand for ECC?
Or in other words: If ECC boxen increased in price by 30% - how much demand realistically do you reckon would shift away to non-ECC? (assuming everything else stays the same)
I know what price elasticity means, but thanks
First of all, what part of the price is the cost of RAM? Say it's 20% (just guessing). That means that a 30% price of RAM increase translates to 6% increase in price. Obviously only the provider has the kind of data we need to estimate the elasticity for this (I mean, based on past consumer behavior).
That said, the cost increase is only a part of the equation. Is a 6% enough to persuade a non-trivial amount of people to move production stuff into a Kimsufi range, with all its disadvantages?
According to the statisticians in this thread, RAM has doubled in price: so it's not 30% but 100%
So OVH might have to pay 18-30% more for an ECC server, which it then turns around and sells to the end consumer. How much value does ECC really add? (Mind you: I don't run anything personally that needs ECC. To me, ECC adds no value.)
I predict OVH will raise prices across the board by at least 20% - and 45% on low margin VPS SSD products.