New on LowEndTalk? Please Register and read our Community Rules.
All new Registrations are manually reviewed and approved, so a short delay after registration may occur before your account becomes active.
All new Registrations are manually reviewed and approved, so a short delay after registration may occur before your account becomes active.
How can OVH and WebNx offer products at such a low price
Question:How can OVH and WebNx offer products at such a low price?
I came across some of their Dedicated servers. It was ridiculously cheap, how can they do that?
Low price makes me think twice.
I heard OVH was about to go bankrupt before and they got bailout.
Thanked by 1Servy
Comments
what a clever way to advertise webnx lol
ovh is cheap cause of automation and non existent support.
lol
Source?
Sometimes they go for super long ROI on the hardware, it's becoming usual for these to go even 3+ years. In case of OVH and Leaseweb cashflow seems to be more important than actual profit, they are probably getting cash for less than 1% interest rate and they just need to get some growth numbers done. Sometimes that type of activity is also done when a company plans to get sold to bulk up the numbers.
The end is nigh on this one.
OVH: It's easy when you get literally billions of free money.
WebNX: They get some insane deals on hardware. He got me some deals and saved me a boat load of cash.
Francisco
like every other big company gets, I'm not aware of any big successfull company which don't get a shitload of free money to do something somebody wants. If you haven't grabbed it bad decisions of yours I guess or you are simply to small to matter to the guys who give out all the free money
I dont want VC, but thanks.
Your comment doesnt change what I said though. OVH got $500M from the french banks and government and OVH US got over $1B in VC.
Would they do loss leaders if they had to post a profit? Probably not as many.
Francisco
Francisco
Looks like the entire kimsufi brand is just loss leaders more or less. I still remember when their 2-3€ a month dedis was all the rage.
I don't think OVH is that cheap. Soyoustart and Kimsufi are, they probably take a loss on those but OVH Public Cloud and OVH dedi's are pretty expensive. There are a lot providers offering similar servers for less money.
Nah, they make profit on that stuff.
Agree, as first of all they do oversell bandwidth and the brands like Soyoustart and Kimsufi they do clearing the old servers which used to be on OVH.
OVH - premium dedicated servers hardware
Soyoustart - slightly older stock directly from OVH
Kimsufi - old hardware which they can use to squeeze some profit as hardware already paid for itself on above brands
Every big company has one of those guys that says, "we'll make it up in volume".
I'm desperately waiting for your offer in LET
When your running costs exceeds the revenue, how do you make it up in volume if every unit makes a loss?
I guess you hope that for X loss leaders you get 1 better paying Customer that make up for it thanks to free marketing. Dunno - not something I’ll ever do.
Not happening in the near future, we are good with small amount of client. Easy and Sustainable.
Thank you though!
That's the joke.
It's taking the idea that the more you build, the lower your per unit cost is (check the quantity pricing on Digikey, for example), while failing to realize that doesn't always apply.
If you seriously run into it at your company, most likely an executive has stock that they'll dump after juicing the sales numbers before the losses are known. And they're doing it intentionally.
The product lifecycle is right, tho..
Just have in mind : electricity / employees / datacenter investment / hardware replacement costs (HDD..).
Don't think that Kimsufi is only profit.