no joke, $700 reseller plan

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Posted by samdax, 07-01-2005, 04:04 AM
Nice offer http://www.dynamicnet.net/resellers/...an_compare.htm
Posted by sober, 07-01-2005, 04:30 AM
A robbery in the light of day Setup $0 $0 $0 Monthly $150 $325 $700 Yearly $1,650 $3,575 $7,700 Bandwidth Transfer in GB 10 20 50 Disk Space 1 GB 3 GB 7 GB
Posted by Gold1234, 07-01-2005, 05:10 AM
costs for reseller plans should be high anyway IMHO.
Posted by dollar, 07-01-2005, 05:34 AM
They better provide the world's best support for those types of costs. For that amount of money you could get a top quality managed dedicated machine, and in some cases still have money left over.
Posted by Suffolk Designs, 07-01-2005, 07:09 AM
It just means with there no overselling guarantee that they can probably create the same revenue per server occupied with resellers as they can with a server occupied with virtual hosting clients. Nothing wrong with that, wish more people would charge more for reseller plans and eliminate overselling. Would make for fewer server problems.......
Posted by Jim_UK, 07-01-2005, 08:31 AM
If you don't like the costs, don't buy! It's simple. What gives anyone here the right to call them robbers... they are clearly aiming their product at a different market to the WHT crowd and if they can get those costs then good on them.
Posted by dollar, 07-01-2005, 08:31 AM
Jim has a point As we all sit here and discuss why in the world they would sell that high, they take care of one client where most hosts on WHT would be taking care of 70 or so.
Posted by ldcdc, 07-01-2005, 09:13 AM
Peter from Dynamic.net will laugh so hard when he'll get to this thread.
Posted by unity100, 07-01-2005, 09:34 AM
definitely a joke i say.
Posted by Aussie Bob, 07-01-2005, 09:49 AM
I agree!
Posted by unity100, 07-01-2005, 09:56 AM
we definitely would like to know about the details of this aforementioned 'market' indeed.
Posted by gilbert, 07-01-2005, 10:45 AM
put me down for 2 and one for the lovely lady over at the bar
Posted by kris1351, 07-01-2005, 12:10 PM
Actually it is how hosting should be sold, they get 100% managed server and server uptime guarantees. With them not managing 1000s of clients they can actually work on things such as clustered servers and providing great support. The budget hosting world is going to start going away I hope.
Posted by okihost, 07-01-2005, 12:38 PM
I am guessing that of you poking fun at them most of you are a little bit jealous deep down inside. I think its great and hats off to them for being able to pull it off.
Posted by Gold1234, 07-01-2005, 01:00 PM
Hosting industry is corrupt if you look at it. costs are too low and overselling is just a joke. Domain costs should also be going up since more and more good names are being sold. There needs to be a way of limiting the amount of domains people buy really. Anyone can now also become a damn hosting company. All it takes is a $5 reseller plan and then really your laughing. The company posted in the topic is how we should all run. costs need to go up and if hosting companies work hard to support clients, whats wrong with the costs being high? The broadband industry is just about becoming the same, it is getting cheaper because all companies are competing each other with costs. It is really uncontrollable. So really it's kind of scary. It's easy to become a hosting company, and also it's easy to become bankrupt.
Posted by pmabraham, 07-01-2005, 01:21 PM
Greetings: Actually it is dynamicnet.net . The other domain is owned by another party not related to our company. Some things to consider: * We provide complete, full management (security, server, hardware, etc.). The servers are top of the line, brand name equipment replaced with brand new, top of the line equipment every two to three years (we co-locate). * This is our tenth year in business (nine of those ten providing Internet services). * The costs you see on WHT represent only a very small segment of the hosting market place. Our market is for those resellers who require full management (where we do not try to redefine the dictionary meaning of the words, "full, fully, complete."). Some are designers, some developers, etc. They want to concentrate on their core business; and let us take care of them fully and proactively. * Just because a company sells whatever product / service at whatever price does not mean they are making money. That stated, for profit businesses should be run for a fair profit. To calculate a fair profit, one must take into account every last aspect and cost of running a business including the cost of growth. Most providers with extreme opposite pricing of ours only calculate equipment prices taking little to zero into account for personnel (labor prices, benefits, retirement plans, health care, etc.), re-investment into the company, etc. * Lastly, after the dot com bust (which we lived through as we were founded in 1995 and on the Net in 1996), investors found out that dot com businesses have to run themselves just like any other brick and mortar business to survive and grow. That outlook translates into a lot of different branches (accounting, pricing models, etc.); but one of those branches are comparatives. If you owned a the base of the franchise model (i.e. you owned McDonalds or Burger King rather than being a franchisee there of), would you sell new franchises for $5.00 per month? Thank you.
Posted by dollar, 07-01-2005, 01:24 PM
Very well put if I do say so myself.
Posted by nogi, 07-02-2005, 01:20 AM
700 for 50GB transfer. Vow! costs has changed. There are ridiculous low costs, and this is an example from the other end of the scale. John Last edited by nogi; 07-02-2005 at 01:25 AM.
Posted by Torith, 07-02-2005, 01:28 AM
I wonder how many clients paying that type of price . Though I must say if they do have clients paying that they must be doing something right. Consider if they had 10 clients paying $700 per month that is $7000.00 while if another company charging $10.00 would need 700 clients to get $7000.00. It is quality not quanity .
Posted by dollar, 07-02-2005, 01:34 AM
Another portion of that is being able to really provide the quality I am sure they do. Many of those hosts that are charging $10 for a reseller account do not come close to what i would assume the service is like from dynamicnet.net. As mentioned in the post they do not try to redefine what is meant by "managed" which gives me the impression I can pick up the phone anytime I feel like it and my problem will be solved by highly skilled techs in a very quick fashion. Let's assume you would need at least 2 techs working at anytime during the day, and they are each working 8 hour shifts. That would work out to 48 hours in a day. These techs are not going to be cheap, but we'll just assume $15 an hour and 30 days in the month. 30 * 48 = 1440 man hours or $21,600.00 a month in prices. They would need 31 $700/mo accounts just to cover the prices of providing that staff and assuming they are making $15 a month. prices add up fast when you are trying to provide the service that this host is saying they provide (10 years in the business with costs such as theirs I would bet money they provide exactly what they say they do as well).
Posted by Torith, 07-02-2005, 01:49 AM
Well they would need more that in staff . Since staff need to have 2 days off per week, sick days, vacation time, ect. As well how you get 48 hours per day if there is only 2 staff? That would be 12 hours per employee though if they are only working 8 hours where od the extra 4 hours come from each employee? Or is there a third employee? Though considering they most likley have 4 staff to 6 staff on per day most likley (just guessing though).
Posted by dollar, 07-02-2005, 01:54 AM
I never said how many staff members there were total, only that at any given time during the day there would be two staff members working. If two staff members are always on call all day long, it works out to 48 hours that you have to pay out per day. An example would be 6 staff members, each with 8 hour shfts. Even though there is 6 of them, it's still 48 hours per day that you have to pay out for two staff members at any tme during the day. My post may have been a bit confusing I'd assume if they wanted to have 2 staff members on at any given time they would need to have roughly 9 staff members (one person would be a little short on a 40 hour week, or they would simply have a little overlap in shifts which is more likely).
Posted by Torith, 07-02-2005, 01:56 AM
Oh ok I understand (sorry tad bit late right now ).
Posted by dollar, 07-02-2005, 02:03 AM
No harm no foul, I'm known for making some pretty...confusing...posts at this hour anyways
Posted by Twinky, 07-02-2005, 06:23 AM
huh there is 24 hours in a DAY, how can u get 48 hours in a day.
Posted by dollar, 07-02-2005, 06:26 AM
Read it again. If you are providing 24 hour per day support, and at any time during the day there is two staff members working, how many hours are you going to have to pay for at the end of that day? Two people on the clock at any given time * 24 hours during each day = You are going to have to pay for 48 hours of work per day. It's really simple to understand, I'm not sure why so many people are having troubles with it.
Posted by Suffolk Designs, 07-02-2005, 06:51 AM
Maybe they only work / pay for half an hour every hour
Posted by dollar, 07-02-2005, 06:59 AM
You're saying maybe the company only pays half the hourly rate for each hour a person works? Now that is something that doesn't make sense. Here think of this way: You run a computer store, you're open from 9-5 every day and all breaks are paid. You have 3 employees working each day, every day (does not have to be the same 3 employees, just on any given day if a person walks into your shop they will see 3 workers there). Every one of your employees make $10 an hour. Each employee works 8 hours a day. 8 hours @ $10 an hour = $80 a day per employee. $80 per employee with 3 on any day means $240 a day. now to go to the simple math I do to skip all of that: 3 people at any given time, 8 hours per person = 24 "pay hours" in a day 24 * $10 = $240 See how they end up at the same number? Now pretend that you are a 24 hour shop, and at any given time you still want to have 3 people working. For grins we'll say that each day 9 different people end up working. First shift: 9PM-5PM Second shift: 5PM-1AM Third Sift: 1AM-8AM 3 Employees on each shift. First shift: 3 Employees @ 8 Hours @ $10 an hour = $240 Second shift: 3 Employees @ 8 hours @ $10 an hour = $240 Third shift: 3 Employees @ 8 Hours @ $10 an hour = $240 Total out of pocket for the day: $720 Or you could make it simple like I do and say there is 72 work hours in each day your store is open. $10/hour @ 72 hours = $720 This is most definatley way too long of a post for me to type out about something like this, but hopefully it will stop the questions
Posted by Suffolk Designs, 07-02-2005, 07:30 AM
My last comment was sarcasm about the 48 hour day comment previously posted......
Posted by pmabraham, 07-02-2005, 09:51 AM
Greetings: Our business model incorporates more than reseller hosting , so while the number of customers from each component matter, a single component doesn't pay all the bills. We have a managed dedicated server component where the average customer pays over $5,000 per month for managed hosting. Our shared hosting component goes from $25 per month on up. Our VPS hosting component starts at $150 per month. We have a managed services and security component where customers pay anywhere from $0 per month (if they didn't use us that month; though the average is $25 to $50 for our smaller customers) to several thousand per month. That stated, if you create the proper infrastructure whereby it is extremely rare to have hardware, operating system, and application problems you dont need live 24x7x365 on-site staff other than the N.O.C.; and if thats staffed by the data center, then you are covered in that area. For the server and security team, if you have it set up that they are able to respond to issues within 15 minutes or less when off site, then you dont need multiple shifts; you just have to come up with a fair on-call payment policy. As Justdollarhosting stated, we dont try to redefine what full management means. There is a Scranton, PA data center that was offering full management and then had a series of exceptions to the words full management. Later, they reworded how they stated things because of too many questions about using the word full. We dont get into those problems because as long as the issues relate to the services we provide, then we provide the support. This does include support for applications that we did not install. Why? Because it still falls within the services we provide managed hosting. Our VPS and managed dedicated customers get root access even though we provide full, proactive security and management. We dont try to tie the hands of our customers; we are there to make sure everything they try to do works correctly. In any event, it comes down to remembering most pricing models WHT does only represents a small fraction of the overall market place; and that all businesses must be modeled after proper business practices (the Internet is not special in this regard) in order to survive and thrive. Thank you.
Posted by layer0, 07-02-2005, 09:55 AM
dynamicnet, That sounds like a very, very intensive managed hosting service you have there! -GSV
Posted by shotgun7, 07-03-2005, 01:27 AM
looks like he has found (and is doing well in) a nich market.
Posted by MatthewAnderson, 07-03-2005, 02:18 AM
700 a month is just sad for that amount of space and bandwidth
Posted by Torith, 07-03-2005, 02:33 AM
Why is it sad? If a person can give top quality support as well manage to keep up the servers great then it can be worth it. As well if people are paying that much then the company must be doing something right.
Posted by Yash-JH, 07-03-2005, 02:33 AM
They aren't targeting the general consumer market, rather the higher-end business market... What is wrong with that?
Posted by Torith, 07-03-2005, 02:44 AM
As well if your site goes down to 97% or below you get 100% of your money back for that month. So they must have great uptime to offer that. Up time Credit 99% to 99.899% 10% 98.5% to 98.999% 25% 98% to 98.499% 50% 97.001% to 97.999% 75% 97% or below 100%
Posted by 3rdcoast, 07-03-2005, 02:46 AM
my new hero
Posted by JohnCrowley, 07-03-2005, 10:06 AM
Right on target! We've been around as long as dynamicnet, and do not employ 24/7/365 on-site staff either. When you cater to business clients, have measures in place for emergency paging, and run top quality hardware, network, etc... then you really do not get many support requests at 3 AM in the morning that can't wait until 7. As long as the NOC/DC is staffed and proactively monitoring the servers, you are pretty well covered (Over 9+ years, we have had 0 clients cancel because we do not answer non-emergency emails at 3 AM). Per the pricing they offer, it's not that far out of the realm, and although we do not have a $700 shared hosting plan on our site, if a client were to use that much space/bandwidth, we would charge around that rate or higher probably (We have many shared hosting clients paying $300+ a month for less than 50 GB in bandwidth and less than 1 GB in space). Service is worth much, much more than hardware any day. When you employ top people, offer them full benefits and high pay, your pricing *must* be higher to keep up this level of service. Seems the object of this thread gets that point quite well. - John C.
Posted by Mniphtiik, 07-03-2005, 10:47 AM
You have a point about the service having a higher value because quite frankly it does, but come on... $150/month for 1GB... ridiculous IMHO.
Posted by JohnCrowley, 07-03-2005, 11:36 AM
It may be ridiculous to you, but many businesses pay a premium for a high level of service and reliability. I say, $2.99/month for 1 GB / 50GB, now that is ridiculous! The space and bandwidth have little to do with the price when it comes to business hosting. It is all about the relationship, service that is provided, and that the features and software match the client's needs perfectly. I'm sure there are things in this world you gladly pay top dollar for, and don't mind doing so, because you are getting a quality product (i.e. guitar, xbox loaded, full service brokerage account, etc...) and other things you want the most bang for the buck. For a company serious about its web presence, the top dollar analogy is often employed. - John C. (forcing clients to pay top dollar since 1995)
Posted by ichris, 07-03-2005, 12:19 PM
I applaud what Dynamicnet.net is doing. In reality, $700 dollars a month isn't very much. I'm sure many companies would many times that to be insured that they get the best support, great uptime, etc. The whole WHT market is warped. $700 a month for your average WHT may seem like a whole lot to him or her, but in the words of Ray Kinsella in Field of Dreams, "If you build it, they will come."
Posted by catfished, 07-03-2005, 01:08 PM
Considering the support they're providing and the Uptime Credit, I can understand where a serious business would be happy to pay that price. Obviously they rarely have to give much credit or they wouldn't be offering it. If I had a successful internet business that depended heavily on 100% uptime, I would definitely consider dynamicnet.net.
Posted by chessming, 07-03-2005, 03:02 PM
i just want to laugh .... those ****ing stupid .... idiots!! 700 $ for a 7 Gb and 50 Gb bd.............. haaaaaaaaaaa.... just very very ..... stupid...
Posted by NameShark, 07-03-2005, 03:07 PM
Well said by so many. We tend to think that the price is everything when we should be looking at the end product and the customers ultimate satisfaction with the service provided.
Posted by vito, 07-03-2005, 03:14 PM
Another brilliant post by another enlightened member. Erm, I'm so ticked off. I contacted Toronto Maple Leafs and told them I would play for $60,000 a year, but no. They continue to pay Mats Sundin $9,000,000 a year!! What gives?? A player is a player is a player, right?? Uhhhh, not. It's not about price, it's about what you get for your money. Dynamicnet's business model is (rightly) based on this principle. Refreshing to see. Vito
Posted by layer0, 07-03-2005, 03:16 PM
You can be my guest to go for kiddie hosts who offer the same thing for $1. It's such a good deal!! -GSV
Posted by sprintserve, 07-03-2005, 03:43 PM
Well if my business is worth tens,hundreds of thousands or more to me monthly and it's existence is reliant on a never-failing net infrastructure, I would pay the amount without blinking if it guarantees me that.. i.e. It's obviously not for everyone.
Posted by pmabraham, 07-03-2005, 03:58 PM
Greetings: If you go to your local mall, and ask to speak to the mall manager about renting space in the mall, how much would that run you per month? One of our largest managed dedicated customers pays over $120,000 per year. When we talk about how to cut prices; they smile and state this is less than 10% of their revenue (all of which is earned on the Net). They have close to 100% up time with complete management. Their needs are met; and that's what matters. The problem of WHT, people equate everything to outright techology. They are paying how much per GB of bandwidth or GB of disk space??? Business customers don't equate price to bits and bytes. They equate value to peace of mind, trust, convenience, and more. Thank you.
Posted by JohnCrowley, 07-03-2005, 04:08 PM
That is actually quite a lot to pay per year for only 1.2 million in total revenue brought in (not knocking your model, just pointing out a 10% outlay for a managed server). Now, if you also actively manage and maintain their software so much so that they can save on an IT department, then the cost seems more appropriate percenatge wise for them. One of our largest managed server clients brings in around 1.5 million per month in sales, but only pays around $500 per month for the managed server. They use about 800 MB in disk space and around 50 GB in transfers. The $500 per month is a drop in the bucket, and they have asked if we have a higher priced plan that may be more appropriate for their company (We said no, what you have now is more than enough). A little dichotomy to spice things up. - John C.
Posted by dollar, 07-03-2005, 04:25 PM
Vito put it very well. The type of hosting you purchase depends a lot on your business. Would I purchase a shared acocunt for the few pictures I have of my lizards from this company? Very doubtful that I would. In the same stride though would I purcahse from an extreme budget host to ensure my e-commerce site is up 24/7? Not a chance. It's amazing the posts that brand new members can bring to this board.
Posted by NameShark, 07-03-2005, 04:39 PM
Everyone has a business model that works for them and their customers. It only depends on what market we are going to target as to what we are charging. Some target the budget minded website owners, others the higher end business customers. So it is not for us to knock what someone else does if they are successful at it. Who would not like to make that kind of money for a customer account. I personally would not pay that for my business, but that is a choice. Than again I would not pay the host company $2 per month for a website that I dont know if it is going to be up tommorrow. I would rather pay for a stable business than a business that is living on the brink of extinction if one thing goes wrong. Again that is personal choice. I was a manager for a fortune 500 company that spent alot of money on its network to keep it up and running. The cost of keeping this system running was cheaper than the loss of customers. So we have to consider this fact when looking at what we pay for.
Posted by pmabraham, 07-03-2005, 06:09 PM
Hi John: My own math was off as their revenues exceed $2,000,000 per year; and yes, we manage everything including the applications. As stated, over 99% of our customers are businesses who either don't want to be burned, or have been burned on the Net. They want a company which will not redefine words, who will put their money where their mouth is in terms of SLA's, etc. WHT pricing is pure technology without regards to anything else; unfortunately, that's not how good business is run. Thank you.
Posted by NameShark, 07-03-2005, 10:07 PM
Peter I commend you for standing up for your business model and taking a stand for what your company does. There are many businesses that are willing to pay for what they get. Since outsourcing a project such as managing a site can save a company the expense of an IT department. The cost to them may be high to most in their views, but if you factor in the cost of developement and maintaining the site on a yearly basis they may be saving thousands. So to them this makes sense and your company benefits from this business sense. You have found a market that many would have not have dared to enter. You are taking a few accounts and making them satisfied customers as opposed to taking on the masses and having to hire multitudes of techs to make them happy for probably the same amount of money that you get from a smaller market. Plus your cost structure is lower and more profitable most likely. I know that I did not think of that market when getting into the business and as such I am intrigued by it and commend you for your forethought. I worked as a manager for a fortune 500 company and the outlays on Technology are huge and outsourcing saves money when you put the management of such a project into the hands of specialists.
Posted by cartika-andrew, 07-03-2005, 10:34 PM
Correct - the business model is very strong - however, the primary problem I see with this business model is that the majority of companies that utilize the sort of budgets you are talking about generally only deal with other fortune 500 companies. The old statement of "no one ever got fired for choosing IBM" comes to mind. It would be very difficult to get the decision makers in a fortune 500 company to choose thenetcode or cartikahosting for their outsourcing requirements - at least not until we have a proven track record (and to these companies, 4 years of dealing with SMB is not a proven track record - unlike WHT where 4 years of solid business performance is considered extraordinary) and a significant, identifiable client base composed of extremely satisfied, similarly sized corporations. Eventually, companies like ours can slowly increase our portfolio and start an enterprise division which targets this client base. Obviously dynamicnet has been around for long enough and has an established client base with which to pull this off - and for that, I commend them.....
Posted by NameShark, 07-03-2005, 11:05 PM
You are exactly right about your statement. Fortune 500 companies will not choose the smaller providers unless they know the principals or have come from another proven enterprise. I am sure that Dynamic spent a fair amount of time getting to the point where they are. I know for one that we are not going to tackle that market any time soon as that is not the direction for the moment. You need to have a staff of proven techs that specialize in that type of client and I cannot say that my techs have that needed experience at moment. My comments in the previous post are to say that what Dynamic is doing takes years to build and the trust of the corporate business community. This type of relationship can take quite some time to do. So if a company, any company without the knowledge of this type of client were to jump into that market they would utterly fail. Even if they didnt they would have to take the time to build a relationship with the types of clients they needed to make it profitable and that could take months or even years.
Posted by Arkadiy, 07-04-2005, 01:14 AM
I truely hope these costs are a joke, if not, I wonder if anyone has bought one of these?
Posted by WO-Jacob, 07-04-2005, 01:42 AM
Erm, you could possibly try reading the thread you have posted to? They've been around for 10 years (or 1010 for those of us who like binary and thought '2'). If nobody bought them, it's highly doubtful they would waste their valuable ad space (i.e. their website) displaying them. Just a thought
Posted by dollar, 07-04-2005, 01:47 AM
I would expect something like this from somebody that thinks they can survive on 50Gb of space and 500Gb of transfer for $25 a month. *edit* For $50 a month you can also get an unlimited everything reseller account.
Posted by WO-Jacob, 07-04-2005, 01:55 AM
Not on one of their plans he couldn't! We do some of this stuff, and I'm sure some of you would be outraged at the charges involved, but you just don't get what it's worth to a business to just not have to deal with it. If you made $2,000,000 a year, and someone offered to make your website just work for you, meaning you never had to worry about what worked and what didn't, never had to check through the site to make sure things are going correctly... never even had to wonder if you had missed an email... what would that be worth? Now imagine every penny you made was from your onilne site. What is it worth now? 5% of your income? 10%? They're paying for piece of mind, not for space and bandwidth. Those are just numbers that make no sense, and I'd be willing to bet that their space/bandwidth prices don't even make up a tenth of their itemized bill. When your paying that much, you pay for people, not for hardware. Your still stuck in economies of scale, but your scaling your satisfaction and piece of mind. Unfortunately, this is not the place to sell satisfaction. Everyone here just wants space and bandwidth. It's too bad though... Note: before I get flamed for saying nobody wants piece of mind here... please, get real. Ask yourself the question that I posed above and you will find your answer. We provide the online accounts we do to supliment our offline-online (if that makes any sense) business, not as our sole means of income. Here's a question for you... how many of you have had clients call you in the middle of the day, ask you to join them for a meal at a nice coffee shop, and just talk about life for two hours? Oh, and pick up the bill on the way out? I've said it before and I'll say it again... our customers are awesome. Last edited by WO-Jacob; 07-04-2005 at 01:58 AM.
Posted by JohnCrowley, 07-04-2005, 02:12 AM
It's not really fortune 500 companies that dynamicnet and others like us are courting. Those big fish go with IBM, or host in-house, etc... It's actually the small businesses that are willing to work with other "small" hosting companies for personalized support and servce, and know the cost of doing this type of business. One million per year in total revenue for a small store that sells consumer products is actually not that much. - John C.
Posted by carguy84, 07-04-2005, 02:45 AM
Well, I typed up a nice message to this post, but the more I read it, the more it made me think it wouldn't be woth the effort to try and explain everything. I'll summarize it all tho. There is definitely a market for fully managed, guaranteed hosting, and companies have the freedom to price it at whatever they want. They'll be the first to know if they priced themselves out of the market. I'd much rather manage 5 clients at $1000 a month, then 50 at $100/month. However, companies who are willing to pay $120,000 on $2,000,000 earned(not even $2,000,000 profit :|), well, I think most fizzled in 2002, but apparently some are still around. Sign as many up as you can, that right there is one heck of a profit margin. That's a full time developer, sysadmin and a year of hosting being pissed away(no offense to the providers, you're doing what you're supposed to be doing, and apparently doing it very well). But if that company was smart, they'd re-evaluate the fact they run a dot com, all the whilst, not having a techie on the inside... When I worked for a dot bomb from 00-02, I think they were paying $28,000 a month for managed hosting...but had a team of 3 sys admins on full time as well =/. 18 front end web servers, 2 clustered DBs, a boatload of reporting servers and a 10meg pipe all being fully managed....for a site that saw about 40 PC/electronics/book orders a day lol. Ahhh now THOSE were the good ole days of managed hosting . $2.2mill in hardware, $250,000 a year in hosting, $210,000 in sys admin salary and the site made $280,000 in profit during it's 4 year stint. Who can beat that? Chip-
Posted by carguy84, 07-04-2005, 02:49 AM
That $700/month. is that a dedicated box? You can't offer as good as a guarantee as dynamic does on a shared box, I wouldn't think? Doesn't that open it up to even more problems if a customer takes down the box with their app? I'd think it'd be cheaper in the long run running 1Us for each client. Just curious. Chip-
Posted by WO-Jacob, 07-04-2005, 03:00 AM
I highly doubt anyone is going to sign up for a $700 /month account to try and cause problems on the server.
Posted by WO-Jacob, 07-04-2005, 03:11 AM
I believe you would be hard pressed to find a quality developer who works full time for only your company for less than $120,000 a year. The key here being quality. Granted, this would depend on their skill set. These are customers who are not looking for 'mediocre' nor 'adequate' solutions. For reliable sound development on-demand, they are saving money in development alone, not to mention hosting and system administration fees. They are paying for consistency and results. To ensure this, they are willing to pay what providing this requires. Just because your business plan does not provide for these expenditures does not mean that they are any less unreasonable.
Posted by NameShark, 07-04-2005, 05:05 AM
And it is not being said that only fortune 500 companies are all that would use you. It was an example for what the market is about. I agree with you and side with you if you read my posts. What I have written is that basically any company that has the budget and wants to save the money will outsource their IT department to specialists such as yourselves. So the comment of fortune 500 is not meant to say that is all the business there is for this market, but to simply state that companies will look for the best solution to their needs. If anyone assumes that only fortune 500 companies are the only ones looking at business this way, well they are wrong. Any owner would be seriously inadequate in their job if they didnt want to save money. Now mind you the budget has to be there for an IT department to begin with, but I think you get the point.
Posted by carguy84, 07-04-2005, 06:52 AM
I didn't mean intentionally, I meant a server intensive application, or a script gone wild. You don't have to have mal-intentions to do harm on a shared server. I don't think you'd be hard pressed at all to find a quality developer for under $80,000. $120,000 a year which includes website development on $2mill a year revenue sounds more in line. Before it seemed as though it was just "maintenance" on the application, not development as well. $120,000 for hosting and development could be a bargin for some sites. A huge bargin. Chip-
Posted by pmabraham, 07-04-2005, 11:03 AM
Greetings: If a given reseller has enough accounts to merit their own box, yes they have their own dedicated server. H-Sphere at http://www.psoft.net/ makes this very easy to do. Most resellers, however, are on high quality (we typically spend no less than $3,000 on a 1U to 2U rack mount server) servers which are shared. We utilize two forms of daily backup backup to NAS, and backup server to server so that on the rare occasions a customer needs a restoration, we can get the data for them; each backup method is verified, and has test restores several times per year. Yes, you can have 99.5% and higher up time in a shared hosting environment if you set up the infrastructure correctly. Most managed dedicated customers are on hardware load balancers running two or more servers. June 2005 was our tenth year in business; and November 2005 will be our nine year providing business Internet services. We have generated 100% of our revenues on the Internet since January 1998 (founded in June 2005 for those interested, our DBA records are acknowledged on the Net since October 1995, our first domain name (pmpcs.com) registered in late 1996, and our incorporation noted on the Net in January 1998). Those WHT readers who run their business like a business know one does not base their pricing model on the cost of disk space and bandwidth. They know that every last cost, including the cost of growth, must be accounted for in calculating a price. Thank you.
Posted by NameShark, 07-04-2005, 01:07 PM
Well said Peter and absolutely correct. The problem with some hosts is that they believe that if they can sell something that prices them $3 for $4 and sell a 1000 of them than they can be successful. When the dust clears and the prices are figured they are barely making a profit, since they forget to add in the cost of labor, development, advertising and hiring for just a few examples. Running a successful business requires that you take into account everything you do and cost it out. At first you may think you are on top of the world when you have 100 accounts, but is the time and effort worth the $100 you make per month. NO! Would it not be better to charge $12 for the same service and make $9 per customer and have only 30 accounts for which you $270 per customer each month. Also your benefit is that you work less and you work smarter. Your cost structure is lower and profit margin is now rising. The decision is ultimately yours to make. The above is an example and does not reflect every cost structure out there. Just food for thought.
Posted by robgct, 07-04-2005, 01:56 PM
im sure if their customer paying $150/month for 1GB of bandwidth uses 10GB of bandwidth by accident, dynamicnet.net wont say anything.. since they obviously have the extra money from charging high costs to cover any additional bandwidth prices.
Posted by pmabraham, 07-04-2005, 02:04 PM
Greetings: The billing side of the automation system automatically bill for overages. The sad part is that you still have people on WHT thinking disk space and bandwidth rather than all of the other prices of operation. Thank you.
Posted by zardiw, 07-04-2005, 02:13 PM
Now there ya go.......it's not about the storage/bandwidth, it's about the peace of mind.........and right about now, a buck fifty a month don't sound all that bad........now if I just had enough accounts to justify that......lol...z PS...their $150/month plan has 1G of STORAGE not bandwidth, which is 10GB........and how many resellers are using even close to that? Last edited by zardiw; 07-04-2005 at 02:20 PM.
Posted by rmethod, 07-04-2005, 02:37 PM
That has got to be a typo!
Posted by dollar, 07-04-2005, 02:41 PM
Did you neglect to read any of the thread?
Posted by NameShark, 07-04-2005, 02:43 PM
It would seem so. That has happened a few times now.
Posted by CAP-Dustin, 07-04-2005, 08:44 PM
Must be the worlds best hosting to be that expensive...
Posted by zardiw, 07-04-2005, 10:26 PM
How much for extra gigs? And 5 domains seems kinda low for a reseller....are you mainly geared toward regular hosting customers, instead of resellers?........z
Posted by Dan L, 07-04-2005, 11:01 PM

Posted by zardiw, 07-04-2005, 11:53 PM
I KNOW...hard to stop thinking about Gigs......lol......maybe I'll start charging $50/month for hosting........that way I'll only need 3 customers to break even....at least on the hosting part...lol.............z
Posted by shotgun7, 07-05-2005, 02:50 AM
i dont see why so many are giving them such a hardtime the saying you get what you pay for is true and thats what their business is based upon.
Posted by Cap'n Steve, 07-05-2005, 03:16 AM
Why does everyone hate overselling but love underselling? I've said it before and I'll say it again. For that price, I'd expect them to build my site, make me dinner and tuck me in at night. I understand that there's more to consider than storage and bandwidth, but including such small amounts on such an expensive plan is almost insulting. It makes it seem like you're trying to "nickel and dime" your customers, since disk space and bandwidth are relatively cheap but you're giving them as little as you can get away with.
Posted by WO-Jacob, 07-05-2005, 03:23 AM
They're not paying much for the space/bandwidth. They're paying for the people and the infastructure. It's not underselling. You spend 5k to setup a load balanced fault-tollerant system (not counting the colocation fees... eeks) and sell 30 7GB plans at 700/month, include full management (all third party scripts and such)... your running a decent cost yourself. If you don't need that service, then don't buy it. Why is this so hard to comprehend?
Posted by Dan L, 07-05-2005, 03:26 AM
Edit: WebOnce beat me to it
Posted by NameShark, 07-05-2005, 03:30 AM
The problem with some of them is that they have no idea what the cost structures of a larger business is like and why this can save them money. It is not a knock on you guys, but I spent many years as a high level manager and know why this can save you money as opposed to trying to do on your own. They are selling the total service not just space on a server. For the price the customer is getting dedicated techs and management people to run it for them. That is what they are paying for in a nutshell.
Posted by WO-Jacob, 07-05-2005, 03:38 AM
Well, I'm usually pretty quick (when my cable modem is functioning ... )
Posted by WO-Jacob, 07-05-2005, 03:48 AM
I had a long reply to this but it seemed like I started rambling/ranting (as I tend to do...) so I decided against it. I just wanted to voice that I agree with what you have said.
Posted by pmabraham, 07-05-2005, 06:26 AM
Greetings: "It makes it seem like you're trying to "nickel and dime" your customers, since disk space and bandwidth are relatively cheap but you're giving them as little as you can get away with." There one goes again equating cost to pure disk space and bandwidth. If one were to create a serious business plan they would want angel to VC investors to take seriously or even their own bank, then the plan would account for every single penny of expenses including people youve not yet hired, but need to run the business successfully. This means putting down support people you need, but have not yet hired; putting down server administrators you need, but have not yet hired. Etc. You cannot build your business plan on too many what ifs, nor can you count on volume if youve not built your price structure correctly. For what you have then is losing more money on more volume. We put a lot of guarantees to our customers in our business model no overselling guarantee, a strict up time guarantee with payout customer oriented rather than provider oriented, and even our resellers and shared hosting clients have a hardware guarantee you only typically see serious dedicated server providers offer. Look around WHT, which only represents the smallest fraction of the entire market, and you will see the average life span of most clients being months months! Our largest reseller started with us in 1998; and they are still with us. We suffer 2% or less churn (turn over) per year (year, not month); and 99% of the time, the turn over is due to the customer either going out of business (not due to our prices), or their own business plan for the Web not working as intended. Most of our customers have been burned by cheap providers who either went out of business because they did not take the time to calculate all the prices of doing business, OR who could not deliver quality goods because the provider did everything on the cheap. While price matters to them, they care more about quality and longevity than price itself. They know that the cost of an item is only a small piece of the total puzzle. They realize total cost of ownership matters more than per unit price. And they are looking for a total return on their investment rather than looking at the pure cost of the investment. A local customer was paying a national provider $19.95 per month for hosting; yet the total cost of ownership was $3,019.95 per month because with that provider they were having daily email problems that cost them $100 per day (based on their own internal analysis). They came on board one of our shared plans at $100 per month; and in their minds, they are saving $2,919.95 per month because their problems went away. In ending, disk space and bandwidth are only a small part of the bigger picture; and WHTs pricing mentality only represents a very small fraction of the overall market. Thank you.
Posted by shotgun7, 07-05-2005, 07:24 AM
very well said dynamicnet, very well said!
Posted by NameShark, 07-05-2005, 07:39 AM
It would seem that some people do not understand this, and this can be attributed to lack of proper business training. Your figures would be about right Dynamic. When the cost of each employees time to construct those emails to the host is figured (Rate x actual time) the cost of low priced plan can can outweigh the cost of a higher priced plan. Not all hosts that offer lower costs are bad providors, but you have to admit that the ones that are bad providors, do so only because they do not factor in the actual cost of their business model. It is tempting to want to offer lower priced plans than the next company. I have even fought with this demon, but when my better sense got ahold of me again and thank god for that, I remembered all thoses years of management and doing Profit and Loss statements. So it is not a matter of the small cost of the disk/bandwidth space, but the cost of the labor involved in a business that you have to figure. This is because labor is you number one expense and if you are losing productivity to constant emails and phone calls to your providor, than you are losing way more than the cost of your web plan.
Posted by shotgun7, 07-05-2005, 08:00 AM
I Agree TheNetCode. Seems that is exactly what has caused the "age of the budget host" everyone trying to beat the next guys price, well it is easy to say i will give you this for this small amount of money but being able to provide it is 2 different things. when all the .99 cent a year and $5 unlimited everything host go away because they see offering such a service isnt really realistic atleast to be able to do so and provide quality service...i bet you dynamicnet will still be around
Posted by unity100, 07-05-2005, 08:07 AM
in any case, if it is not top quality dedicated box that is totally managed, 700 $ is steep. once set and configured properly, even dedicated boxes do not need intervening for even weeks, allowing one adminstrator to cope up with more than 3-4 boxes, which does not justify exorbitant costs.
Posted by shotgun7, 07-05-2005, 08:17 AM
not so much so unity100, Here is a prime example i have alot of exp/ in the trucking indurstry. A Prime example, expidited freight, it has to be there ontime....alot of JIT (just in time) freight has to be there ontime otherwise it will shut down an entire plant and if it is not there on time the TRUCKING COMPANY is the one who gets a big fine because they were late on a load, it shut down the plant even though the freight wasnt there they still had a plant, and workers (some of which on overtime) there waiting on the freight...Just like hosting if a company is serious about business and generates most of their income from their website it has to be up all the time, or that company is missing out on sales, and losing revenue. So it makes more than ample sense even more so for larger businesses to invest the money to insure uptime and quality service.
Posted by pmabraham, 07-05-2005, 08:56 AM
Greetings: "once set and configured properly, even dedicated boxes do not need intervening for even weeks" Are business customers buying boxes, bits, bytes, disk space, and bandwidth? Or are they buying solutions to their problems? If the latter, they look at total cost of ownership (which is more than the initial price they pay -- once or recurring), and return on investment. Thank you.
Posted by unity100, 07-05-2005, 09:03 AM
solution" is much of a broad term. it includes engineering applications for small company networks, rocket engineering, bridge building and so on. the topic is, i assume, bent on reseller accounts for 700 $/month. this, from what i gather, is supposed to be a resellership in which an enterprise sells booked space & bw to customers ? if so, that is steep indeed. of course to put an exact opinion we have to know exactly what services are offered within this 700 $, in detail.
Posted by unity100, 07-05-2005, 09:11 AM
after checking the packages and costs at the site, i am now expressing my opinion siding with the people that think it is too expensive.
Posted by shotgun7, 07-05-2005, 09:19 AM
unity100, your just looking at Disk Space and Bandwidth, the costs for their reseller accounts, and shared accounts are based more on the service, and equp. as has been said before
Posted by IHSL, 07-05-2005, 09:24 AM
Why not just leave dynamicnet to their business model, instead of questioning it? Yes, they are on the higher end of the typical pricing scale, but if they serve their customers the way they advertise, then I don't see a problem. What I see in this thread though is a lot of 'holier than thou' attitudes. The lectures coming from users on both sides are just silly. It always tickles me when there's a thread that lasts more than 5-10 posts, in which a company's business model is questioned. It's like telling someone: "Your opinion is incorrect". Simon
Posted by unity100, 07-05-2005, 09:51 AM
no need to get anxious. we are just exchanging ideas here. shotgun i have piecemeal looked at the features of the mentioned plans, i was able to pinpoint 3-4 items that other hosts do not offer with their various plans. and it is seems not fully managed, 700 $ a month for a reseller plan is steep in industry's standards for such features. everyone's business model to their own. if they wish they can sell same plans for $ 55.000 a month. however it is my opinion is that it is indeed high compared to the general price trend.
Posted by Suffolk Designs, 07-05-2005, 09:51 AM
From this thread we can see the people that would never buy a Mercedes or a BMW when a Lada will get you from A to B Some people just demand top of the range quality and expect the quality to be guaranteed as their business needs it to run. These people are willing to pay for it. I bet google.com, microsoft.com, yahoo.com etc etc etc are not all on cheap servers. They will be paying a premium for their equipment as they need premium service.
Posted by 3rdcoast, 07-05-2005, 10:50 AM
i'm adding dynamicnet to my list of real "solution" providers
Posted by Dan L, 07-05-2005, 11:07 AM
unity, what industry standard? If you're basing it on WHT, reread the thread Deefer: Actually, Google does use cheap servers. They just have hundreds upon hundreds of them.
Posted by pmabraham, 07-05-2005, 11:28 AM
Greetings: "my opinion is that it is indeed high compared to the general price trend." What general price trend? WHT's (which accounts for what small percentage of the market place)? Is the general price trend for quality human beings up, down or neutral? Or are only boxes, bits, bytes, hard disks, and connectivity accounted for in your business model of operational prices? When the local customer who had daily email problems with the $19.95 per month shared hosting provider came to us, they didnt ask how much for x GB of disk space? and how much for y GB of bandwidth? They asked us in various ways about our ability to solve their daily email problems. When they were confident we had a solution in place along with a way for them to back out completely, and safely should we fail (which did not happen), then we got into discussing pricing. They didnt blink twice at the price of $100 per month shared hosting (five times what they were paying per month) because what mattered most to them was working email; the cost of not working email far outweighed the price we quoted. Our largest reseller, with us since 1998, knows that they can call or email for support as often as they want from simple matters that they can handle to stuff we should handle. And in some months that adds up to 40 to 80 hours for just that one reseller. We dont try to redefine what fully managed means. This reseller knows they can go anywhere else and pay 1/5th (if not 1/10th) of what we charge; but they also know from experience they will not get the same quality of care they get now. The grass is not always greener on the other side of the fence. In ending, please remember that a solid business plan and operation will include all prices in running a business including the cost of growth. And that business customers are not I repeat are not buying bits, bytes, hard drive space, and bandwidth. Thank you.
Posted by cartika-andrew, 07-05-2005, 11:45 AM
Hi Peter, Im actually shocked you need to keep justifying yourself here - I think what you are seeing is a little envy from the people scrapping for the $10 reseller packages. Our philosophy has always been to not be the cheapest - and maintain excellent service levels by utilizing technology to achieve redundancy and superior performance (ie H-Sphere Clustering - which I know is something you utilize and obviously have capitalized on) I think people forget that compared to many established providers - dynamicnet isnt actually expensive - take a look at companies like IBM and Dell - and frankly speaking - to be able to offer clustered services, for the price they do - is simply not attainable through the IBM's and Dell's - lets not even talk about fully managed... Eventually, with a little more time in this market - we would also like to offer similarly priced packages - in fact, we often use dynamicnet as an indicator of where you ultimately need to be in this business ....
Posted by unity100, 07-05-2005, 01:43 PM
for god's sakes of course 'standards' cant be based on wht alone. gentlemen this is a matter of demand and supply isnt it ? it is .. now lets take the situation even without any statistcs and observe what we are experiencing day by day : in 1999 what was the cost of even getting your feet wet on the web ? exorbitant costs for features now we would all be seeing as 'naught'. what has happened since then ? more automation, more syndicated knowledge (throughout the open source channels) more software more of everything, and voila, there are web hosts popping out everywhere, by the minute. we see that a goodly number of them are scam, a huge goodly number of them are script kiddies, a healthy percentage of them do not maybe know what they are doing. but it is inevitable that, from such hordes of 'providers' streaming into the market, at least a small percentage of these newcomers will happen to be people at least intending to do serious business. and as a result, the 'suppliers' will increase day by day. what happens when suppliers such increase ? if the demand is not parallel, and even if it is it happens not to be so because it is neccessary to reach the demandees first before selling anything (marketing & advertising) the costs fall. and they have been falling. this is an inevitable issue. and in a market where costs tend to fall as such - and dont forget that in web hosting industry we have some weird opportunity like 'overselling' if one intends to do so - it means that costs are falling. i guess not many people here will say that they have seen resellerships offered in a goodly number of providers even close to 700 $ a month, quite the opposite. now when i examine the features in the aforementioned package, i am again stressing that if this is no fully managed reseller account, the costs are way higher than the web hosting 'sea', based on wht, based on elsewhere based on anywhere. this is not a matter of 'getting bmw or any stock car to get from one place to another'. this is a matter of getting a bmw in place of a toyota lexus, for a quadruple increase in price. 'business model being bits and bytes' i dont give a crecedence of course to such a statement, because in it industry, half of every business model is bits and bytes, and they should be indeed, because this is a field of 'life' that is based on bits and bytes. and when i said these are rather expensive costs, i did not of course take into account only the bandwidth and space that package offered, but whole features listed for comparison on that page. except around 4, all of those features come with standard installations of various software as default, as in many datacenters. again i stressed that if this is not a 'fully managed' account, price is too steep. if this IS a managed account to such an extent that it indeed rationalizes $ 700 a month, than it should be stated as such, and a comprehensive text detailing managed services should be provided in package comparison to avoid confusion, at least for better marketing of your service. there is a limit to 'quality' in service and price balance.
Posted by layer0, 07-05-2005, 02:24 PM
There is no need for Peter to continue in justifying is his business model over and over again. You simply have to realize that in a business there are those who have a proper business model that takes into account their growth expenses and much more beyond that. These businesses compete on service and not price. Additionally, many of these businesses offer value-added services such as full management. Then, you will find other businesses (this is the majority) that compete on price and gain customers on solely that. These businesses will struggle to pay their employees and suffer from what is known as "growing pains". I would personally prefer to be the company that competes on service and not price. My customers will know that I charge them extra for a reseller plan. However, they will also know that they have quality assurance along with full management. DynamicNet has been in this business for 10 years and is still going strong. I applaud them for the hard work and going through what I call the "correct" business model. Thanks, --GSV P.S. I have no relation to DynamicNet.
Posted by pmabraham, 07-05-2005, 02:25 PM
Greetings CartikaHosting: It is not so much as justifying our pricing model in so much as trying to get people to think outside the byte . Greetings Unity100: FYI to some people, like myself, your first sentence can be construed as taking the Lords name in vain. Please think of other ways to word things in the future. Weve been in business since 1995; so we are familiar with the early years of the Internet into the now. Please tell me, did the value of human beings go up, down, or stay neutral during that time period? You are correct that there is always a supply and demand side. Right now on the Net, one can probably prove (to a degree) there is an over supply. Which if everything was run on at least somewhat even playing fields would prove your point to the T. However, the overwhelming majority of suppliers, whether they visit WHT or not, end up using a lot of the WHT price modeling when it comes to their business model. They look at the cost of a server, any software licensing, the bandwidth, and then they try to determine how many sites they can host on it factoring in sometimes a large degree of overselling (basing any math they use on what others use without gauging whether such calculations are successful or not). If they pay $200 per server month plus software and bandwidth and figure they can squeeze 200 clients on the server, then they figure anything over $1 per month per client is profit. Some of them may charge $15 per month, but cringe thinking that if their clients only knew their cost was $1 per month, they would be screaming rip offs and gouging. The sad part is that when that type of business model hits a success streak, they soon find out they have to hire good people to help it grow; but wait, they didnt figure out even paying themselves a standard, fair, wage, so how will they pay some one else. In any event, the saga goes on. Right now, the bottom end of the market is a mess where you have people in WHT screaming how hard can it be to find a quality host? and having polls about how long have you been with your current provider where the typical answer is months. Thank you.
Posted by The Napster, 07-05-2005, 02:30 PM
You pay for what you get" All i have to say on the issue. Regards
Posted by layer0, 07-05-2005, 02:31 PM
Oh? I thought it was: "You get what you pay for" In either case, that sums it all up quite well. The only thing currently going on in this thread is people judging DynamicNet solely on price and not service. I think this thread needs to be locked up. -GSV
Posted by The Napster, 07-05-2005, 02:39 PM
Sorry I meant to say "You get what you pay for" Regards
Posted by unity100, 07-05-2005, 04:20 PM
you have implied that the a goodly part of the 'quality' is defined by employee/staff quality. this employee/staff concept has become as blurry as many other concepts because of the net. we all know that today it is possible to hire staff overseas for net based 'telecommuting'. and we also know that many established companies do that, when they find what they are looking for. now combine low standard of life in many developing/3rd world countries with the above concept. what we have in our hands is very, very cheap work force. i have read threads in wht in which people were advising others that it is not worth setting out to establish a web hosting company if it was to make $ 10.000 in profits a year. gentlemen, for $ 10.000 a year, you can make 2 full-fledged web developers work full time for you in many developing countries. we are talking about college educated, professional staff. $ 500 a month can feed a family above standards of such countries, and allow for the family's kid to go to college. telecommuting is even cheaper. this has been a matter that came to my attention researching on the issue of some it services being outsourced to some countries like india. i observed that this had took down some companies' prices way down, while still maintaining a good acceptable level of quality service. thus, branding any web host who sells radically cheap packages as 'low quality' is as fallacious as branding any web host that sells packages 'seemingly' overpriced.
Posted by 3rdcoast, 07-05-2005, 04:23 PM
so....you wanna argue just to argue?
Posted by pmabraham, 07-05-2005, 04:28 PM
Greetings Unity100: In our case, all of our staff are U.S. citizens based in the U.S. And quality of human beings is only blurry if you do not wear glasses . In any event, unless something new comes out (maybe looking at the PS area), I've said what can be said -- businesses do not buy bits, bytes, hard disk space, or bandwidth. Businesses are willing to spend reasonable money if you can provide consistent, reliable solutions to their real world problems. Thank you. P.S. Has anyone every compared operating a business on the Net expenditures to what businesses pay per month for telecommunications? Electricity? Office cleaning? Business meals? Print, radio, and TV advertising?
Posted by unity100, 07-05-2005, 04:38 PM
points has been stated by parties on both side of the price spectrum, reasons given. i dont see any more need to continue on this thread.
Posted by bohemian, 07-05-2005, 07:17 PM
I just wanted to say thank you for everybody contributing to this thread. Opinions may very, but if nobody posted about dynamicnet.net, Peter might never have posted about his secret of running business. Some of posting in this thread are very educational. Thanks again, Ut
Posted by NameShark, 07-05-2005, 07:23 PM
Actually Peter I have done this as I have been on both sides of the spectrum now. I have my degree in accounting and trust me I see a shake out coming in the hosting industry as some of the lower priced hosts are going to be gone. Those without a solid business model will not be here in the next year to two. While this is a sad fact it is also part of business as to many go into a business without the forethought to the overall expense of doing business. You are absolutely correct when you say that when they make $1 above what they pay for their product they think they are doing great when in fact they are going bankrupt. This fact will never come to realization to some hosts since they do not have an understanding of Profit and Loss properly. As to wether your plans are expensive. Well if they were geared at the average website owner then yes they would be outrageous, but since they are geared to your average, well run business, then no. Why is this not a bad price well we have been stating that all along. It seems people are failing to understand the business hosts that offer services beyond the space and bandwidth. Dont let yourselves be blinded by only space and bandwidth when you are comparing a full managed business plan to an unmanaged one. So should Peter have to defend the business model that is succesful for their market? Absolutely not. Again Peter I applaud your resolve in this whole thread as many would have lost their cool a long time ago. And as such I believe this thread should be closed now also. I would say good luck to Dynamic, but they have been around for 10 years and I can say that they are probably going to be around a lot longer for their business customers.
Posted by Cap'n Steve, 07-06-2005, 12:34 AM
I think people misunderstood my "nickel and dime" comment, so here's an analogy: You hire an expert chef to make you a sandwhich. He travels the world to get the best meat and cheese, bakes the bread himself, and you know you're getting a quality sandwhich and are prepared to pay for it. But then you ask for extra mustard and he won't give it to you. Do you see what I mean? The mustard is such a small part of the cost that it's almost insulting that you only get a small amount. Personally, no matter how good the service was, it would still bother me to know that I'd have completely paid for the server I was on after 4 months but would still have to share it with other customers.
Posted by cartika-andrew, 07-06-2005, 12:43 AM
Let me ask you this - how about if your account was spread across 12 servers (as an example) - 1 each for Control panel, DNS1, DNS2, DNS3, DNS4, MySQL DB, MS SQL DB, Load balanced email servers, Linux Web Server and Windows Web Server - how long would you need to make those payments to pay for that environment? Would you even be able to afford it if you had to pay for it all yourself ? Now, how about if you had the chance to receive the benefits of such a cluster for the same amount it would cost you to lease a single high end dedicated server and colo it in a tier 1 facility (lets not even take full management into consideration here) - but, you had to share it with a few clients (call it a virtual dedicated cluster)? Does this seem any more appealing??
Posted by Cap'n Steve, 07-06-2005, 01:47 AM
I know there are plenty of other things to take into consideration. The fact remains that it would still bother me that I had to share the web server.
Posted by shotgun7, 07-06-2005, 02:07 AM
Then don't buy the service.
Posted by Cap'n Steve, 07-06-2005, 02:57 AM
Thanks for your input. I wasn't planning on it, I was just participating in a discussion, which is what this website is here for.
Posted by cartika-andrew, 07-06-2005, 03:07 AM
The scenario I outlined, even if shared (assuming not oversold), is much more reliable, redundant and will exhibit greater overall performance then any single dedicated server - This may bother you personally if these resources are shared - however, the majority of business owners, that actually rely on their environment, and havent received adequate service levels from a dedicated server, would realize the benefits....
Posted by pmabraham, 07-06-2005, 06:21 AM
Greetings Cap'n Steve: "You hire an expert chef to make you a sandwich. He travels the world to get the best meat and cheese, bakes the bread himself, and you know you're getting a quality sandwich and are prepared to pay for it. But then you ask for extra mustard and he won't give it to you. Do you see what I mean? The mustard is such a small part of the cost that it's almost insulting that you only get a small amount." In your example: 1. The chef probably gets a decent hourly rate. If you want him or her to give you mustard, you are paying for his or her time. 2. The mustard is probably not the super market type ; and probably prices more than you think. Our current servers run over $4,500 each, using hardware RAID-1 SCSI drives. So the cost of disk space is not cheap if youve priced out 73 to 150 (147?) GB SCSI drives. We are at a quality data center that has a 99.999% up time guarantee with a customer payout matching Rackspace.coms credits starting at the 25 second of down time. Their bandwidth is not cheap. In all seriousness, our clients know we don't nickel and dime them. Our one reseller has already called or emailed support over 80 hours in a given month, and some months 40+ hours. These calls or emails were not over problems, but how do I, coordination of events, or having us work with 3rd parties such as programmers and the like. No charge. We are going to be personally helping every reseller set up every client of theirs with the proper SPF records properly validated for correct syntax and tested several ways. No charge. The list goes on because we do not try to redefine the meaning of fully managed hosting. Thank you.
Posted by redone, 07-06-2005, 10:06 AM
If people will pay those costs then I say good luck to them! It's not for members here to outline the business pricing structure for them that's down to them. Bottom line is if clients are happy and don't mind paying that price I don't really see the problem.
Posted by NameShark, 07-06-2005, 04:33 PM
The main point is that these accounts they provide are for business customers not personal accounts or new businesses that cannot afford these kinds of services.
Posted by layer0, 07-06-2005, 04:41 PM
Correct. What they provide is way beyond simple space on a server. -GSV
Posted by DevelopAl, 07-06-2005, 08:31 PM
Dynamic, I give you mad probs for having such an outstanding business plan. You should consider writing a book. You could title it "The Trump Towers of Hosting".
Posted by pmabraham, 07-06-2005, 09:15 PM
Greetings: God blesses; and we've been blessed with good solid customers, and our staff is great. Thank you.
Posted by zardiw, 07-06-2005, 11:52 PM
You know, everybody's talking about $700/month.....The actual starter plan is only $150/month........................z
Posted by R0xy, 07-07-2005, 08:55 AM
Wow. The price is quite high. But it's high for a purpose, I suppose.
Posted by NameShark, 07-07-2005, 10:02 AM
You are correct the pricing is high for a reason as their service isnt just a plan for webspace. They are selling management to which for this price is really low.
Posted by layer0, 07-07-2005, 10:16 AM
Amen. http://www.dynamicnet.net
Posted by NameShark, 07-07-2005, 10:42 AM
God speed those in london
Posted by ReasonSinger, 07-07-2005, 11:57 AM
No offense, but that would really be more appropriate in the lounge, yes?
Posted by NameShark, 07-07-2005, 12:40 PM
agreed but still worth responding to his quote.
Posted by layer0, 07-07-2005, 12:45 PM
Well, I was visiting Dynamicnet and I saw that . -GSV
Posted by thomase, 07-07-2005, 05:42 PM
If people pay that why change? Come on, if you could have one client which paid the same amount as all of your clients what would you rather do? Be much less work. I always though £10 / $24 was a lot for a 10GIG reseller account.
Posted by Dan L, 07-07-2005, 06:00 PM
affordahost, in your situation, it would be bad. Imagine if that one client left--you'd be out of business. Anything else I could say has been duly covered
Posted by layer0, 07-07-2005, 06:03 PM
Whoa, that's mad cheap there. -GSV
Posted by shotgun7, 07-07-2005, 11:47 PM
maybe high if its over sold, bad service, and servers loaded to the gill dynamicnet is in a little different market
Posted by PixelManual, 07-08-2005, 02:33 AM
Amazing, I just read all 10 pages. This really is where quality triumphs over quantity. This is one of the few places that charges so much, but they get the Fortune 500 companies and the people willing to spend so much. Good job.
Posted by pmabraham, 07-08-2005, 06:12 AM
Greetings: Our customers are small to medium businesses; we have zero Fortune 500 customers. Thank you.
Posted by Inyxtech, 07-08-2005, 09:23 AM
Wow, that's cheap *cough* - but at least they'll give you free setup
Posted by NameShark, 07-08-2005, 09:49 AM
Ok it has been very obvious for some time that some people fail to read the posts in this thread and so do not know why the costs are charged. It never ceases to amaze me or even the others that are posting in this thread the obvious lack of attention that is payed to a whole subject. If you would have read the thread you would have known by now that this company offers a service and not a storage and bandwidth package. When we looked at packages for my old company we looked at who was going to take care of our needs and be able to save us the most money by doing so. We never looked at the storage capacity as this was never an issue. We needed to guarentee that our site was going to remain up at all times and that we did not have to worry about it. A company such as Dynamic actually saves other companies huge amounts of money in that the companies do not have to have a department to take care of their site. Dynamic allows for many companies to pool resources in a manner of speaking and pay for a team of professional web techs. This team then takes care of several sites instead of one and so saving each company much more than a $100 to $700 per month. The cost of one tech would be 5 to 6 times the cost of this service. And if you talk about a company that is the size of lets say a regional business in your area (you pick one) the savings can be substantial. So when making a judgement why not sit back and think first about what it is they are selling first and why. And how that can save a business money.
Posted by pmabraham, 07-08-2005, 10:40 AM
Greetings: We just received a very inflammatory email from a coward who could not use their own name or their own email address. It is sad that in 2005 there are people who only know how to curse, who are complete cowards that they cannot identify themselves to stand behind what they believe; and yet do not do any home work to see if there are reasons for having alternate view points. In any event, what weve been trying to share with the community is there are sound business principals for accounting for every cost including the cost of growth; and basing your pricing on total cost plus profit. That tied to businesses do not buy based on bits, bytes, hard disk and bandwidth. They buy for relationship value when you can provide real world solutions to their problems. Thank you.
Posted by Til, 07-08-2005, 11:06 AM
Peter, Sad to hear that your good intentions to explain your business principals led to an inflammatory email. I think you have done a great job in this thread at explaining how your business model works and that it works is obvious from the fact that you have been 10 years in business. But no matter how much you explain there will allways be people who just don't understand or are jealous of you. Good luck
Posted by NameShark, 07-08-2005, 11:33 AM
It is a sad day when you get people such as that Peter. I am sorry to hear that they do not know what it means to be an adult. Also why should they attack you personally about all this. It is only a child who would do such a thing and there are many of those out there today that have neither common sense nor the intestinal fortitude to confront someone on a subject such as this with their opinions. Best Regards
Posted by JohnCrowley, 07-08-2005, 01:20 PM
ok, I'll fess up, I sent it in a fit of jealousy. That is sad that they would do that instead of discussing it in a public forum. Just take it as a compliment that you are doing a good job. - John C. (Anonymous, but not a coward)
Posted by pmabraham, 07-08-2005, 03:37 PM
Greetings John, Til, and The Net Code: Thank you all for your kind words of encouragement. I was more bothered by the taking of the Lord's name in vain and the cursing; and more curious as to the question, doesn't the person have anything better to do with their time than anything else. This morning we had a surprise visit from two of the owners of a small company from NY who were in the area, and didn't realize until today they were in a hotel across the street from the office. They shared with our staff that they were with us since 1998; and could not be more pleased with the service and support. I was blessed that I was able to remember their names (they visited us back in 1999) from their last visit. To me that's a testimony that we must be doing something right . Thank you.
Posted by PixelManual, 07-08-2005, 04:35 PM
That might have been a little awkward if you weren't able to remember. A question about your hosting, if you don't mind answering. How do you get your clients, do you simply wait for word of mouth, or do you speak to companies.
Posted by demostorm, 07-08-2005, 05:22 PM
I suspect you earn every dollar you make Peter and I mean really earn it - Not by basing a business plan on the ratio of customers that you hope won't need your support. Which is fine by me and must allow you the kind of time to actually be proactive with support for your customers since it can be structured much more easily WHT has become a pretty sad place when people here don't understand or comprehend what it is to host real business. When you step back a bit you realize this figure is under $200 a week. The cleaning service makes more than that for a few hours every night so why shouldn't a mission critical host? Is it high for WHT? Of course but most of the market here is a price market and is mission critical only if you rediefine what mission critical means. Bottom dolllar hosts are committed to price rather than enhancing customer experience. They don't and won't put the kinds of services, resources or even training into developing anything thats a premium service. That is in fact disaster for that business model since they attract customers who buy only on price. Its short sighted because you prove that there is a market for serious customers that care about resources, quality and service The good news is that there are still a number of serious business people on WHT and whats really great about this thread is that you can go right through the thread and pick them out very easily. Greatly entertaining.
Posted by pmabraham, 07-08-2005, 05:33 PM
Greetings: Our managed service customers typically come from referrals from Positive Software, and referrals from existing customers. Thats our service that runs anywhere from $0 to $25 per month (for most small providers; based on usage) to several thousand. Our managed VPS customers typically come from existing managed shared hosting customers who outgrew managed shared hosting. From time to time we will get customers who have been looking at NTT/Verio who realize for the same price they get full management. Our managed shared hosting customers come from word of mouth from existing customers as well as from local advertising through our local chamber of commerce. Our managed resellers actually grew out of our managed shared hosting where, unknown to us at the time, they were checking out the quality of our managed shared hosting. Then they asked if we had a reseller program in place. To start, our managed reseller hosting program was based on discounted hosting plans; i.e. our $25 per month professional plan was $20 per month to the light reseller, and $17.50 per month for the heavier reseller. When we moved to H-Sphere from http://www.psoft.net/ for complete hosting automation, we did a lot of home work into what would be involved in presenting an offer to our existing resellers to encourage them to buy into the move; and our reseller program, as it is on our Web site today, was born. Those who think $150 for the starter to $700 for the corporate are expensive now would probably fall over to find out what our largest resellers where spending based on the old way of doing business. Our largest resellers now save $400 to $500 per month over the old way because the new way is actually based on whole sale pricing where they are only billed for what they actually use. We also have a dedicated sales person who is assisted on an as needed basis by one to two sales engineers (full time system administrators) who can, between the two to three of them, put the lay person terms of what fully managed hosting (shared, vps, reseller, etc.) means. God blesses; and weve been blessed with solid clients over the years (not to state we did not have our, Doh, why us issues), and good employees (not that we didnt have our bad apples) over the years have truly been an overall pleasant journey. Thank you.
Posted by PixelManual, 07-08-2005, 05:43 PM
Thanks for the wonderful reply. Never thought of advertising a web hosting company in the Local chamber of commerce...interesting. Another question, I do hope I am not intruding on your time. What do you define as fully managed shared hosting. As in what does the customer receive so you can call it fully managed. Last edited by PixelManual; 07-08-2005 at 05:49 PM.
Posted by pmabraham, 07-08-2005, 06:04 PM
Greetings: The local chamber of commerce can be a good source of business from partnerships to clients to vendors to utilize. We call our shared hosting fully managed from several perspectives: 1. Our customers can utilize their end user control panel H-Sphere from http://www.psoft.net/ -- to do tasks like set up cron jobs, set up simple SPF records, set up custom DNS records, set up and lookup Urchin stats, etc. 2. Our customers can contact our support department via toll free number, regular telephone (toll free is only for U.S. and Canada), FAX, or email to have us do for them anything they could do in the control panel but either do not know how to do so, or otherwise dont have the time. 3. Our shared hosting is in a managed environment A. We are in a data center with a true 99.999% up time guarantee and SLA to match. B. The servers are top of the line (our existing servers we use for shared hosting cost $4,500 each; we have several). C. The servers are hardened, and security managed throughout every day (so hardening is a constant thing, not here and there). D. Our servers are monitored by an enterprise level monitoring system we developed, primarily to meet the needs of NTT/Verios enterprise division where their managed hosting customers where paying $50,000+ per month for managed hosting where every second of down time matters. The monitoring system lets us know within 60 seconds of a server or service being down; and provides enough information for our server and security administration team to act quickly. 4. Our customers can ask us to help them do a wide variety of tasks how to set up SPF records that are beyond the simple point and click H-Sphere offers? Can you trace for me why this customer cannot email? And the like. Just the other day we helped a major NY hotel chain (who was not our customer) problem solve whey they could not send emails to one of our customers (it turned out they were on one of the major RBL's for having an open relay); we helped them start their journey to get de-listed. Thats what we refer to as fully managed hosting shared, VPS, reseller, etc. Thank you.
Posted by crash resistant, 07-11-2005, 12:11 PM
Family Guy Peter voice: Shweeeet.
Posted by jt2377, 07-12-2005, 01:02 AM
nah, WHT is still a good place to exchange info. don't let few bad apple spoil your fun on WHT. every fourm have trolls, that's the nature of the internet. slahdot got troll too.
Posted by jdimock, 07-14-2005, 07:40 PM
Drat! The fat man is stealing all my thunder! This defiantly turned into a business modeling discussion a long time ago. I have to say that we all have a lot to learn from DynamicNet if we are going to thrive and not just survive. Kudos to you. My small web hosting company was merely a service that I added to my business management firm so that my clients would have a place to utilize shared hosting from another source aside from the typical IPowerWebs and GoDaddys. The clientele base was large enough and the cost analysis showed it would pay off. Because of this model, I required a hosting company that was large enough and stable, yet small enough to be personal (the same principals I offer my clients). Because of this niche that I have with my clients, I can charge $500 a year for 250mb of disk space and about a 1g of traffic and I have not lost a hosting client yet. I currently host with a rival to DynamicNet in Allentown, PA and the reason for choosing them was due to their exceptional service and grass roots attitude (I was not familiar with DynamicNet at the time). Much like what I see from DynamicNet. Had I purchased a Plesk server from a company such as ThePlanet, I would be paying ThePlanet about 20% of what Im paying now. However, the cost of a Linux/Plesk guru technician would cost so much that I would no longer be profitable. So in retrospect, thanks to companies like DynamicNet I have a future in providing my clients this service. Thank You DynamicNet! On another note the cost of goods or services usually directly related to price. If we use the sandwich analogy, and we bought that sandwich for $5 with a soda and chips and it was made to order in less than 5 minutes, would you believe that the sandwich was good? Or would you think it was left over meats and vegetables from the chefs last trip around the world and it has been rotting in his suitcase all the way from Italy? However, if that was a $10,000 sandwich, then it has to be good, psychology almost makes us believe its true. In my years of experience, I have found that my customers that pay the highest price are most definitely my happiest customers. Would you buy an Enzo Ferrari for $250 a month? Would you question if it was really a Ferrari?