# Biggest, Cheapest VPS dumping to date?



## drmike (Sep 6, 2013)

I continue to be amazed at the apparent weakness in the market.   The best sign of weakness is folks jumping into the price wars or outdoing everyone else with unbelievably low give away prices.

Swiftway, a well known dedicated server and colo company has lowered the bar beyond where anyone else has gone:

http://www.webhostingtalk.com/showthread.php?t=1299155



> This is a preorder run for delivery on or before the 1st of October 2013.
> We had 500 accounts to sell at this price, now have less then 100 available - BE FAST
> 
> VPS based on KVM
> ...


What do folks think about this???!?!?!


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## peterw (Sep 6, 2013)

buffalooed said:


> What do folks think about this???!?!?!


128GB node - cpu and network slow as hell.

Second look: HDD: 500GB - how is that possible?


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## Enterprisevpssolutions (Sep 6, 2013)

peterw said:


> 128GB node - cpu and network slow as hell.
> 
> Second look: HDD: 500GB - how is that possible?


Drive space is not the issue we offer 500G storage as well for the cloud systems. The price is great, the issue i see is the low abuse fee and policy. I can see plenty of spammers and other abusers using the systems until the ips get blacklisted. A strong abuse policy is a must.


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## acd (Sep 6, 2013)

Huh, well I emailed about it, but I'm sure they're all full up on preorders. 5$/mo for 500 GB is a really good price, considering it's what, 20$ for 500GB of raw disk space (3TB disk ~120 USD), not even factoring in raid levels. I guess thin provisioned?


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## drmike (Sep 6, 2013)

I trust they have network management side down to clamp the abuse of spammers for instance.

Seems like storage is node/server.  No SAN or other connector.

This is what they say their nodes are going to be like.

NODE1 - up to 200 accounts. Specifications:

Supermicro H8QGi-F mainboard 4 x AMD Opteron 6376 2.3Ghz 16 Core 16 x 16GB DDR3 ECC Registered 1600Mhz LSI 9271-4i 4 Port RAID Controller LSI CacheVault for 9271-4i 24X WD 3TB or 4TB w/ 64M Cache 2 x Intel 520 Series 240GB SSD Supermicro chassis SC848E16-R1K62LPB 10 gigabit Intel card


NODE2 - up to 123 accounts. Specifications:

Supermicro X9DRi-F mainboard 2 x Xeon E5-2620 2.0Ghz Hexa Core w/ HT 8 x 16GB DDR3 ECC Registered 1600Mhz LSI 9271-4i 4 Port RAID Controller LSI CacheVault for 9271-4i 36 x WD 2TB w/ 64M Cache 2 x Intel 520 Series 240GB SSD Supermicro chassis SC847E16-R1K28LPB 10 gigabit Intel card

Node 1 = 96TB of disk, preformatting and ignoring RAID overhead losses (that's with 4TB drives) vs. 100TB of disk sold

Node 2 = 72TB of disk, preformatting and ignoring RAID overhead losses (that's with 2TB drives) vs.  66TB of disk sold

Node 1 = 256GB of physical RAM vs. 200GB of RAM to be sold

Node 2 = 128GB of physical RAM vs. 123GB of RAM to be sold

Looking at cash:

Node 1 = 200 accounts x 5 = $1k/mo

Node 2 = 123 accounts x 5 = $615/mo

Those numbers look appealing, but the hardware costs plus the masses of bandwidth are the catching points.

As bad as the offer looks at top face value, it's not too bad on ratio of resources to allocation.


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## Enterprisevpssolutions (Sep 6, 2013)

*- Our network - *

Swiftway is currently pushing nearly 1 Tbps (1000 Gbps) of traffic at peak usage. We have 50+ Direct private peers, over 100 Public peers and buy IP transit from:
 

Great breakdown still a good price but I wonder what his uplinks are, seems that will be the bottleneck if you have 200 accounts on 1 system at 100M per client.


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## drmike (Sep 6, 2013)

Swiftway is in multiple datacenters.

Peers IPv4:

AS38930 FiberRing B.V.
AS174 Cogent Communications
AS6939 Hurricane Electric, Inc.
AS4436 nLayer Communications, Inc.
AS3549 Level 3 Communications, Inc. (GBLX)
AS2914 NTT America, Inc.

http://bgp.he.net/AS35017


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## kaniini (Sep 6, 2013)

In my opinion, the market isn't weak.  The appearance of weakness is created artificially from the 'low end' segment.  They are hoping to launch 'loss leader' products in order to reel in serious customers out of the non-serious ones.

Our sales are solid at the prices we are offering.


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## Damian (Sep 6, 2013)

FWIW, Dell R810/910's are getting dumped on ebay for $cheap lately. I'm seeing 4x 8 core with 256gb of RAM in the $4-5k range. Doesn't come with a massive pile of drives, though.

Speaking of that, that SC847E16-R1K28LPB supermicro chassis looks like a serious operator. You KNOW they mean business when it takes drives _from the back _too.


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## Aldryic C'boas (Sep 6, 2013)

Damian said:


> You KNOW they mean business when it takes drives _from the back _too.


I'd love to misquote this, but it's just not the same without *@earlykyler* to join in >_>


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## bzImage (Sep 6, 2013)

Aldryic C said:


> I'd love to misquote this, but it's just not the same without *@earlykyler* to join in >_>


WD black, in the back??


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## drmike (Sep 6, 2013)

Now this has gone all adult non-PG


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## ultimatehostings (Sep 6, 2013)

I wasn't amazed at the offer at after all, at the end of the day it's a pre-order the deployment starts 1st Oct, they've already got more than 500 orders until now, so they're just collecting money upfront.


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## DaringHost (Sep 6, 2013)

The race to the bottom is heating up even more. Who can offer the most at the cheapest price. It's happening with VPS's and dedicated servers. I really wonder what offers will look like in the upcoming years.


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## shovenose (Sep 6, 2013)

DaringHost said:


> The race to the bottom is heating up even more. Who can offer the most at the cheapest price. It's happening with VPS's and dedicated servers. I really wonder what offers will look like in the upcoming years.


Personally, I think the providers that don't try to go for the race to the bottom will survive and grow. People will begin to understand the lousy VPS experience that comes with oversold crap.


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## DaringHost (Sep 6, 2013)

shovenose said:


> Personally, I think the providers that don't try to go for the race to the bottom will survive and grow. People will begin to understand the lousy VPS experience that comes with oversold crap.


Completely agree. It may take a while, but over time I'm sure it will work out that way.


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## drmike (Sep 7, 2013)

The future isn't going to continue at these prices and crazy jumps in resources.

There's a ceiling and folks have hit it.  The ceiling is what you can get away offering that is low use while extracting a fair dollar or two from the buyer.

ROI on an annual plant at $15 or less isn't realized until month 11+.  Isn't anything to run a company on.

The other side of things, the 2GB+ RAM offers,  ahh I won't.  There are interesting offers like from Iniz out there and AnthonySmith seems to be in on the fun too now.  Only model to make it fly is low/fixed costs + large servers --- 128GB of RAM and above, SSDs + 10k RPM drives and lots of them.   Bottom line, those aren't cheap servers and aren't what the average CC 2GB seller is running.


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## wlanboy (Sep 7, 2013)

buffalooed said:


> ROI on an annual plant at $15 or less isn't realized until month 11+.  Isn't anything to run a company on.


But they are often used as static page hosts, dns servers, mail servers, irc bouncer and vpn servers.

Not much cpu usage, not much disk I/O only some net I/O limited on the timezones of the users.

 

And they are the kick in product for the companies. I easily spend 15$ to test a newcomer or a (for me) new host. And I stick to them. And if I need a big "expensive" box I will buy it from one of my proven hosts.

 

Where do you want to spend 10$ a month:


Unknown hoster with some good reviews
Hoster where you run two 128 MB vps for two years without any hassle.


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## drmike (Sep 7, 2013)

wlanboy said:


> And they are the kick in product for the companies. I easily spend 15$ to test a newcomer or a (for me) new host. And I stick to them. And if I need a big "expensive" box I will buy it from one of my proven hosts.


That's how I buy generally also.  Easier to part with a $20 for a year then to pay month on month end a $5+.

The magic for these annual companies really isn't to have folks parked on annuals.  Cash flow isn't there.  

It's why I question the viability of much of the low cost marketplace.  Where's the upsale, the better ROI 2nd year, etc.

If the companies I buy annuals from had reasonably prices larger plans, even on limited promo, I'd probably pick one up.  Especially where those companies have multiple locations.

It's sad what is going on now with no frill, nothing different, featureless mass BIG BIG plan sizes and the current annual craze just to get customers.   All they are doing is changing chairs (customers).  It isn't sustainable.


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## kaniini (Sep 7, 2013)

buffalooed said:


> The future isn't going to continue at these prices and crazy jumps in resources.
> 
> There's a ceiling and folks have hit it.  The ceiling is what you can get away offering that is low use while extracting a fair dollar or two from the buyer.
> 
> ...


This is basically why I am not really doing any spend to play the budget game.  Any playing I would do would be to operate loss leaders with the intention of crashing the budget side of things.  I do know that some of the players racing to the bottom are doing so with the intent of driving attention back towards their more profitable brands.

But, again, I don't think it's necessary.  We're seeing really good conversions here.  I think most people see the budget game for what it is -- oversold instances that you wouldn't want to do serious business with.  DigitalOcean is more scary to me than the hyper-budget players, frankly.  They're playing in my market segment and they have the VC backing... which makes them an interesting competitor.


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## drmike (Sep 7, 2013)

DigitalOcean will burn up all the VC money they can find.

Venture backing is notoriously a pain and short attention span.

What is interesting in general with them, as an outsider, is this VPS turned into cloud-like offering.

Believe me, things are going there for folks that are going to remain and grow businesses in this industry.

Question is which software stack will do enough to be valuable and how will you sell that when everyone else is?  Oh silly, roll your own.


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## Echelon (Sep 16, 2013)

A lot of the race to zero is artificially created every summer with the plethora of summer hosts who refuse to do the proper research, calculations, and legwork that goes into properly budgeting, calculating profit margin, and offering a sound and reliable service that can sustain itself cashflow-wise. Furthermore, when you have those same summer hosts turning their businesses into a personal piggybank, they're set up to fail from the get-go. There's definitely no shortage of providers creating loss-leader services in hopes of converting serious users into customers of their income-generating offerings, but that being said, they have an income from other services to back their ventures.

DigitalOcean seems to be one of those services that was hyped up by the inner circle due to its' VC funding and subsequent VC contacts, but with the way it's been handling itself, I see it being knocked off of its' pedestal sooner or later.

At the end of the day, the race to zero will take victims, but the brightest ones will continue to stay the course and realize that there's no substitute for sustainable business.


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