# Dacentec New Price Schemes - Lowers Costs - Rent Only?!



## HalfEatenPie (Oct 20, 2014)

So Dacentec recently sent this email. 



> Thanks for your continued support. We wanted to give you first access to a new pricing model we will be launching soon. This model gives you the option for "rent only" pricing. The links are below so you can check them out. Please contact sales if you have any questions about the offers.
> 
> Dacentec Support


I removed the link (because I don't know if they want to hand it out or not?), but they're now selling Dual L5520s for 60/month on a rent-only model.  There are one-time buy-downs, which are $50 up-front cost for -$5 monthly, $100 up-front cost for -$10 monthly.  In addition, you can get the Rent-to-Own model by adding 15 dollars extra monthly.  

So I guess if you want actual hardware on a RTO model at a cheaper price, probably best to get some now at a cheaper price!  At the current price point, Dacentec sells Dual L5520s for 70/month on RTO (for one year, $840.00).  That's it.  Under the new price scheme, over a year (on RTO with Dual L5520s) becomes a total of $880.00 with the 100 dollar up-front buy-down.  

So, if you want to go RTO on servers at budget prices, now is probably the best time!

*Edit:* Here are the links (I don't think it's that big of a deal if postd)

https://billing.dacentec.com/hostbill/?cmd=cart&action=add&id=288

https://billing.dacentec.com/hostbill/?cmd=cart&action=add&id=279


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## Steven F (Oct 20, 2014)

How much longer will these dual L5520s make sense to colocate/offer? At their current market price, they cost more than a brand new E3 after 18 - 24 months. With E3 v1s starting to come to market, I don't really think it's a good investment.


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## fizzyjoe908 (Oct 20, 2014)

Steven F said:


> How much longer will these dual L5520s make sense to colocate/offer? At their current market price, they cost more than a brand new E3 after 18 - 24 months. With E3 v1s starting to come to market, I don't really think it's a good investment.


Hm, those two aren't really comparable quite yet.

Current E3-1230v1 price: $140 each

Current L5520 price: $30 each


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## HalfEatenPie (Oct 20, 2014)

I believe the reason there's a giant influx of L5520 chips is because a ton of large companies (Facebook being one) originally had Dual L5520s in production and recently upgraded to another system (Citation needed because I don't remember where I read it).  L5520s started flooding the market and really lowering the price.  

E3s are getting cheaper, but not at the same rate the L5520s are.


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## willie (Oct 20, 2014)

Based on passmark it looks like a dual L5520 is roughly equal to a single e3-1230v1 or so in computational speed.  The e3 will have some newer instructions including AES-NI.  The L5520 is an actual server processor and can use ECC memory.  On the other hand the E3's memory is probably faster.  Maybe the L5520 can use more modules.  I don't know which one requires more expensive ram.

60 bucks for a decent dedi hosted in the US is pretty good.  If it's this machine:

https://billing.dacentec.com/hostbill/index.php?/cart/&step=3

it includes 36gb of ram (ecc?) and a 1tb hdd, and can be expanded to 72gb ram and up to 4 drives (but the cost of 2tb drives is kind of steep) and you can get up to a /29 with justification, without paying extra for ip's.  This seems pretty good if you want to do something ram intensive on the cheap, or host Low End Spirit style VPS's (they apparently have ipv6). 

If you don't need your box in the US and don't have the high ram or ecc requirement and don't need extra ipv4's, there are some quite powerful cheap servers in the Hetzner robot auction right now.  I have an i7-3770 which is somewhat faster than most E3's, with 2x 3TB HDD and 32GB of ram, for under $40 a month (34 euro minus VAT credit).  Those have since gone up in price, but there are some 16gb servers that are even cheaper.


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## DomainBop (Oct 20, 2014)

> If you don't need your box in the US and don't have the high ram or ecc requirement and don't need extra ipv4's, there are some quite powerful cheap servers in the Hetzner robot auction right now.  I have an i7-3770 which is somewhat faster than most E3's, with 2x 3TB HDD and 32GB of ram, for under $40 a month (34 euro minus VAT credit).  Those have since gone up in price, but there are some 16gb servers that are even cheaper.


Hetzner fixed price auction deals as of tonight:

i7-2600, 16GB, 2x3TB, 10TB, bw, 30 euros w/VAT (25.21 w/o VAT, $32)

i7-3770, 32GB, 2 x3TB, 10TB bw 38 euros w/VAT (31.93 w/o VAT, $41)

E3-1245v2, 32GB ECC, 2 x 3TB, 20TB bw, 50 euros w/VAT (42 euros w/o VAT, $54)

3 additional ipv4 are available for 1 euro each (0.81 w/o VAT, $1.04)


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## HalfEatenPie (Oct 20, 2014)

DomainBop said:


> Hetzner fixed price auction deals as of tonight:
> 
> i7-2600, 16GB, 2x3TB, 10TB, bw, 30 euros w/VAT (25.21 w/o VAT, $32)
> 
> ...


Now only if that was in the States...


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## HalfEatenPie (Oct 21, 2014)

I've posted the links!  I'm assuming it's not that big of a deal to post them so... yeah.


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## NateN34 (Oct 21, 2014)

HalfEatenPie said:


> I've posted the links!  I'm assuming it's not that big of a deal to post them so... yeah.


I am only seeing RTO servers from those links. Maybe the rent-only ones sold out?


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## Darwin (Oct 21, 2014)

Probably, those links worked this morning.


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## InertiaNetworks-John (Oct 21, 2014)

They still work for me.


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## drmike (Oct 21, 2014)

Not a bad change per se for Dacentec.  More cost for RTO, which always sort of was more costly than buyers realize.

I mean the rate while it goes down on their RTO at end of contract, doesn't do so automatically (requires you ticket them and sign off on some stuff).  Then they doink around the pricing a bit.   So RTO there is kind of not such a great value.

They are pushing people into pure dedicated model which is better for them.  

I've been expecting a change at Dacentec since the new buyer/acquirer took control what was that? a year ago.

US market needs more real competition.

I do wish Hetzner would float over to the US and OVH's offers in Canada still have yet to diversify to address US market (just recently branded a US offer on dedis via KimSufi line and offering a mere 2 servers).


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## HalfEatenPie (Oct 21, 2014)

Yeah well for me Dacentec's prices on RTO hardware was similar to that of a standard dedicated server in other locations, so I had the "might as well" mentality on it.  "might as well own it if I can and colo it then".  

The manual contacting them after the RTO period is done is simply to make sure if you want hardware replacements or not.  

CentriLogic now owns Dacentec, yep.  Their current network in Lenoir is this: http://bgp.he.net/AS31863 (whereas CentriLogic currently has http://bgp.he.net/AS19693 in their other Datacenters).  Basically nLayer, Telia, and HE (with Telia having the fattest pipe).  Really not bad in my opinion.


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## DomainBop (Oct 21, 2014)

drmike said:


> I do wish Hetzner would float over to the US


That'll never happen due to all of the costs involved in buying property and building a datacenter in the US.  Hetzner is one of the very few hosting companies that not only own their own "datacenters"  but they also own the buildings the datacenters are located in and the land the buildings are built on (and they also employ their own in house building/construction crew in Germany to build them).  Their datacenter parks in Falkenstein and Nuremberg are also "green" and powered by 100% renewable energy (0% CO2 emissions). 

They wouldn't be able to achieve the same low operating costs and total control of all aspects of their operation that they have in Germany if they rented space in a facility owned by someone else in the US, and it would take them years to achieve enough mass to make it worthwhile to replicate their "automated/total control of everything" DC model in the US.


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## drmike (Oct 21, 2014)

DomainBop said:


> That'll never happen due to all of the costs involved in buying property and building a datacenter in the US.  Hetzner is one of the very few hosting companies that not only own their own "datacenters"  but they also own the buildings the datacenters are located in and the land the buildings are built on (and they also employ their own in house building/construction crew in Germany to build them).  Their datacenter parks in Falkenstein and Nuremberg are also "green" and powered by 100% renewable energy (0% CO2 emissions).
> 
> They wouldn't be able to achieve the same low operating costs and total control of all aspects of their operation that they have in Germany if they rented space in a facility owned by someone else in the US, and it would take them years to achieve enough mass to make it worthwhile to replicate their "automated/total control of everything" DC model in the US.


There are plenty of places to buy land and do your own development in the US at a reasonable cost.  The whole land developer renting/leasing to you model in the USA is really short sighted for any datacenter.  Not like a DC should be planning on moving any time soon.  Meaning investing properly in real estate and physical plant should afford a built to spec efficiency that you won't realize with some slab build industrial leasing slop, plus should have asset for lending flex where equity realized or loan paid down.

Plus of course there are slews of money available for building new stuff in many US counties.

Even flying folks over to do the build out is feasible, having previously worked with masses of Germans in the States sent from back home for a portion of a year or more.

US is only non competitive in dense population counties where the theft from folks is legendarily high.  Those markets have various indicators of dysfunction like real estate that is rocketing upward senselessly and inability for people of normal means to reside in such places.  See Manhattan and the population drop of a million roughly since 2000.

Someone call Hetzner and tell them to get over here   I'll take services from them in Canada though too


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## willie (Oct 28, 2014)

Those Hetzner prices lasted most of the week but they seem to have figured out they were undercharging, so prices have crept steadily upwards since.  That i7-2600/16gb at 30 euro fixed price now enters the auction at 35 euro, the i7-3770 enters at 38 (instead of 31 fixed), but interestingly the 32gb versions are just 1 or 2 euro more.  Oh well.  Even now it seems too good to last.  I'll probably need a second server in a few months when the disks of my current one get full.  I hope they haven't gone up too much by then.


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## Steven F (Oct 28, 2014)

Their business model is very interesting. I completely don't understand it. They're charging $1,080 for a server that costs them ~$800 to build (their E3-1230 v2 with 16 GB RAM, 2 fixed bays, and a 2 TB HDD or 256 GB SSD). That doesn't really leave much for profits, but they're making it work. Good for them.


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## drmike (Oct 28, 2014)

Steven F said:


> Their business model is very interesting. I completely don't understand it. They're charging $1,080 for a server that costs them ~$800 to build (their E3-1230 v2 with 16 GB RAM, 2 fixed bays, and a 2 TB HDD or 256 GB SSD). That doesn't really leave much for profits, but they're making it work. Good for them.


Question is, does it really cost $1080 for that E3?  $1080 might be a good price in public one off buying currently (I don't buy E3's so no clue).

I guarantee they buy used, as they have historically.   They are buying off lease gear.

That E3-1230 - it's End of Life by Intel, Q2 2011 release.  Which certainly correlates to much cheaper than use to be.

Dollars count.  You buy a full rack of these and you get insane pricing.  You buy multiple racks worth and even better.

Remember Dacentec isn't a one location brand.  Dacentec might only be known for North Carolina, but their parent company has stuff all over the place:

http://www.centrilogic.com/locations/



> September 18, 2014 – Lenoir, North Carolina – CentriLogic, a global provider of managed hosting, cloud computing, co-location, and advanced IT outsourcing solutions, today announces the completed expansion of its Lenoir, North Carolina data center.
> 
> The multi-million dollar expansion project occurred over the past six months and included a conversion to concurrently maintainable  “2N” redundancy by doubling the site’s critical power capacity; adding 100 tons of additional cooling capacity; increasing physical security using on-site biometrics and two-factor authentication; and building out a 9,000 square foot physical space expansion that includes a 5,000 square foot enterprise data hall equipped with cabinets and cages dedicated to co-location and managed services customers.
> 
> The Lenoir facility’s infrastructure has been enhanced to adhere to enterprise customers’ stringent security, uptime and compliance requirements. The center now contains more than 23,000 operational square feet and has achieved  SSAE 16 Type II, ISO 27001, and ISO 9001 certifications.


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## Steven F (Oct 28, 2014)

drmike said:


> Question is, does it really cost $1080 for that E3?  $1080 might be a good price in public one off buying currently (I don't buy E3's so no clue).
> 
> I guarantee they buy used, as they have historically.   They are buying off lease gear.
> 
> ...


It's ~$800, they're charging $1,080.


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## drmike (Oct 28, 2014)

$1080 income per year  - 800 E3 commodity cost = $280 income pre-other-cost profit

$280 / 12 months = $23 a month pre all costs.

$23 - power = what's this draw?   50 watts mixed use... probably more...

50 x 720 / 1000 * .05 = $2~ in power @ 5 cents KwH.

$21 margin a month.

Minus staffing which is a facility fixed costs against all accounts in an established place.

Let's call it $10-11 a month in profit as-is.  Meh, doubt it. Possible, but doubtful unless they are planning on mopping up folks and then floating prices upward which won't work more than a bit  Say $4-10 a month per unit.

I think they are more in the $650~ per unit cost.  Mathematically for this to work as legit business.

Base units with RAM are available way below $800.  2TB SATA drive = $70.... 240GB SSD drive $135

Number are straight up accounting math formula for this model.  At set costs or nothing moves.

There website doesn't say off lease on these.  Doesn't say new either... So anyone's guess.


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## fileMEDIA (Oct 28, 2014)

Steven F said:


> How much longer will these dual L5520s make sense to colocate/offer? At their current market price, they cost more than a brand new E3 after 18 - 24 months. With E3 v1s starting to come to market, I don't really think it's a good investment.


Es long as they bring more profit than eats money for energy consumption it will be bought.

Currently you get on ebay DL380 G6 with 2x L5520 and some other stuff for around 300 to 400€. This is nothing for this compute power and features. Add a 10G NIC and 64 or 128GB RAM to this nodes and you will have nice VM nodes for the next 2 years.


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## drmike (Oct 28, 2014)

Steven F said:


> How much longer will these dual L5520s make sense to colocate/offer? At their current market price, they cost more than a brand new E3 after 18 - 24 months. With E3 v1s starting to come to market, I don't really think it's a good investment.


From an operation like Dacentec, as long as the gear is cheap, abundant and in racks and people buy it, they will continue selling it.  Long term their offer price should only go down.  $50 RTO eventually at $35 RTO.

You can pick up 54xx/55xx units loaded in a rack these days for a song.  Populated with RAM, drives, everything.  Not even $200 a unit with big configs.

They'll be out here offered until something really more compelling comes in at same $50 price point in the Dacentec model.

Dacentec's model rocks.  Disruptive in ways.  The RTO niche part.


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## Francisco (Oct 28, 2014)

Who else is doing budget RTO?

Is Dacentec the only ones?

Francisco


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## qps (Oct 28, 2014)

There are a few issues with doing RTO on a massive scale.

1) Rent to own is probably considered a finance contract of sorts.  If you sell to an individual, this puts you under the regulations of the Consumer Finance Protection Bureau and all of the red tape that comes with that.

2) After the hardware is paid off, some customers will want to have it shipped out.  This involves pulling out of the cabinet, packaging and shipping the servers.  Packaging isn't cheap, and creates a whole new liability and a lot of work.  What if a server gets damaged in shipping?  What if a server gets lost in shipping?

3) If the customer continues to co-lo the server and eventually stops paying, most states have laws about how long you have to hold the equipment after it is abandoned.  This will create a whole new additional process of holding servers and then figuring out how to dispose of them.

There's probably more than that.  It's a lot more hassle than it is worth from a provider standpoint.  The margins on this gear are so small anyway that if any of the problems I mention pop up, you probably burn through more than the profit for the whole time the customer had the server.


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## dacentec (Oct 28, 2014)

RTO will still be available, no plans to stop offering magical deals. Now we have the best of both worlds. We will try to have parity between the new and old products in RTO mode.

We do a lot of things differently, and we build a lot of things to optimize what we do. One example out of many is our server racks, which were designed in-house and manufactured in Lenoir, NC. We are not just snapping together parts and playing with the numbers, we are redesigning the IAAS stack.

We continually work on improving, thanks for the patronage, criticism and competition.


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## willie (Oct 28, 2014)

Hi Dacentec, is it possible to get the hard drives shipped out from these servers (RTO converted to owned colo), and how much does that cost?  What about putting new drives in?  Thanks.


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## HalfEatenPie (Oct 28, 2014)

dacentec said:


> RTO will still be available, no plans to stop offering magical deals. Now we have the best of both worlds. We will try to have parity between the new and old products in RTO mode.
> 
> We do a lot of things differently, and we build a lot of things to optimize what we do. One example out of many is our server racks, which were designed in-house and manufactured in Lenoir, NC. We are not just snapping together parts and playing with the numbers, we are redesigning the IAAS stack.
> 
> We continually work on improving, thanks for the patronage, criticism and competition.


I absolutely love the servers and I actually have one of the E3s (I've already finished an RTO on a Dual L5420).  

I do have a question though, the noc-ps seems to be incredibly finicky and takes a long time to get a server's OS reinstalled.  And I mean more than 2/3 hours, I mean like 8 or more hours (i've once had the noc-ps running overnight and it still was in the process of "downloading" the image or something).  Is there any steps you guys could take to make this faster?  I don't use it often but every single time I do it doesn't work for me.  I've seen noc-ps work so much faster for a few other providers, so I think it's isolated to simply Dacentec itself, but again I'm not too sure.  This is actually mostly why I end up asking for the KVMoIP (or sometimes I'm just stupid and lock myself out from SSH... good thing these don't happen often... *cough cough*).

Anyways, thanks for the awesome service.  I don't like how the cost to add RTO is going to go up, as my main justification for going with Dacentec and your RTO was that "I'm going to be using this long-term anyways, might as well chip in the extra 5 dollars and go RTO", but everything else is perfectly fine!


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## drmike (Oct 28, 2014)

Francisco said:


> Who else is doing budget RTO?
> 
> 
> Is Dacentec the only ones?
> ...


At scale and with awareness and at low prices, I'd say so.

Other RTO stuff I see is one off folks moving idle misfit stock.  Or people taking their normal dedis and throwing a hefty per month surcharge on for the ownership part.

There is plenty of cheap and powerful gear for a song out there.  No reason why savvy DC operators aren't snapping up racks worth and doing the RTO model ala Dacentec pricing.  Someone else sorely needs to come with competing products to market.  Why?  Because we all need multiple geographic locations, diverse networks, etc.


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## Francisco (Oct 28, 2014)

Power.

A lot of that older gear eats power, especially the 54xx stuff.

Francisco


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## Steven F (Oct 29, 2014)

Francisco said:


> Power.
> 
> 
> A lot of that older gear eats power, especially the 54xx stuff.
> ...


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## HalfEatenPie (Oct 29, 2014)

Steven F said:


> Francisco said:
> 
> 
> > Power.
> ...


Huh. Any additional content to this?


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## Francisco (Oct 29, 2014)

HalfEatenPie said:


> Huh. Any additional content to this?


Fully buffered DDR2 chunks 0.1<>0.2A per stick, CPU's are 60W<>80W/ea. It all adds up very quickly.

Francisco


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## HalfEatenPie (Oct 29, 2014)

Francisco said:


> Fully buffered DDR2 chunks 0.1<>0.2A per stick, CPU's are 60W<>80W/ea. It all adds up very quickly.
> 
> 
> Francisco


Oh I meant to @Steven F who just seemed to quote you and not write anything.

But yeah, Dual L5420s are pretty power intensive for what they bring (now-a-days anyways)


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## drmike (Oct 29, 2014)

HalfEatenPie said:


> Oh I meant to @Steven F who just seemed to quote you and not write anything.
> 
> But yeah, Dual L5420s are pretty power intensive for what they bring (now-a-days anyways)


Power matters only a bit.  Big picture 5420's are going to eat what?  < 2A most of the time.  Guess I need to find my meter and go test one over the weekend   Been meaning to set up a test environment anyways.

2A = 240 watts.

240 x 720 hours = 173 KwH

173 x 5 cents = $8.65 /mo

$103.80 per year

$103.80 is real cash, but at what cost to acquire new machines?

E3 @ $650 w/ 16GB RAM and no drives   vs. $200 5420 w/16GB RAM and no drives  (both used/refurb)

$450 spread there.   That's 4 1/2 years roughly of power money difference.

Power savings on a server matters when you renting colo space and have that nasty per rack cap cramming you.  To a DC, power matters but to lesser small sort of way.   They care about megwatts consumed overall......

That's what is slick about the Dacentec model.  Take off lease gear no enterprise or reseller style company wants = cheap per unit.  Place that out there in the expensive dedicated rental server market then put a cherry on top for the RTO.  Presto whole big audience of folks that no one was addressing.

I've recommended multiple people to Dacentec for the RTOs.  Startups, entrepreneurs, a tech everywhere sort of person. To all the price is right and ownership gives some perception of additional control.  Unsure if Dacentec  supports shipping them drives (they should).

Who else is going to bring me a RTO offer  ?


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## willie (Oct 29, 2014)

Where do you get that 5 cent power?  Around here, 1 watt of power is $1 a year, approx, if you can get it from the power company.  In a data center if you're renting space, it's generally a lot more.


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## AutoSnipe (Oct 30, 2014)

All i can say, is it's about time, as not everyone goes to their full term and comes out with a Server. 

This is obviously an option they should have had long ago, and a welcome change. 

But i still love their RTO Options


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## qps (Oct 30, 2014)

@drmike, you can't just look at raw power cost.  There are a lot of other costs involved (power infrastructure, cooling cost, cooling infrastructure, possibly water costs, water infrastructure, maintenance, etc).

Additionally, most data centers aren't setup for more than 5 or 6 kW per cabinet.  If you are in a data center where power density is limited, some of the older servers can force you to put fewer servers per cabinet, which can be problematic if real estate costs are a factor (in markets such as NYC metro).


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## KuJoe (Oct 30, 2014)

I love my RTO server. I've had it for over 12 months but not changing pricing because I like having the free hardware replacement.


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## drmike (Oct 31, 2014)

qps said:


> @drmike, you can't just look at raw power cost.  There are a lot of other costs involved (power infrastructure, cooling cost, cooling infrastructure, possibly water costs, water infrastructure, maintenance, etc).
> 
> Additionally, most data centers aren't setup for more than 5 or 6 kW per cabinet.  If you are in a data center where power density is limited, some of the older servers can force you to put fewer servers per cabinet, which can be problematic if real estate costs are a factor (in markets such as NYC metro).


I agree... Always use about 2-3x factor on power for the other related overhead and cooling.

Lenoir though, there is no real estate mass inflation and power has to be low there.

It's good to look at lesser tier markets like Lenoir from cost side.  Only downside as customer tends to be backhauling to those other "real" city POPs and the added latency.


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## rds100 (Oct 31, 2014)

drmike said:


> I agree... Always use about 2-3x factor on power for the other related overhead and cooling.
> 
> Lenoir though, there is no real estate mass inflation and power has to be low there.
> 
> It's good to look at lesser tier markets like Lenoir from cost side.  Only downside as customer tends to be backhauling to those other "real" city POPs and the added latency.


Well, 2x-3x is a little extreme. Most datacenters would aim for 1.5x or less. 3x would be extremely inefficient.


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