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

HalfEatenPie

The Irrational One
Retired Staff
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

New Member
Verified Provider
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.
 

fizzyjoe908

New Member
Verified Provider
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
 

HalfEatenPie

The Irrational One
Retired Staff
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.  
 

willie

Active Member
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.
 

DomainBop

Dormant VPSB Pathogen
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)
 

HalfEatenPie

The Irrational One
Retired Staff
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)
Now only if that was in the States...
 

HalfEatenPie

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

drmike

100% Tier-1 Gogent
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).
 

HalfEatenPie

The Irrational One
Retired Staff
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.
 

DomainBop

Dormant VPSB Pathogen
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

100% Tier-1 Gogent
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 :)
 

willie

Active Member
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.
 

Steven F

New Member
Verified Provider
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.
 

drmike

100% Tier-1 Gogent
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.
 

Steven F

New Member
Verified Provider
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/
It's ~$800, they're charging $1,080.
 

drmike

100% Tier-1 Gogent
$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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