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Race to the Bottom News: 2GB RAM, 2IPs for $1.67 monthly

GVH-Jon

Banned
Alright ChicagoVPS, you wanna race to the bottom? It's on!

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[/troll]

In all honesty though they probably profit a lot from that. You guys would be surprised about bulk pricing @ CC :)
 
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WebSearchingPro

VPS Peddler
Verified Provider
Really, you can't offer more than unlimited can you? :D

I think you are on to something ... "Unlimited+1GB RAM" ...

Edit: On-Topic, realistically they can likely provision ~100VPS comfortably per node based on how many frivolous purchases are made for that plan, I'd say a good 50% of them will remain unused for the next three years. Its likely they are just doing this to make a ton of noise about the company as well as get the capital for a few new nodes.

That's an easy $6000 per node node that can be used to purchase ~6 new nodes and the cycle continues, you also have to keep in mind that these aren't their only servers, they make enough money in monthly VPS payments to pay the colo costs for all the new servers they are purchasing.

I could see the concern for a smaller company, but for them it likely makes sense. Its almost an instant injection of money into the company without the need to take out any loans for new equipment of wait for trickle sales.
 
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vRozenSch00n

Active Member
The thing is when I was still their customer before the data leak, CVPS always answered my tickets in a timely manner and the $7 VPS was good until I lost all my data when the server crash.

Then Chris starts to show "wise" attitude in the forums. The leak and that, worries me.  :(

So I left  :p
 

vRozenSch00n

Active Member
That's an easy $6000 per node node that can be used to purchase ~6 new nodes and the cycle continues, you also have to keep in mind that these aren't their only servers, they make enough money in monthly VPS payments to pay the colo costs for all the new servers they are purchasing.
So, they need to have 2 groups of customers at least.

The first group will not bring income for the next 3 years, the second group are those who pay on a monthly and quarterly basis to cover the monthly cost and income.

Hypothetically, when all customers converted to the 3 years plan, then there is no monthly income to cover the cost. 
 

concerto49

New Member
Verified Provider
Alright ChicagoVPS, you wanna race to the bottom? It's on!


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[/troll]


In all honesty though they probably profit a lot from that. You guys would be surprised about bulk pricing @ CC :)
Bulk pricing from cc? Why would they need that?
 

Francisco

Company Lube
Verified Provider
So, they need to have 2 groups of customers at least.

The first group will not bring income for the next 3 years, the second group are those who pay on a monthly and quarterly basis to cover the monthly cost and income.

Hypothetically, when all customers converted to the 3 years plan, then there is no monthly income to cover the cost.
I think you're looking at it wrong. The problem with a provider like CVPS is their only competition is...themselves. They had their ton of slickdeals users paying in at $40/y for a ~2G and seemed reasonably happy minus the hacks. Now, those $40/y payments ($120/3y) are now paying $60/3y if they start paying renewals. Sure, that's a surge of upfront cash but come 1 1/2 years in you're at a loss.

But, who knows, it might be a strong idea, especially if they're able to predict where the market is going (2G|$10/y) and see it as actually getting more out of the users now than down the road.

It's all interesting but I think it just ends up in the same problem that OVH had. Their cheaper deals didn't do a ton to bring in new, constant, capital. Sure, they sold the equipment but it was to their own users.

Francisco
 

texteditor

Premium Buffalo-based Hosting
Hey you guys actually don't have to give them the benefit of the doubt, assuming long-term planning went into this and all...
 

WebSearchingPro

VPS Peddler
Verified Provider
So, they need to have 2 groups of customers at least.

The first group will not bring income for the next 3 years, the second group are those who pay on a monthly and quarterly basis to cover the monthly cost and income.

Hypothetically, when all customers converted to the 3 years plan, then there is no monthly income to cover the cost. 
That's assuming people are aware of the new deals, typically only a handful of people care enough to ticket for a discount, and its not like they are going to get a refund anyways, it will just be a discount on the next renewal if at all on a previous yearly.
 

vRozenSch00n

Active Member
In all honesty though they probably profit a lot from that. You guys would be surprised about bulk pricing @ CC  :)
Not really surprising, I bought a VPS from one of CC retailer, and I got blacklisted IP. It seems they dump all the bad IPs cheap too.

I'm not telling who the provider is because he is my friend, and used to be @Francisco's friend too and he has a family.
 

devonblzx

New Member
Verified Provider
23 users?  You're vastly underestimating the overselling that goes on with many low end OpenVZ providers.  When ChicagoVPS's database was hacked and posted on the Internet in June it was revealed that they regularly sell 200GB-300GB worth of RAM per 32GB E3 node.
I said 23 users per processor, which for an E3 would have been 92 users, ~184GB.  So 200 sounds about right with slim margins.  Still I stand with my point, 23 users on a processor means you won't ever realistically get to use that 2GB or the amount of CPU you should be able to with a 2GB VPS.

As for bulk pricing at CC, I doubt CC gets any better pricing than any other dedicated server provider.   Even with bulk pricing, there are still power costs and the standard hardware costs.  Intel and the big hardware suppliers don't cut that great of breaks in bulk.  I would only expect them to be paying about 10-15% less than what you'd pay on Newegg or a similar site.  Then CC has to have mark up, don't they?
 

Francisco

Company Lube
Verified Provider
I think it is more about "we do have hardware sitting around" and "want to gain more users/more ips".
 Well, you have Urpad leaving (30+ rentals?), & shardhost leaving (probably same or more), & a few other smaller people going bust. They've had to terminate a lot (10 some odd) of large contracts for IP space as well due to spam problems. It's possible they actually fixed things with spamhaus, but the majority of the RDNS entries are gone.

Last time there was a rumoured large fish leaving, there was a large (pretty much 0 -> 5 - 10) increase in SSD offers, all using Intel 520 drives. To date the only provider continuing with them is pretty much Chris and servermania for now.

It's also possible SM's just selling inventory that didn't move yet.

What's even crazier? Asking for a price match!
You've been asked? Christ.
 
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Epidrive

New Member
Verified Provider
I think they run on an assumption that you'd abandon the server by the 2nd year.. So they're looking at it like its 60 /yr. Just imo
 

Francisco

Company Lube
Verified Provider
I think they run on an assumption that you'd abandon the server by the 2nd year.. So they're looking at it like its 60 /yr. Just imo
I'd hope not.

He defends his brands like no other so I can't see him booking on a crap shoot of cancellations.

Francisco
 

peterw

New Member
I think it is more about "we do have hardware sitting around" and "want to gain more users/more ips".
Good point.

Well, you have Urpad leaving (30+ rentals?), & shardhost leaving (probably same or more), & a few other smaller people going bust. They've had to terminate a lot (10 some odd) of large contracts for IP space as well due to spam problems. It's possible they actually fixed things with spamhaus, but the majority of the RDNS entries are gone.
It is better that they sell their stuff themselfs than creating a new company to do that.
 

wlanboy

Content Contributer
I'd hope not.


He defends his brands like no other so I can't see him booking on a crap shoot of cancellations.


Francisco
Maybe not to cancle the vps but to abandon it.

Don't think that a lot of people use them for something important. So manly dev boxes with a lot of idle time.
 

blergh

New Member
Verified Provider
Fuck learning from older offers & history in general, shitty underpriced offers ohoy! Let's sell more imaginary resources for less!
 
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