SecureDragon Changes Up Their Bandwidth Pricing

[raindog308]

Got an email from SD that they've changed up their pricing.

For OvZ, I notice they're provisioning a lot less BW, though the email says it's sufficient to satisfy 90% of their customers.  That doesn't surprise me, really - I doubt most people use the BW they pay for.

Some before/after:

32MB OvZ: before 500GB, now 50GB

96MB OvZ: before 500GB, now 150GB

128MB OvZ: before 500GB, now 250GB

512MB OvZ: before 1000GB, now 300GB

Actually 500GB looks like the biggest they go now, on 2048M boxes.

Comparing via http://web.archive.org/web/20130529221005/http://serverdragon.com/openvz.php

and https://securedragon.net/openvz.php

 

[drmike]

Oh boy, this is never a good sign.  Hoping @KuJoe is fine.

Those new plans are lean, especially on the 32MB one.  They were all 500GB before    Except the 1 and 2GB plans.

 

[KuJoe]

We changed it up so we can expand and reduce prices without increasing expenses. The whole goal was to reduce our prices and we found that bandwidth was the limiting factor since increasing our commits would prevent us from expanding as fast as we would like. There is an announcement on our site with more details about our expansion plans.

 

[drmike]

 

We are currently working out the specifics, but at this time we are making plans to ship servers to 2 new locations: Los Angeles, CA and Chicago, IL

[from: https://my.securedragon.net/announcements.php?id=345 ]

Ahhh, well, umm.

Which facilities would these be?

 

[KuJoe]

COLO@

 

[drmike]

Whew, I thought we lost you to the dark side @KuJoe.

Colo@ is going like gangbusters lately.  Seems to be a big active sales time for them.  Good company.

 

[KuJoe]

They're one of the few that have responded to our pre-sales e-mails and are in both LA and Chicago.

 

[Francisco]

They're one of the few that have responded to our pre-sales e-mails and are in both LA and Chicago.

Yep. We talked to them about getting some POP's open through-out their locations.

It's a good setup, especially if you get CHI for a good price.

Francisco

 

[qps]

@KuJoe IANAL, but once you get over a certain level, you create a tax nexus and have to file to become a foreign LLC and file income taxes in California.  Might be worth considering before you ship equipment out there.

 

[KuJoe]

Any hosts in California that can provide some insight into this? According to my limited research it looks like we'll have to register as a foreign company for $800/year.

 

[wlanboy]

I got that email too and I am not amused because I will not buy any additional vps from SD.

Because all I read is:

We don't want to host any new users that want to use their vps as a vpn server.

And please don't tell me you cap it just to have "same prices on all locations".

Not for that "yet another host in Chicago and Los Angeles" thing.

 

[KuJoe]

I got that email too and I am not amused because I will not buy any additional vps from SD.

Because all I read is:

And please don't tell me you cap it just to have "same prices on all locations".

Not for that "yet another host in Chicago and Los Angeles" thing.

This has nothing to do with VPNs and if it did we'd just disable the VPN modules. I would say nearly half of our clients run VPNs while at the same time less than 20 OpenVZ clients per month use more than 100GB of bandwidth so these limits are more than enough for all but 20 clients who would need to upgrade from a $9.99/year plan to an $13.99/year plan to prevent going over their quota.

That being said, our experience has been that no matter what plans are on the nodes when we reach 50% capacity we see about 15-20Mbps of usage for that node (95%) and to give you an idea, our last bandwidth quotes in Tampa were in the $50-$200/Mbps range (with a 100Mbps commit). If a 32MB client decided to use 100% of their old bandwidth (500GB) their 1 payment per year at the old price wouldn't even cover their first month at 1Mbps (~330GB/month). These new servers have 350% more capacity so we would reach that 15-20Mbps mark without breaking a sweat. Right now if everybody on one node decided to use 100% of their bandwidth our overages would be in the $XXX range because our servers are smaller and have a lot less clients per node. If we kept the same bandwidth numbers with our new nodes we would have the potential for $XXXX in overages which would set us back a lot because of the planned expansion and server upgrades we are performing.

While I know it's selfish, after selling VPSs for 3 years our hope is for my partner and I to actually collect a paycheck by 2014 since we're currently putting in at least 40 hours a week (and with me developing a FOSS SolusVM replacement I'm putting in a lot more). Needless to say, with the amount of abuse we put up with and deal with on a daily basis the last thing we want is to have to take out a loan to pay for bandwidth overages so we've made it so even if everybody decided to do a wget to Cachefly every minute while we're sleeping we wouldn't have to worry about it.

Our contract in Tampa is up next year so we'll be able to negotiate either better bandwidth prices or find a new data center if it came down to it and when that happens we will adjust our plans accordingly.

Our intentions were not to alienate anybody. Since we sent the e-mail out, every support ticket regarding this has been filled with smiley faces that they can switch to a lower price without impacting their service. Clients love saving money without sacrificing anything and that was our goal. Nothing is set in stone, we can adjust our prices and plans as we see fit and are welcome to feedback of all kinds. If you think the bandwidth is not enough for your needs you're welcome to contact us for special pricing, but for our thousands of current clients, less than 20 of them would have been impacted by this change and the rest would save money without having to adjust their usage.

Please also take note that we are trying to work out our costs for addons (disk space, IPs, and bandwidth) so we are welcome to feedback here also. Maybe we can turn our plans into a "build you own" or "buy what you need" type of setup where the base plan comes with XGB and you can add more as needed.

Lastly, we are currently implementing a new backup solution in Denver that we will be deploying to all locations once the new hard drives arrive which we didn't discuss anywhere else but has some of an impact on bandwidth also so I figured I'd mention it here. Right now our Denver OpenVZ node is taking 6 backups per day (ever 4 hours) and is storing the last 6 4-hour backups, last 7 daily backups, last 4 weekly backups, and last 2 monthly backups which will be off-site backups once we have more backup servers to deploy.Just throwing that out there also.

 

[vanarp]

@KuJoe Appreciate the transparency.

 

[KuJoe]

I have increased the bandwidth a bit so now the smallest amount will be 100GB with the largest amount being 1TB. Hopefully this will calm some nerves a bit.

 

[concerto49]

It's quite interesting actually. Even though they don't use it, a lot keep complaining about low bandwidth plans.

 

[peterw]

Our contract in Tampa is up next year so we'll be able to negotiate either better bandwidth prices or find a new data center if it came down to it and when that happens we will adjust our plans accordingly.

If you close Tampa you will loose a lot of customers that need a good connection to Brazil and South America. They will all move to Jacksonville.

@KuJoe Appreciate the transparency.

Appreciated it too. Enough time to plan for alternatives in case of DC change.

 

[KuJoe]

If you close Tampa you will loose a lot of customers that need a good connection to Brazil and South America. They will all move to Jacksonville.

Appreciated it too. Enough time to plan for alternatives in case of DC change.

I agree 100%. A lot of our clients in Tampa sign up because we are located in Tampa and we have no intention of leaving E Solutions unless we are forced out. There aren't very many options in Tampa though so hopefully we can get things worked out and hopefully the bandwidth changes won't cause people to flee in fear because they think we are hoarding bandwidth.

Right now I know of 3 affordable options for us in Tampa:

SagoNet - Would never subject clients to that kind of downtime and unprofessionalism.

Hivelovity - A 100Mbps commit is $8.99/Mbps and I have talked with techs there that have told me NOT to host with them if I value my clients.

E Solutions - Excellent network, excellent power, and their support is amazing. The price is on the higher side but hopefully this can be either negotiated next contract renewal or we can find ways to limit our bandwidth usage (i.e. like we did with the current plans).

@concerto49, I agree with this also. So far we've only had one complaint about the price/bandwidth drop but we've had quite a few tickets thanking us and asking for their current plans with 500GB of bandwidth to be switched over to the 50GB of bandwidth plans to keep their yearly invoices under $10 which we're happy to offer.

 

[peterw]

@concerto49, I agree with this also. So far we've only had one complaint about the price/bandwidth drop but we've had quite a few tickets thanking us and asking for their current plans with 500GB of bandwidth to be switched over to the 50GB of bandwidth plans to keep their yearly invoices under $10 which we're happy to offer.

I have compared your prices. Only the new O32 is $9.99 USD, which was $10.99/Year before.

Old O64

• 64MB RAM + vSwap
  
• 3GB RAID10 Disk Space
• 500GB Bandwidth @ 100Mbps
• 1 IPv4 + 4 IPv6
• $12.99/Year

New O64

• 64MB RAM + vSwap
  
• 3GB RAID10 Disk Space
• 100GB Bandwidth @ 100Mbps
• 1 IPv4 + 4 IPv6
• $11.99/Year

I would never switch to the new plans. 1$/year for 400GB traffic.

Because: Additional Bandwidth $1.50/month per 100GB. So 400GB would cost $6 per month or 72$ per year.

 

[KuJoe]

I would never switch to the new plans. 1$/year for 400GB traffic.

If you use more than 100GB of bandwidth then I would agree with you, switching to the new pricing is not worth it for you and would not suit your needs. But as I stated earlier, this change impacts less than 20 OpenVZ clients, this is less than 1% of our total clients. The other 99% are saving money without impacting their service at all.

 

[WSWD]

Any hosts in California that can provide some insight into this? According to my limited research it looks like we'll have to register as a foreign company for $800/year.

Technically, and what a lot of people (particularly in this industry) fail to understand, is that if you do any business in California (i.e. sell hosting to clients in California), you are "required" to register as a foreign corporation and pay the $800. How many companies actually do this? I don't know. If you aren't a WalMart or Amazon or other large company, you'll probably slip under the radar, as I imagine it is incredibly difficult to enforce.  The 3rd one below is really the one that concerns you regarding server equipment:


For taxable years beginning on or after 1/1/2011, a taxpayer is doing business in California if it actively engages in any transaction for the purpose of financial or pecuniary gain or profit in California or if any of the following conditions are satisfied:

• The taxpayer is organized or commercially domiciled in California.
• Sales, as defined in subdivision (e) or (f) of R&TC 25120, of the taxpayer in California, including sales by the taxpayer’s agents and independent contractors, exceed the lesser of $500,000 [1] or 25 percent of the taxpayer's total sales. For purposes of R&TC Section 23101, sales in this state shall be determined using the rules for assigning sales under R&TC 25135, R&TC 25136( B) and the regulations thereunder, as modified by regulations under Section 25137.
• Real and tangible personal property of the taxpayer in California exceed the lesser of $50,000[1] or 25 percent of the taxpayer's total real and tangible personal property.
• The amount paid in California by the taxpayer for compensation, as defined in subdivision © of R&TC 25120, exceeds the lesser of $50,000[1] or 25 percent of the total compensation paid by the taxpayer.
• For the conditions above, the sales, property, and payroll of the taxpayer include the taxpayer's pro rata or distributive share of pass-through entities. "Pass-through entities" means a partnership, an LLC treated as a partnership, or an "S" corporation.