[Thelen]

Will the new "infrastructure" pricing apply only to new servers purchased in 2013, or only to the 2011/2012 servers with per TB limits? Or will my existing unmetered servers be subject to this?

These seem to be conflicting, how can you say it had no impact on sales and then in the very next sentence you say you got many clients that chose OVH because of it.


While some companies do charge 12-15 EUR, those are premium providers. Companies more similar to OVH (in pricing, bandwidth quality and server specs) such as hetzner charge 6 EUR.

I think its unfortunate that the price increased, but I still think OVH's per TB price is fair compared to other competitors and I can live with it, but please do not bring in infrastructures. Your customers should not be punished for their success.

No impact on sales to *normal* customers. IE the ones that won't even use up all the bandwidth let alone purchase thousands of extra TB.

I don't know why you think providers who charge 12-15 euro are premium, they are barely midrange. Premium providers charge at least $60USD/TB, most are still above $100/TB. EG AWS, rackspace, Akamai etc.

I don't mind infrastructure as it makes management a heap easier, I don't think any of the seedbox companies will have a problem with 40GBps limit, the question is whether it will impact all the older servers.

[3r1c]

The fact that we offer additional traffic for such a low price had no impact on the amount of sales nor on the turnover expected from normal/individual clients. But from January 2012 we started getting more and more clients who've chosen OVH just because the price was £0.89 per TB.

These seem to be conflicting, how can you say it had no impact on sales and then in the very next sentence you say you got many clients that chose OVH because of it.

This has also resulted from erroneous calculation of TB, due to the routers we're using. Cisco routers have turned to be not suitable for NetFlow and finding the bandwidth usage statistics. So, thanks to this bug, some clients consuming too much traffic find “0” in the monthly statistics in terms of TB.

Maybe you should first fix this bug, if the very high users actually had to pay for their bandwidth OVH could make money from them instead of punishing everybody with the infrastructures.

We think that the proof of concept has been completed and we will rebalance the pricing. Where our competitors offer 12-15 EUR per TB we will offer £3.99 per TB instead of £0.89 per TB. The price is changing now.

While some companies do charge 12-15 EUR, those are premium providers. Companies more similar to OVH (in pricing, bandwidth quality and server specs) such as hetzner charge 6 EUR.

I think its unfortunate that the price increased, but I still think OVH's per TB price is fair compared to other competitors and I can live with it, but please do not bring in infrastructures. Your customers should not be punished for their success.

[3r1c]

I still have many servers from the 2010/2011 SP series with unmetered "low priority" traffic and no TB limits.
I am very happy now I did not replace these servers with the new kimsufi's as I have been planning for the last few months but never got around to it.

Will the new "infrastructure" pricing apply only to new servers purchased in 2013, or only to the 2011/2012 servers with per TB limits? Or will my existing unmetered servers be subject to this?

Every datacenter I have worked with, like leaseweb actually offer discounts to resellers and large customers, OVH seems to be the only one that punishes them.
This infrastructure limits is created to kill the ovh reseller business, but why to OVH hate resellers so much?
OVH will make the same money, and have the same bandwidth used, regardless of whether an end user buys directly from OVH or from a reseller, so why do they care? its the same server using the same bandwidth and paying the same price.
Resellers only increase the sales of OVH servers, they are like free advertising for OVH.

[Thelen]

No other provider offers 10Gbps 'guaranteed' bandwidth from their public website either.

Go on, go talk to Leaseweb. Ask them what 4 racks with 10Gbps each costs, without even any servers. Then add 20xHG servers to each, ask em the monthly for those. I can tell you now they will charge a lot more :P

[Andy]

To my knowledge no other provider works on this "infrastructure" method so it makes no sense and only serves to cause confusion...

[Thelen]

$1.22/Mbps for a 40Gbps commit is actually quite bad. A number of Tier 2 or even Tier 1 carriers could easily beat that price. Cogent, Hurricane Electric, Atrato IP Networks, NLayer, and probably even Telia or Inteliquent.

In raw BW terms yes, but not when you consider other costs. Costs for running and setup of the AS, rack space, hardware etc etc. Considering the X number of servers that will use the 40Gbps, and the fact you can grow up to that, it'd be very difficult and not much in it either way to do it at another provider. Anyway, when you consider the impact/benefit of internal traffic, that cost easily halves if not down to 20-30%.

Argh! Just now seeing this. I can't believe you're considering going back to that pooling scheme! Andy summed up pretty much what else I'd have to say about it... I don't think its a good move.

Makes it a lot easier to manage lots of servers, especially if you have ones that you might only want a few extra TB/month, makes the management of it heaps easier. Especially for resellers.

[Myatu]

Argh! Just now seeing this. I can't believe you're considering going back to that pooling scheme! Andy summed up pretty much what else I'd have to say about it... I don't think its a good move.

[virtuallynathan]

$1.22/Mbps for a 40Gbps commit is actually quite bad. A number of Tier 2 or even Tier 1 carriers could easily beat that price. Cogent, Hurricane Electric, Atrato IP Networks, NLayer, and probably even Telia or Inteliquent.

[Thelen]

With the infrastructure change I can see many people getting multiple NIC handles again to get around the infrastructure limits, and they might not be easy to find if people are desperate for it to work for them.

People are still doing it, and unfortunately due to OVH selling to people from poor countries like India, the market is flooded with people abusing OVH's bandwidth.

marks, how about at least giving the option to buy more bandwidth for those who are in that sort of market? You're a data center and server provider, you can't not give people bandwidth! Bandwidth is the whole heart of the service, without it the servers are useless.

If you at least offer it, people will buy it.

They are? Up to 40Gbps per NIC handle, at prices that decimates equal quality global networks let alone regional networks. Seriously, 40Gbps for 30k GBP, that is .75GBP/mbps or 2.25GBP/TB, orders of magnitude lower than 90% of server providers (who charge between 60 and $120/TB), and very competitive in the budget/reseller markets.

[Thelen]

Increasing the price x4.5 isn't illegal. It isn't actually that high, it is only 1.8x from the old per TB to the new up-to-40Gbps SLA stuff.

I find it hard to believe you've found someone that can beat OVHs old .9GBP/TB pricing, let alone offering it on a couple racks worth of servers, and unless something has changed in the past couple months even leaseweb is still not selling 10Gbps servers publicly.

Anyway, the setup fees on the OVH servers are actually tiny compared to bandwidth price if you were actually to use the levels of bandwidth they are capable of, OVH (in fact no current server provider) just isn't in the market. I mean really, just your feral servers could in theory double OVH's current network usage, perhaps not in practice, but in practice in any other DC apart from maybe LW you'd be paying at least 3GBP/TB for the potential alone let alone usage.

[_Lemon_]

It's true that the main reason for this change are these type of customers.

Thank you for your honesty.

It would be great if we had some personal communication prior to the tirade of the forums. I believe right now the biggest problem OVH has is lack of communication let alone the price; I'm not sure how anyone can depend on OVH when one day I'll wake up and the price has been increased x4.5 (heck, is that even legal?).

I'm sure that, even with these changes, the OVH servers will be still very competitive

I have yet to really go over the numbers but with the set up fee in place for HG XL servers, I can guarantee that they are not going to be even close to competitive. Right now it might work out because the set up fees are a sunk cost so they're not factored in, however with the large cost of bandwidth it will be easy for anyone else to beat.

Multiple competitors have offered, or come very close to, prices that beat the old cost of OVH bandwidth / hardware for the HG XL servers. So it is a possibility -- at this point I flat out can't buy any more servers with OVH.


Perhaps a better strategy would be to work with larger customers on a one-to-one basis and work out custom sales deals with them? It might be a way to lower costs for yourself and fit the best solution for the customer.

[Andy]

marks, how about at least giving the option to buy more bandwidth for those who are in that sort of market? You're a data center and server provider, you can't not give people bandwidth! Bandwidth is the whole heart of the service, without it the servers are useless.

If you at least offer it, people will buy it.

[marks]

It's almost as if they're trying to get rid of larger bandwidth customers.

It's true that the main reason for this change are these type of customers.

I agree with you that this new proposed system of bandwidth management is focusing more on customers with finite projects, not reseller, which accounts can grow with no limit. I have already passed on your comments to consider this special situation when it comes to the new bandwidth regime. Of course, all your feedback is very welcome, though as Thelen says, at the end of the day it has to work for OVH.

I'm sure that, even with these changes, the OVH servers will be still very competitive

[Andy]

It's not like OVH isn't making money. They've opened 4 new data centres in the last few years and you're saying they're not making anything/enough? OVH has a model that works very well, it's why they've been so successful, but if they're too lax on their model in a few years time they won't be competitive and will have lost out on a lot of profit. There has to be a balance. They could set their prices so they break even and be the best priced server company ever, but they want to grow so they don't do that. If they keep prices too low, they'll lose out so they need to make changes.

OVH however unlike other companies do this often to keep their services in line with the industry. It's sad that they pass these cost changes onto the customer so drastically but it's how OVH has always been. Look at the bright side though, bandwidth is still fairly cheap compared to competitors even given the recent proposed price change. I just wish OVH would stick to the traffic model that works so well in the UK.

With the infrastructure change I can see many people getting multiple NIC handles again to get around the infrastructure limits, and they might not be easy to find if people are desperate for it to work for them.

[Thelen]

It's almost as if they're [i">trying[/i] to get rid of larger bandwidth customers.

If they aren't making any/much money from them, makes sense to me.

@OVH Why would the larger bandwidth customers return if you so freely do this to them? Are you aware that if we do move to Leaseweb / elsewhere we're going to be locked into 1+ year contracts? What's the real deal behind all this?

Maybe they are a business trying to make money? I mean seriously, OVH has basically been at the forefront of cheap since its inception, and they've basically taken a hammering the whole time. It is just getting even more volatile now since they don't charge setups (really), and only offer 1 month contract.

Anyway, I do agree that it is very inconvenient, and perhaps not suited to 'shady' companies like seedbox providers who have no long-term guarantees, but at the end of the day, that isn't their problem. They are not taking away something we must have, they are simply stopping allowing us to do things we'd like beyond the base.

Honestly the only problem I have with all these changes is the grandfathering. It can make new competitors difficult to maintain the same pricing/margins if they cannot get the damn good deals they used to.

[Tz-OVH]

Why not give users the option to go with what works for them?

I like that right now I know exactly how much traffic my server(s) come with, upfront.

[_Lemon_]

@_Lemon_, Exactly. It's a step backwards not forwards.

Sure for single or two server customers this deal would probably work out better, but for anyone with more than 2 they're going to be screwed. If it's anything like it was before you won't be able to buy extra bandwidth either, you'll be stuck with the same 100Mbps until you hit 10 servers, then you get 10Mbps more per extra server you buy up to a maximum of XXXMbps.

I can see why OVH would want to do this for customers with 1-2 servers. They see the "unlimited", they can see that they can use what they want realistically without having to worry about it. The "mass infrastructure" works out well for them but prevents larger customers for just getting a free ride.

Each server should have it's own bandwidth, it shouldn't be pooled. If OVH can't afford to offer 100Mbps per server then they shouldn't be offering 1Gbps or even 10Gbps. Hell, wasn't there talk of 40Gbps too? If you can't offer even a fraction of that then you have no chance at offering 40Gbps..

I believe the offering of 40 Gbps was the precursor to this, however it's strange to radically increase the price of bandwidth before getting the larger bandwidth in place: http://forum.ovh.co.uk/showthread.php?t=6229

It's almost as if they're trying to get rid of larger bandwidth customers.

@OVH Why would the larger bandwidth customers return if you so freely do this to them? Are you aware that if we do move to Leaseweb / elsewhere we're going to be locked into 1+ year contracts? What's the real deal behind all this?

Please don't turn into Virgin Media offering XXXMbps broadband but then throttling your use of it. If you can't sustain an offer when people want to use it, THEN DON'T OFFER IT. Simple.

Oh god... Virgin Media, I moved house and I'm stuck with them My phone with 3 offers better Internet!

[Andy]

@_Lemon_, Exactly. It's a step backwards not forwards.

Sure for single or two server customers this deal would probably work out better, but for anyone with more than 2 they're going to be screwed. If it's anything like it was before you won't be able to buy extra bandwidth either, you'll be stuck with the same 100Mbps until you hit 10 servers, then you get 10Mbps more per extra server you buy up to a maximum of XXXMbps.

Obviously it's never occurred to OVH that some people might actually need to use bandwidth. For example they might use it as a very heavily used file exchange server using dozens of TB's a month by someone's hundreds of clients. As they get more clients, they need more servers, thus more bandwidth and so on. If they can have more servers but not more bandwidth then their product is dead in the water.

Each server should have it's own bandwidth, it shouldn't be pooled. If OVH can't afford to offer 100Mbps per server then they shouldn't be offering 1Gbps or even 10Gbps. Hell, wasn't there talk of 40Gbps too? If you can't offer even a fraction of that then you have no chance at offering 40Gbps.

If you let people pay for bandwidth they need then they will do so, but having a model that doesn't allow it is just shooting yourself in the foot and making it harder for people to expand their own services/businesses.

Please don't turn into Virgin Media offering XXXMbps broadband but then throttling your use of it. If you can't sustain an offer when people want to use it, THEN DON'T OFFER IT. Simple.

[_Lemon_]

Here's the cost per Mbps now: http://www.wolframalpha.com/input/?i...+Mbps+%2Fmonth

That's £1.31 per Mbps.

To put this in perspective: two years ago Leaseweb offered the HG XL for less per month and then bandwidth at 1 EUR per Mbps.

From what I remember, last month you were touting the arrival of 100 Gbps connections and all was rosy. What went wrong? Presumably those a lot of bandwidth are your larger customers, why are you not speaking to them? Why are you not asking what they want?

[K.Kode]

I see a surge in sales at Leaseweb / server.lu coming pretty soon, 10Mbs per server makes my custom at OVH pretty much untenable.

[yonatan]

Also remember that Oles said previously French users consume bandwidth differently to UK users, etc. That also has to be taken into account.

OVH has a huge network, I don't see why bandwidth is always such an issue. You're always finding ways to make us use less with various limits.

maybe it makes sense to run an overquota server for some people... not for me.

I don't see how one server can pull that much traffic to pass the limitation, that's insane.
if i had more traffic consumption then the plan base , i simply bump in another server into the cluster mix... , what would the end clients of an overquota server feel when they visit the web page? .. a hard working traffic pushing server is a bad end client experience in most cases, i see no point in "unlimited".

[Andy]

Also remember that Oles said previously French users consume bandwidth differently to UK users, etc. That also has to be taken into account.

OVH has a huge network, I don't see why bandwidth is always such an issue. You're always finding ways to make us use less with various limits.

[yonatan]

the exact details are not final yet, but yes, there won't be a traffic limit like now (SP Mini 2012 is 10TB at the moment).

You'll have a max average bandwidth per server, and then per infrastructure (numbers still to be worked out exactly). Overall, the traffic per server will be generally better on average, but it will obviously limit the high traffic spenders (the ones that use to buy large amounts of extra traffic).

Let us know your view so far. More details to come in the following weeks and few months.

I personally Do not like this approach, It's better to know upfront you have X amount of traffic per server, it helps plan ahead your projects with confidence.

from my point of view, in case we have an SP server which consumed more than 5TB, it's smarter to upgrade to an EG with 10TB instead of adding traffic.

but now, when it's " max average bandwidth " the bottom line should be clear.
what is considered " large amounts of extra traffic " from OVH standpoint?

15TB +?
30TB +?

how can a client plan ahead his expenses without knowing the price factor upfront?

[Andy]

There goes people with multiple servers then. Some people might use 10TB per server and that's what the server comes with. If you then say for example 100Mbps per infrastructure then if they have 10 servers each using 10TB that would no longer work for them.

I thought we were moving away from this "infrastructure" crap, but obviously I was wrong... Just think of the people who resell servers. This won't work for them.

[marks]

So what you're saying is that if I get an SP Mini 2013 (for example), you'll not say 100mbps with 5TB limit?

the exact details are not final yet, but yes, there won't be a traffic limit like now (SP Mini 2012 is 10TB at the moment).

You'll have a max average bandwidth per server, and then per infrastructure (numbers still to be worked out exactly). Overall, the traffic per server will be generally better on average, but it will obviously limit the high traffic spenders (the ones that use to buy large amounts of extra traffic).

Let us know your view so far. More details to come in the following weeks and few months.

[Tz-OVH]

So what you're saying is that if I get an SP Mini 2013 (for example), you'll not say 100mbps with 5TB limit?

[oles@ovh.net]

Hello,

For a few months we've been testing the commercial impact that unusually low prices of additional traffic (per TB) had on dedicated servers in our subsidiaries. We changed the price to £0.89, we then wanted to see if that had any influence on sales.

The result:
The fact that we offer additional traffic for such a low price had no impact on the amount of sales nor on the turnover expected from normal/individual clients. But from January 2012 we started getting more and more clients who've chosen OVH just because the price was £0.89 per TB. This has also resulted from erroneous calculation of TB, due to the routers we're using. Cisco routers have turned to be not suitable for NetFlow and finding the bandwidth usage statistics. So, thanks to this bug, some clients consuming too much traffic find “0” in the monthly statistics in terms of TB. It was enough to produce the black hole effect absorbing the market of dedicated servers. Our global bandwidth has increased from 300 Gbps in September 2011 to 800 Gbps in September 2012!

We think that the proof of concept has been completed and we will rebalance the pricing. Where our competitors offer 12-15 EUR per TB we will offer £3.99 per TB instead of £0.89 per TB. The price is changing now.

At the same time, we are working with Cisco to fix these bugs in order to obtain true data relating to the consumption of our clients. And why not (finally) some statistics per AS to make nice graphics for each server and to see how much bandwidth it consumes, and to what destination network.

Within the 2013 range, on the level of subsidiaries, we will not be offering dedicated servers with TB but only with the guaranteed bandwidth for each server. Like in France, this will allow us to offer dedicated servers with high-quality bandwidth for a very low price. Also, to be different on the market and add value to our network. In fact, the OVH network again proves itself being capable of delivering large quantities of quality data and assuring a very important growth.

Regards,
Octave