It’s not really based on when they came out, but rather when the drives being installed were bought. There’s relatively little demand for 4TB Drives, so most (if not all) of the drives we have bought are in use. This means that if someone orders them, we have to buy new drives. Obviously they’re definitely cheaper than they were when they came out, but we still have to pay for them.
I can’t rent a $150 drive for $5/mo. Otherwise, they would rarely if ever make their cost back, let alone bring in a profit.
There are things we must do to remain in business and provide reliable service and support. Taking a loss on each piece of hardware is just bad business and anyone doing that is on a path to self destruct. This is one of the reasons why hosts fail with relative frequency.
That does make some sense, thanks for explaining that. I just feels like dedicated hosting is 80% a rip off vs. colocating myself. In respect to older hardware based on my limited observations.
I guess the moral of this is once you add the servicing to it that’s what really drives up costs. So that $150 “drive” is really more like $250+ once you gotta pay a professional to install it, service it as needed, partitioning it, etc etc etc.
It’s all in what leverage(s) one can pull off. With each of their owns.
Well colocating yourself you’re paying hundreds of not thousands upfront. You can buy the cheapest used drives off eBay you can find and if you’re renting a server no real company does that. Renting servers has clear purposes.
Many providers do offer one-time payment for hardware, though that does not mean you “own” it. That limits your long term expenses and makes it more colo-like while still retaining benefits from a rented server. But like all businesses, hosting companies do need to make a profit somehow.
Hosting customers have been somewhat spoiled over the years because many aspects of hosting are oversold, giving the illusion of low costs. However, costs are not as low as everyone thinks, and as I mentioned above, this is also why many hosting companies fail. They oversell themselves out of business.
Many people ask for one-time payments, buy-downs, or some variant of this, and then when they see the cost, they don’t follow through. The vast majority of customers opt for the monthly rental option.
That hasn’t been true in our experience. While some people do walk away when they see a setup fee, at least 60-70% of our servers are sold with one time fees. Once a customer has an established trusting relationship with a provider, and understanding their business model, it doesn’t actually make sense to pay full monthly fees. Many of our servers are rented for 5+ years. Our one-time fees pay for themselves in 8-10 months. So that’s 4+ years of savings.
But yes, of course it doesn’t work for people expecting to rent a server just for a few months. That’s a very small portion of our business. I assume our business is rather typical, so I’d expect this to be true with most providers.
It was in reference to 4TB increasing the cost of the servers by a lot. If a 4TB drive is $150 and a 10TB drive is $250, that makes 10TB drives sound better.
I think they are asking is could we get larger drives at a cheaper per TB price mark? EG…
If a 4TB is $25/each/month could we get larger drive(s) that decrease the cost of $6.25/raw TB capacity per month?
Another possibility: delete both 1tb drives and just have 1x4TB. However, while these are good offers, I think I’d stay with my BHS Kimsufi for now, given 1 drive and 100 mbps. These servers are in Dallas, right? I’m somewhat holding out for west coast.
The cost per TB would indeed be lower. The cost for adding the drive are strictly based on the cost of the drive, so while upgrading a 4TB HDD adds $15/mo, adding a 12TB would add $25.
Removing the 1TB HDDs doesn’t really save anything since those are relatively old drives so we’re essentially including them for free.