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Brett,
On an informational note I wanted to let you know that you're not right on your assumption of bandwidth price at that amount of purchase. You have to remember the law of diminishing returns, that even though you might get $50/mbit pricing for buying 5...10...20..50, whatever it might be... that once you dip below that level you're only looking at token discounts. The only carrier in the country selling for $30/mbit is Cogent, period. Unless you're someone buying multiple gigabit connections from the SAME upstream provider, nobody is paying $30/mbit. As a point of reference, you'd be lucky to get a 100 meg handoff from Level3 for $50-$60/mbit.
At higher purchasing beyond 100 megabit, sure you might get in the 40's, if you're good. Beyond that you're looking at relatively small decreases until the carrier just makes you buy a straight up gigabit. Even if a carrier did give you a gigabit pipe for something like $30,000 a month you couldn't push 1000 megabit through it. That means that your cost, even in that instance, would be higher than $30/mbit.
RK's point about power is WELL noted. People, realize that a 20 amp circuit, of which you only want to load up to 15-16 amps, is $200-$600 everywhere in the country. Only on rare occasions does power get cheaper and that's usually when someone is selling you something else to make their margin on, like bandwidth or space.
Space costs are high. I'm just outside of Detroit, so not even in Chigago or New York which are admittedly even higher rent, and I pay $250 per square foot. Sure, you get to rack vertically, but let's start adding up the costs.
Want to be well routed and switched? That is going to require tens of thousands of dollars in gear. Where do you think the money comes from? See how fucking stupid it is for someone to tell you that for $350/mo you should be getting a $2000 server, bandwidth that is costing $400-$500 (if you actually used it all), in addition to labor, space, power and incidentals. Fuck, think of what it costs to give a whole staff cell phones, health insurance, payroll tax matching.
There's so much bullshit being put out there by other hosting companies and the minions they send to the boards, everyone needs to wake up and smell the coffee. There's no magic bullet, no pixie dust. There are more hard costs to this business then you can imagine and that's why quality costs. Hosting companies come and go all the time, watch and you'll see it's always the ones with the unbelievable specials. LOL
That's just a small rant, I can feel a big one coming on soon!
Brad
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President at MojoHost | brad at mojohost dot com | Skype MojoHostBrad
71 industry awards for hosting and professional excellence since 1999
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