The Alpha Red thread, a *MUST* read.

[Brad Mitchell]

Hello everyone-

I'll keep this short and sweet. I'm not here to troll for business. I have less interest in absorbing Alpha Red customers than anyone else does. We run things our way, quality is first, and we have been in a constant state of "busy" for the last 6+ years. We have a waiting list for turn-ups, quotes and if the best we can do while maintaining our level of quality is double the business every 12 months we are OK with that track record and go-forward.... that being said, here goes:

I wish Alpha Red's customers, employees and it's owner James, a tremendous amount of luck. Nothing would make me happier than to see James come online and set things straight, reassure his customers and tell hosts that their innuendos are inaccurate.

I can't say what I want to say or share any information that I may have because my lawyer has advised me against this.

It is my professional opinion that all Alpha Red customers should seek new hosting immediately.



Now, off of Alpha Red and on to the market at large.



What I can say with confidence and without hesitation is basically if you "need" to buy bandwidth at $3-$6/megabit to be profitable then you're fucked for now. Hundreds have built a business upon costs which don't truly exist in the marketplace. Because a few companies have retailed at these rates successfully for some amount of time there is now a completely inaccurate perception of reality.

You don't know because it's not your job to, you're not a host. What you *think* you know about peering and wholesale rates is entirely incorrect, this even applies to some of my host competitors.

You may choose to believe that this range of retail rate for server, bandwidth, support or even just raw bandwidth is sustainable. It is not, it is completely below cost for even the largest buyers of bandwidth in the marketplace. What you see or have seen in the marketplace is a complete pharse. It would be comical if now so many people weren't going to be affected now or at some other imminent point in the future.

What you choose to do for your business is your choice and I wish each of you luck. Take your hate somewhere else please - your expectations have been set improperly, this is your wake up call. I advise that you go work your business and take into consideration what I have shared.

Sincerely,

Brad

[Iron Fist]

Yet another AlphaRed thread... I think CCBILL Cavecreek sucked this one dry long ago..

[Drake]

Can always count on Brad for a candid assessment. Great read.

[Klen]

Ha ha i know it you wont be able to resist open your own thread.

[Brad Mitchell]

Originally Posted by KlenTelaris

Ha ha i know it you wont be able to resist open your own thread.

Klen,

I just laugh every time you try to stir something with me because as far as RedLight District goes, the banner thats always in your signature, their happiest day ever was the day they went live at MojoHost.

This is just another post of mine that you haven't actually read the content of.

Best Wishes,

Brad

[milan]

Originally Posted by KlenTelaris

Ha ha i know it you wont be able to resist open your own thread.

LOL I was waiting on that.

Brad you rule!

[pocketkangaroo]

I never understood why people would deal with shady companies like this. Companies that would host anything you can imagine. Why would any legit business risk it? Is saving a couple bucks a month really worth it?

[txl]

Thanks Brad, amazing read.


DaveA
Choopa, LLC
President
Icq: 400383
http://www.choopa.com

[milan]

Originally Posted by pocketkangaroo

I never understood why people would deal with shady companies like this. Companies that would host anything you can imagine. Why would any legit business risk it? Is saving a couple bucks a month really worth it?

why people say shady?? what was shady in your eyes that everyone could have seen? there are still sub $5 companies out there making good $$ (not our biz model) are they shady??

it "appeared" that James did some other things outside AR are effecting the company, that is it

[Pete-KT]

Brad,

We are very happy to be part of the Mojohost family

[Techie Media]

Good read Brad, at the same time you were typing so was I in cazas thread http://www.gofuckyourself.com/showthread.php?t=859415 We basically have the same theory oon cheap hosting, I quess that is one of the reasons I love you...hehe

[TidalWave]

thread #41231

[txl]

The only place for qualuty[sic] hosting is with techiemedia.

[g$$$]

Good read Brad!

Nice meeting you in amsterdam!

[Brad Mitchell]

Originally Posted by milan

why people say shady?? what was shady in your eyes that everyone could have seen? there are still sub $5 companies out there making good $$ (not our biz model) are they shady??

it "appeared" that James did some other things outside AR are effecting the company, that is it

I guess I would say to your first part no, absolutely there are not. There is NO company that can sell sub $5 and maintain profitability (carriers excluded, well sort of, as none of those are either).

To the second part, no again. That which is public knowledge is not "it" but only one small part of what is transpiring at AR.

Brad

[milan]

Originally Posted by Brad Mitchell

I guess I would say to your first part no, absolutely there are not. There is NO company that can sell sub $5 and maintain profitability (carriers excluded, well sort of, as none of those are either).

To the second part, no again. That which is public knowledge is not "it" but only one small part of what is transpiring at AR.

Brad

first part or second part not sure... you confused me

As far as sub $5 a mb, why don't you tell that to Choopa? he is in your thread and I know he is selling at the same rates as AR. so you want to tell us and him he is not profitable and not going to be? this is kind of harsh.

[Brad Mitchell]

I stand by everything I've said.

If anybody wants to disagree, they are welcome, this is a public forum.

Any host that wants to fundamentally disagree with what I am saying had best be ready to get into a real world hosting economics debate premised on the notion that they can sell "all day long" at such rates while maintaining staff, datacenter, servers, profitability and client experience. They will be called out on their actual costs but not on the supplier names for which that they are contractually bound to not divulge their deals.

This has gone on long enough - bring it.


Brad

[pocketkangaroo]

Originally Posted by milan

why people say shady?? what was shady in your eyes that everyone could have seen? there are still sub $5 companies out there making good $$ (not our biz model) are they shady??

it "appeared" that James did some other things outside AR are effecting the company, that is it

I'm not saying shady as in price, but just their reputation. A simple Google search shows the kind of reputation they have, and the kind of stuff they host.

[Mutt]

looks like CCBILL/Cavecreek has bought Alphared

[Brad Mitchell]

If Ron is buying Alpha Red then everyone just lucked out! This is excellent news for AR customers and employees. If they're able to complete the acquisition successfully I have no doubt everyone's concerns will be resolved.



Brad

[dubsix]

Originally Posted by Brad Mitchell

If Ron is buying Alpha Red then everyone just lucked out! This is excellent news for AR customers and employees. If they're able to complete the acquisition successfully I have no doubt everyone's concerns will be resolved.



Brad

Brad,

My guess it's more along the lines that CWIE knew that AlphaRed is failing. CWIE owns/has a stake in BandCon which was AlphaRed's primary network provider thus if alphared tanked they'd lose a major client. If they could pick up the ASSETS of AR in a fire sale it was in their best interest to protect what they could of their revenue stream

AR Selecting Bandcon:
http://www.send2press.com/newswire/2...0208-001.shtml

[milan]

Originally Posted by WireSix-Ryan

Brad,

My guess it's more along the lines that CWIE knew that AlphaRed is failing. CWIE owns/has a stake in BandCon which was AlphaRed's primary network provider thus if alphared tanked they'd lose a major client. If they could pick up the ASSETS of AR in a fire sale it was in their best interest to protect what they could of their revenue stream

you are getting smarter and smarter aren't you... open for a job opportunity

[Snake Doctor]

I don't want to get into it with Brad, but I can't resist putting my 2 cents in here.

You guys (expensive hosts) were saying the same thing about cogent hosts years ago when they were selling for $30 a meg....."it's below cost, they'll go out of business, etc etc"

Sure some of them went out of business, so did some hosts who charged 3 times as much too....but the fact is the bandwidth market changed and eventually people like you had to follow suit.
There was prediction after prediction from all of the "experts" in hosting that once cogent and the hosts using cogent went bankrupt that prices would go back to the $75-100 per meg level.
Guess what? Now mojohost is selling bandwidth for $15 per meg......and go figure, that price happens to be roughly 2-3 times the price that some other places are charging....places that you say are going to go out of business because their model is unsustainable and they're selling below cost.......basically the exact same thing you were saying 3 years ago about the guys charging $30 per meg.
Forgive me if I don't hold my breath and wait for your predictions to come true.

I'm sure your customers are happy with the service you provide and feel that your prices are well worth what you charge, and that's great, that's the way it should be, but that doesn't give you the right to come bash the people who are underselling you.

Alphared's current problems have nothing to do with their prices or business model, they're because of a lawsuit.

Now, for my contribution to the thread, I recommend everyone (even mojohost customers)get an offsite backup from a place like http://www.bettercgi.com/clonebox/ .
A hot spare server costs $24/mo for 200GB, with additional storage at 12 cents per GB.

Having backups with your host is fine and recommended, but they don't do you much good if your host goes under, has a fire/flood, etc.

FWIW I'm not affiliated with Clonebox, I just think it's a cool service and apropos to mention it here.

[Snake Doctor]

Originally Posted by Brad Mitchell

I stand by everything I've said.

If anybody wants to disagree, they are welcome, this is a public forum.

Any host that wants to fundamentally disagree with what I am saying had best be ready to get into a real world hosting economics debate premised on the notion that they can sell "all day long" at such rates while maintaining staff, datacenter, servers, profitability and client experience. They will be called out on their actual costs but not on the supplier names for which that they are contractually bound to not divulge their deals.

This has gone on long enough - bring it.


Brad

Ok, bringing it.

Two examples for you here.

1) Webair has a standing offer to meet or beat any hosting offer. When companies like alphared and choopa started selling sub $5/mbit bandwidth, Webair didn't rescind this standing offer.
By logic one can assume that webair has customers hosted for those same prices....and probably picked some up today with people running scared from alphared.

2) Cavecreek recently offered to meet or beat any price for hosting, and to do so with their CDN, and they did this knowing there are alot of customers out there paying $5 or so per meg.

So unless you're willing to come out here and say that Webair and Cavecreek don't know what they're doing, or that they're somehow inferior to mojohost in terms of "staff, datacenter, servers, profitability and client experience", then this conversation is over.

[Moose]

Originally Posted by Snake Doctor

I don't want to get into it with Brad, but I can't resist putting my 2 cents in here.

You guys (expensive hosts) were saying the same thing about cogent hosts years ago when they were selling for $30 a meg....."it's below cost, they'll go out of business, etc etc"

Sure some of them went out of business, so did some hosts who charged 3 times as much too....but the fact is the bandwidth market changed and eventually people like you had to follow suit.
There was prediction after prediction from all of the "experts" in hosting that once cogent and the hosts using cogent went bankrupt that prices would go back to the $75-100 per meg level.
Guess what? Now mojohost is selling bandwidth for $15 per meg......and go figure, that price happens to be roughly 2-3 times the price that some other places are charging....places that you say are going to go out of business because their model is unsustainable and they're selling below cost.......basically the exact same thing you were saying 3 years ago about the guys charging $30 per meg.
Forgive me if I don't hold my breath and wait for your predictions to come true.

I'm sure your customers are happy with the service you provide and feel that your prices are well worth what you charge, and that's great, that's the way it should be, but that doesn't give you the right to come bash the people who are underselling you.

Alphared's current problems have nothing to do with their prices or business model, they're because of a lawsuit.

Lenny, hate to say it but you are way off on this one.Brad does know what he is talking about here. Like Brad I won't say anymore. Either way this is all now pointless. The AlphaRed bailout bill has been passed and signed!

[Ycaza]

Just sayin hi, and if we are all truthful, I am glad to see them go, its impossible to compete with them and offer good service.

[Snake Doctor]

Originally Posted by Moose

Lenny, hate to say it but you are way off on this one.Brad does know what he is talking about here. Like Brad I won't say anymore. Either way this is all now pointless. The AlphaRed bailout bill has been passed and signed!

Well Moose since you are a host that charges prices similar to Brad's, I wouldn't expect you to say any different.

I imagine Jim from Techie will be along shortly to bust my chops as well.

I like you and Jim, I really do. I don't know Brad personally but he seems like a pretty good guy.....but this isn't personal and I'm not trying to be a dick.....it's just that the more expensive hosts have been crying foul for years and years now about how these cheaper hosts are just a temporary thing and prices are going to rebound.....but they've done nothing but drop like a rock over the years.

What you're saying might be true, but it's also self-serving, so I'm going to take it with a 50lb bag of salt.

[Phil21]

Hehe... I love GFY hosting arguments. The wild speculation is awesome!

Both Brad and Snake Doctor make good points.

One thing to note though, I don't know anyone who was actually selling for $4-5/Mbit. They may exist, but at no real significant scale.

Selling a 100Mbit line for $400/mo *is absolutely not* selling for $4/meg. Not even close. Those hosts make their money on a sheer numbers game - if you have 100 of those $400/mo 100meg clients, only a small fraction will use the full pipe. In fact, the actual numbers skew towards *less* than 60% utilization as you get enough customers to become statistically relevant.

Guess what? That $4/meg just turned into $7-8/meg. Not great, but certainly much better than the marketing makes it look like If you are shady like a number of providers who sell at those rates are, you can make even more money by purposely selling substandard hardware or hardware configurations that cannot push that amount of bandwidth. Additionally, you can also run transit links at 99% utilization and further decrease your operating costs, without it being overtly obvious. Of course, you're also doing the other obvious things like putting stuff in cut-rate facilities, not staffing properly, etc. At this point, you're really into the $10/mbit+ territory. THESE type of hosts I believe are who Brad is targeting in his posts. Folks like Choopa who are selling close to these numbers, but doing so in a responsible manner due to their sheer scale (e.g. not cutting corners), I do not feel are a problem - just look at the actual offerings to see how it could work on the backend.

Also of note.. Pricing can and is used as a marketing tool. The price match guarantees are just that - marketing. The cost of acquiring a client in the competitive hosting market is extremely high - if you can gain one simply by price matching, that's in most cases rather cheap. Sure, you may take a loss on that client for a while until costs go down (server hardware paid for, bandwidth prices increase, the client's usage invariably will either go down - or go up which is just as well as you then sell at your standard rates), but you gain marketing mindshare getting your name out there, the good word of mouth from another client (assuming you don't suck), and a bit of a boost to your buying power to assist with further lowering costs.

So.. You really are not comparing apples to apples. I'd sell $500/mo 100meg servers all day, and know that once I hit a decent scale doing so, I'd be making decent money while generating a bunch of word of mouth behind the scenes that would bring me more profitable leads in the future. I would *not* sell $5/mbit "pay for your use" plans, with multiple servers a-la-carte (which most of our clients, and probably Brad's fall under). We would go under in very short order.

So sum it up. $4-5/meg deals are used as a marketing tool. They are not actually $4/mbit other than for a very small minority of clients. This includes myself when I sell these - however I'm very up-front about it "one server, one pipe" - much different than a standard managed hosting customer with 15 servers of various configurations, $18/mbit flat-rate used with a minimum, and customized server management. Two completely and entirely separate models.

[SpeakEasy]

Originally Posted by Moose

Lenny, hate to say it but you are way off on this one.Brad does know what he is talking about here. Like Brad I won't say anymore. Either way this is all now pointless. The AlphaRed bailout bill has been passed and signed!

You are correct dude, and so is brad and a few of the other hosts that have posted the same thing basically as Brad. snakedoctor really has no clue. But you're right it's all pointless now.

[Techie Media]

Originally Posted by Snake Doctor

I imagine Jim from Techie will be along shortly to bust my chops as well.

I like you and Jim, I really do. I

Hey Lenny, thanks for the kind words Naaa I'm not gonna bust yours or anyones chops, you know me I don't fight in public. I will just add my 2 cents and say i do side with brad on this topic. But I will also say my old buddy phill21's post above is great and saved me a ton of typing. Thanks Phill

[Mutt]

nice post by Phil - helped me understand bandwidth/hosting prices more

[BV]

I wish Bandwidth costs would go way up. Cheap B/W is helping to kill the paysites.
$100 a mb would be about right.
There is my

[V_RocKs]

Could have sworn I posted here already.

[Brad Mitchell]

Jim and Phil

We've always been friends, we respect each other now as we have for years. You are both completely unaware of the size and scale of what has actually transpired. Phil's explanation is excellent as a tutorial on a "run of the mill 100m capped server" offering but doesn't speak to this situation. We're not talking about just tens of gigabits sold at $4 on 95th actual usage, get your calculator out and start multiplying. It was exactly what you didn't know or think it was.

Brad

[Phil21]

Brad,

You may be surprised

I guess I'm unsure of "what has transpired" in your context - I wasn't posting as to any specific situation.

Some other stuff I simply won't discuss publicly as it's hearsay and it's pointless to repeat here - hit me on ICQ if you want to discuss it any further.

And, nice seeing you again Jim - been a while!

-Phil

[Brad Mitchell]

Originally Posted by Phil21

Brad,

You may be surprised

I guess I'm unsure of "what has transpired" in your context - I wasn't posting as to any specific situation.

Some other stuff I simply won't discuss publicly as it's hearsay and it's pointless to repeat here - hit me on ICQ if you want to discuss it any further.

And, nice seeing you again Jim - been a while!

-Phil

Lets chat after the weekend

[Brad Mitchell]

Originally Posted by Snake Doctor

Ok, bringing it.

Two examples for you here.

1) Webair has a standing offer to meet or beat any hosting offer. When companies like alphared and choopa started selling sub $5/mbit bandwidth, Webair didn't rescind this standing offer.
By logic one can assume that webair has customers hosted for those same prices....and probably picked some up today with people running scared from alphared.

2) Cavecreek recently offered to meet or beat any price for hosting, and to do so with their CDN, and they did this knowing there are alot of customers out there paying $5 or so per meg.

So unless you're willing to come out here and say that Webair and Cavecreek don't know what they're doing, or that they're somehow inferior to mojohost in terms of "staff, datacenter, servers, profitability and client experience", then this conversation is over.

You brought nothing to the party. All of us: Webair, CaveCreek, MojoHost, NationalNet and many more more can absolutely write whatever new business we want at any price match and still have profitability or meet some other organizational goal by doing so without jeapordizing our service.

My point is that all business can not be as such, that this is not sustainable as every day pricing across an entire book of business. Mike, Ron, Tony, many others - they will all agree with exactly what I am saying.

Brad

[txl]

Brad,

You need to get a clue. You and CWIE and their resold Level3 CDN. Lets get real here. If I were you I wouldnt be posting publically about your inability to meet certain price points and if I were CWIE I wouldnt be bragging about purchasing AlphaRed. There are no good assets there that can't be duplicated without the drama surrounding it. However, in my opinion, CWIE is just as clueless about hosting as they are about CDN so they might as well acquire and resell someone who can do it better than them.

Oh and Brad, stop calling my sales reps and asking them to raise their prices now that AlphaRed is gone. Not going to happen.

-D

[DarkJedi]

Originally Posted by Pete-KT

Brad,

We are very happy to be part of the Mojohost family

this thread isnt about Brad

god damn, what a fucking cocksucker you are

[Brad Mitchell]

Originally Posted by txl

Brad,

You need to get a clue. You and CWIE and their resold Level3 CDN. Lets get real here. If I were you I wouldnt be posting publically about your inability to meet certain price points and if I were CWIE I wouldnt be bragging about purchasing AlphaRed. There are no good assets there that can't be duplicated without the drama surrounding it. However, in my opinion, CWIE is just as clueless about hosting as they are about CDN so they might as well acquire and resell someone who can do it better than them.

Oh and Brad, stop calling my sales reps and asking them to raise their prices now that AlphaRed is gone. Not going to happen.

-D

You really should leave your signature in so I don't have to remind everyone that you're Choopa. Wow, you really shot right to the bottom. Keep writing that $4 and sub-$4 retail business in small and large volumes including all servers and support.

You arrogant asshole. My phone call to Andy earlier today was an olive branch, a suggestion that he pass a message to you so that we could discuss the state of the industry. You can paraphrase the conversation that I had with Andy in any fashion that you like but simply put, it was a reminder that people depend on hosts for their livelihood so don't fuck it up.

Thank you kindly for so quickly telling me everything I didn't know about you in one brief post.

Cheers,

Brad

[Brad Mitchell]

Originally Posted by txl

Thanks Brad, amazing read.


DaveA
Choopa, LLC
President
Icq: 400383
http://www.choopa.com

So at 10pm I was spot on but 3am I'm clueless?

We've all made our beds, it's time for some sleep.

Cheers,

Brad

[chemicaleyes]

Some interesting reading here.

[Doctor Dre]

So wait, you're saying there is waiting line to be your client ?
What does a waiting list for turn ups means ?

[fatal attraction]

Originally Posted by Brad Mitchell

So at 10pm I was spot on but 3am I'm clueless?

We've all made our beds, it's time for some sleep.

Cheers,

Brad

LOL, interesting read(that made me laugh though!) I love mojo host personally! I wasn't looking for the cheap way out, just the best way to host!!

[Sin_Vraal]

Originally Posted by Brad Mitchell

You really should leave your signature in so I don't have to remind everyone that you're Choopa. Wow, you really shot right to the bottom. Keep writing that $4 and sub-$4 retail business in small and large volumes including all servers and support.

You arrogant asshole. My phone call to Andy earlier today was an olive branch, a suggestion that he pass a message to you so that we could discuss the state of the industry. You can paraphrase the conversation that I had with Andy in any fashion that you like but simply put, it was a reminder that people depend on hosts for their livelihood so don't fuck it up.

Thank you kindly for so quickly telling me everything I didn't know about you in one brief post.

Cheers,

Brad

You know to be honest, every host here knows Alpha Red didnt fail b/c of low prices. Everyone here can live up to the fact that

A) They were rocking hosting like nobody else.

B) If people cared, then they'd not host there. People apparently DID like Alpha red, b/c despite all the name calling they pushed some serious traffic. If the service was bad, it wasnt nearly bad enough was it, cuz if it was. people wouldnt be hosting there.

C) James was a dumbass and fucked his business with Scareware. Low prices didnt. I suspect he was making a dime or two , otherwise microsoft wouldnt have taken the time to beat him like a red headed step child.

D) Everyone who has posted in these threads are vultures (myself included). Posting under the pretense of giving advice while 'nice' is really self serving.

And for the record, Dave is a dick. Judging from the only time I met you Brad your kinda cool, and you do your clients a great service. but in this thread your sounding like a dick too, and Dave is right.


Bottom Line: If your a cheap ass bastard, get Cheap ass hosting. If you want quality hosting go get premium hosting. $4 and sub $4 IS possible , it IS profitable and a successful business model WAS implemented (Alpha Red)


EVERY SERIOUS HOSTER KNOWS THIS PRICING IS INEVITABLE. People said the Sky was falling when Cogent came out. Yet we are all still here dragging our sorry ass feet peddling bandwidth for pennies when we used to sell it for 1000/mbit.

[baddog]

Originally Posted by V_RocKs

Could have sworn I posted here already.

In 2003 . . .

[BluMedia]

Great post Brad, one thing I really like about Mojo is the quality I get. I'm not a cheap ass company and my host shouldn't be either. You get what you pay for.

Mark

[Moose]

Originally Posted by Sin_Vraal

You know to be honest, every host here knows Alpha Red didnt fail b/c of low prices. Everyone here can live up to the fact that

A) They were rocking hosting like nobody else.

B) If people cared, then they'd not host there. People apparently DID like Alpha red, b/c despite all the name calling they pushed some serious traffic. If the service was bad, it wasnt nearly bad enough was it, cuz if it was. people wouldnt be hosting there.

C) James was a dumbass and fucked his business with Scareware. Low prices didnt. I suspect he was making a dime or two , otherwise microsoft wouldnt have taken the time to beat him like a red headed step child.

D) Everyone who has posted in these threads are vultures (myself included). Posting under the pretense of giving advice while 'nice' is really self serving.

And for the record, Dave is a dick. Judging from the only time I met you Brad your kinda cool, and you do your clients a great service. but in this thread your sounding like a dick too, and Dave is right.


Bottom Line: If your a cheap ass bastard, get Cheap ass hosting. If you want quality hosting go get premium hosting. $4 and sub $4 IS possible , it IS profitable and a successful business model WAS implemented (Alpha Red)


EVERY SERIOUS HOSTER KNOWS THIS PRICING IS INEVITABLE. People said the Sky was falling when Cogent came out. Yet we are all still here dragging our sorry ass feet peddling bandwidth for pennies when we used to sell it for 1000/mbit.

You have no clue.

[Enemator]

[Klen]

Originally Posted by Brad Mitchell

Klen,

I just laugh every time you try to stir something with me because as far as RedLight District goes, the banner thats always in your signature, their happiest day ever was the day they went live at MojoHost.

This is just another post of mine that you haven't actually read the content of.

Best Wishes,

Brad

Yes i know they host at mojohost and yes i admit i didnt readed your first post but you did post alpha red in title and that was enough for me.