
Why all OVH dedicated servers are "sold out" - mike_esspe
https://www.ovh.co.uk/a1186.SoldOut
======
bio4m
The biggest problem was they were introducing new servers with similar or
better specs than servers existing customers had. And instead of dropping
existing customers prices, they kept them static. So a lot of people found
themselves looking at a bill 600% higher for the same server just because they
were an existing customer. Who in their right mind would pay 6x times more for
the same service ?

They could stop the customer churn by simply changing the price to match the
new offerings.

At the time I switched to a new server type I even asked their customer team
if the new pricing would be offered to existing customers and the answer was a
flat no.

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davidjgraph
How about simply reduce the rental cost of the older servers to below that of
the newer servers? I don't see this mentioned anywhere, isn't it pretty
obvious?

~~~
tinco
No it's not pretty obvious. Reducing the rental cost of sold servers means
directly reducing revenue, that sounds like madness to me.

The saner alternative would be to _increase_ the cost of the newer servers,
but as they point out that could result in them being less competitive.

The real solution would be to devise some way where happy customers just
retain their current servers, and new customers can get the latest hardware
for the lowest price.

For some reason the old customers do enjoy upgrading their machines though, so
this lands them in a tough spot. They can't have the best of both worlds, both
the lowest prices and the freedom contracts. So they're going to take their
time finding out what their strategy on this is going to be.

~~~
kijin
Ideally, the old servers would have (1) paid for themselves, and (2) generated
a reasonable amount of profit, before they became so obsolete that the market
demands drastically reduced prices. A high revenue stream from that server
after that point should never have been part of OVH's business model in the
first place.

A host that expects customers to keep paying the same monthly amount for a
2-year-old server is no different from a rotisserie that expects customers to
pay the same price for last week's leftover chicken. If the rotisserie's
business model depends on selling stale poultry at a higher price than what
the market would bear, it is clearly unsustainable and deserves to have its
revenue reduced.

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dcc1
I cancelled all my OVH servers, on the high end they are a ripoff and their
internal network went to crap recently, it was faster to move files to another
country than between 2 HG XXXL servers, go figure

I am currently testing the waters on offering 24 and 36 drive storage monsters
[https://news.ycombinator.com/item?id=6576796](https://news.ycombinator.com/item?id=6576796)

any feedback is appreciated

~~~
cmer
I agree with you. Their internal network is crap. And recently, their external
network has been horrible as well.

We have 40 servers with them and we're getting out of there. Been getting
downtime almost weekly for the last couple of months.

Their prices are impossible to beat in America however. Even heavily
discounted, SoftLayer is more than twice the price.

~~~
tluyben2
I used to not like them years ago when I had a lot of servers, moved away,
went back and we are very happy now. We are not experiencing the downtime /
slowness you are referencing. And the competition quite expensive compared. I
mean; I don't have to get the cheapest stuff possible, but Softlayer etc is
really not economical for our business even if OVH would have some downtime.

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jjoe
"bringing in new customers and new projects which will _allow us to increase
our business figures_ "

Guys, you need to realize this isn't about getting the balance sheet in the
black. There is no legitimate or interesting problem to solve here. They've
been deep in the red. Their ultimate goal is to increase revenue figures at
_all cost_ and perhaps look "good" for an OK exit. Maybe there isn't more
users or market share to grab in their niche. Hence the "thrashing." Their
target server count is a million. They've been building DCs left and right
with this figure in mind without there being solid sustained demand. I think
they've spread themselves too thin.

OVH is working hard to acquire as many users as it can for the sole purpose of
pleasing investors. And when that becomes any business' only focus...

------
sriramiyer
I too, like many of you find their policies a little strange. Where the entire
business world practices reducing prices of older products and replacing them
with superior products at old or even slightly _higher_ price points one must
wonder the reasoning behind their, "newer must be cheaper than older" strategy
where they do not pass on the benefit of the older hardware to the customers.

If an existing customer reads that page, and this thread there's just one
thing that they will immediately deduce. Existing customers are being used as
a subsidizing agent to capture new audience. Which, again is quite strange. In
a game theoretic way, this drives the point to existing customers that it is
beneficial to not be loyal to the service (i.e. cancel/re-order).

If they reduced cost on older hardware while introducing newer one, they could
also list those up for sale. Surely people on a budget or people who don't
need a Xeon will simply settle for an _older_ Atom at a cheaper price. This
also allows OVH to retain and milk the box till its ROI is hopefully achieved.

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clienthunter
I'm an OVH customer, and I find this unbelievably bad practice. This rant is a
piece of polemic that only serves to legitimise _their_ screw up. Not selling
cheap dedi's makes them entirely redundant.

~~~
vidarh
What rant? Unless you're seeing something different to me, it's a Q&A form
text that calmly explains the problem they have encountered with their current
business model, and how they are going about trying to figure out a model that
will work for the long term.

You are right, if the situation remains, it does make them redundant. On the
other hand, if the turnover is too high to allow them to recover the cost of
the new servers, they'll go bankrupt, so it is a problem they need to deal
with one way or the other. The approach they've chosen is unusual, that is
all.

~~~
aroch
The text is almost verbatim from a post Oles made a month or so ago. It read
someone what like rant, but mostly because Oles apparently can't write in
French or English with proper grammar

~~~
clienthunter
Still, hardly my problem to figure that out and make allowances for it. It's
his job to have it copyedited/run past someone in the company who is capable
of empathy with customers.

~~~
aroch
I don't know, if you've been dealing with OVH for any length of time you
should realize this is par for the course. OVH (in particular Oles) have
always been brusque and unsympathetic to their customers whenever they've
changed policies (usually with no consultation of their customers). OVH
couldn't give two shits about your problems

------
yannickmahe
CEO announced on twitter they would have new offers in 10-14 days.

[https://twitter.com/olesovhcom/status/390557634790973440](https://twitter.com/olesovhcom/status/390557634790973440)

------
benmorris
It appears to me they have underpriced their servers to the point they can't
offset the ratio of existing customers upgrading servers. Seems like they
should implement longer term contracts if they want to keep offering these
rock bottom prices people keep snatching up. I'll admit looking at their
pricing I can see why they sell so many.

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nly
Despite other criticisms, you can pry my $60/year dedi out of my cold dead
hands (2 GiB/500GB/dual core Atom)

~~~
aroch
Using OVH's horrible volume network, backed by their crap support with their
servers built from a lot of QC-rejected procs on 5400RPM drives.

~~~
anoncowherd
It seems you've got some bad experiences with OVH. Could you go into more
detail on this stuff?

Do you think Hetzner is better than OVH, by the way?

~~~
aroch
OVH's network is one of the most overly sold of any large multinational host
(At one point they had ~40Gbps fiber between their DCs but, of HG servers
alone, had sold over 2Tbps of bandwidth). Their volume network has horrible
contention and they don't even try to make it worthwhile -- 'best effort
bandwidth' is basically what residential bandwidth is.

At one point I had ~5K of servers with them and in any given week one of them
would require some work. My org had paid for the best SLA (<2 hour) and we'd
often have to wait a day to hear back what the problem is and another day, at
least, to get things replaced.

OVH's general business plan is to expand customer base quickly, then take the
time to actually build out the network to fit their pre-growth size.

Hetzner is a little better on supportbut they have some annoying policies (See
the DDoS thread from yesterday), I do like their automation though. I'm now
mostly in Leaseweb and a couple CN-datacenters with my own peering mix

~~~
anoncowherd
Well, I should have realized OVH's prices were too good to be true :)

>> My org had paid for the best SLA (<2 hour) and we'd often have to wait a
day to hear back what the problem is and another day, at least, to get things
replaced.

Ouch. That's really unacceptable, especially when you've paid for supposedly
top notch support!

>> Hetzner is a little better on supportbut they have some annoying policies
(See the DDoS thread from yesterday), I do like their automation though. I'm
now mostly in Leaseweb and a couple CN-datacenters with my own peering mix

Hmm.. I haven't seen the DDoS thread.

But do you think Hetzner should be avoided, or did you just find Leaseweb that
much better? Hetzner's dedicated servers look like good value for money,
assuming there are no hidden problems like with OVH.

~~~
aroch
Hetzner is a budget host, as such their lower end offers should be carefully
evaluated. Hetzner has a habit of shutting down servers if they're DDoSed
rather than deal with the DDoS unless you're on a higher tier of service and
SLA. Hetzner is, all around, a good host. Leaseweb better suits my needs
though (I have a rack in .NL and .US)

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networked
>The main competitor of OVH is actually OVH itself. The customer stays with
OVH but orders a new server instead of keeping the old one.

Interesting problem, and surely not the worst one to have. What would have
been a more graceful way to deal with it, though, if any?

~~~
clienthunter
I wouldn't call it interesting, the situation was massively predictable - I
would call it profound incompetence.

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alexandros
Surely if users are flocking to the 'latest and greatest' you deal with that
by gradually reducing the prices of the old servers such that you get natural
price discrimination?

~~~
vidarh
That's one possible solution, but then that needs to be accounted for in their
price model to ensure they can pay off the cost of each server over its life,
and that seems to be a substantial part of the problem they've run into:

The turnover on each new generation is higher than their models accounted for,
and so reduces their lifetime expected revenue per server too much.

Doing what you suggest is certainly possible, but would likely mean they'd
need to charge more early on.

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lowry
it would be much better for their sales if they did not force clients to
manually renew every 3 months.

~~~
Karunamon
It was every individual month for me. This combined with a dodgy spam filter
led to me losing my server there. And now I can't reorder because of this
silliness.

Oh well. I recently found out that I can get business-class internet at my
home, so I'll be moving all that stuff inside my own network soon enough.

~~~
maaarghk
Monthly for me, but managed to keep on top of it. Happy to know that they are
re-thinking payments, because it was getting really annoying.

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Napapijri
OVH is the worst out there.

