
OVH Forum – Turnover on dedicated servers - jjoe
http://forum.ovh.co.uk/showpost.php?p=54520&postcount=1
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nolok
It's not a "failed pricing strategy" per se, the problem is that they want
offers that are really attractive, they are able to provide them, but those
offers are so good that too many people use them to upgrade. Which you can't
blame them for, but it puts OVH in a position where it wants people to not
upgrade too quickly, but still provide those good deals.

The obvious solution is to re-instate installation price, but Oles has never
been a big fan of it as it increase the entry cost for new comers. Remember,
they don't want to penalise new installs or growing stack in anyway, only
(too) quick rent/upgrade cycle.

An alternate solution might be a "un-installation" price if you stop a server
AND grab a new more/recent one to replace it after only a few month of
renting, but that would be too impractical and hard to explain.

~~~
jjoe
The long term fix boils down to increasing prices, adding setup fees, or
adjusting pricing of older equipment. Either way pricing needs to be adjusted
(pricing failure or lack of pricing foresight). There's no way to successfully
enforce retaliatory measures against those who cancel / re-order every few
months. Because you can always use a different CC / account / payment method.

So I really think this hiatus was put in place so OVH can accumulate enough
revenues over the next few months to be able to purchase new servers. They're
just not able to get in the black or even amortize older equipment.

~~~
cpncrunch
Reducing prices on used servers seems to be the best solution. That is what
iweb does (they have a 'clearance' section with cheap, slightly older servers)
and it allows them to clear out their old stock.

Generally you don't need the newest hardware unless you have huge amounts of
traffic.

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iSnow
I guess this "no installation fee" thing is killing their bottom line because
for well-managed shops with automated software deployment there is hardly any
disincentive to replace a rented server with a new one if prices or specs
change.

~~~
SudoAlex
These days, I ensure any personal servers that I rent can be scripted as much
as possible with ansible so I can do this myself - not just work servers.

If a new provider comes up with a great offer, I can place an order, run
ansible, rsync the remaining data, change IPs, proxy any remaining services I
need for a little bit and off I go!

Show no loyalty, get the best deal you can.

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Ellipsis753
What's experience has Hacker News had with OVH?

Personally I got a £4 a month ($6.30) dedicated sever from them not long ago
when they came out (I think they sold out within a couple of days). I had to
buy 3 months together as a minimum but it was still very cheap for a dedicated
server (2GB RAM and 500GB harddrive). However my initial experience with OVH
wasn't amazing. The website promised 24 hour delivery when I ordered it.
However after 4 days no word from them so I sent a support ticket. I got a
quick response saying that "As stated on our forums and website, the server
will be delivered between 1 to 10 days". Kind of strange as the website had
clearly said 24 hours when I placed the order (although it had since changed
to 10 days) I'd covered this in my ticket but this wasn't mentioned. Anyhow I
did get my server after 20 days (no word as to the hold up but at least they
started the 3 months from when I actually got access to the server rather than
when I'd ordered it). This is the only experience I've had with them and it
wasn't terrible but not very promising. I've always had good experience with
VPS on Digital Ocean so I think I'm likely to go with them instead when these
3 months run out. Alternatively I might keep the dedicated server just to
backup files on to. The terms and conditions did not seem to forbid this. Has
anyone else had experience doing this? Are they likely to destroy my server if
I use it for my personal backups? Has anyone else used OVH? What experience
did you have?

~~~
shimon_e
I've been with OVH for a few years now. Historical when they have advertised
the server will be ready in 1 hour it is. The problem with the new range was
that they were simply too popular. So much so that OVH's hardware partners
could not deliver the hardware fast enough. They got something like 15,000
orders for just one type of server in about a day. That is 10% growth in their
total server count in just one day! Sooo maybe you could cut the a little
slack?

Actually the cheap servers are suppose to be for personal use. They lack hard
disk raid, proper support, and have the lowest priority for hardware
replacements.

~~~
makomk
Yeah, I think there were even a bunch of non-technical people over at Hot UK
Deals who ordered the new low-end server. Must've been a nasty shock for OVH
all round.

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ck2
OVH Canada recently had a major price increase, no more cheap servers as of a
month or so ago.

Well I take that back, they still have entry level but they are very weak.

They used to have a $60 server that was usable but now it is $80, so $240 more
a year, not trivial.

OVH Europe has better pricing/configurations than Canada.

~~~
kybernetyk
> OVH Europe has better pricing/configurations than Canada.

You could always rent an OVH server in Europe.

~~~
makomk
As I understand it, OVH Europe goes to quite a lot of effort to ensure non-
Europeans don't order servers from them.

~~~
kybernetyk
Oh, I assumed they would operate like a usual company. I guess in that case I
wouldn't want to be their customer.

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Shish2k
I wonder if this explains why, when my current server failed and I decided to
replace it with two more powerful ones for half the price, my order was
mysteriously on hold for a week until the servers I ordered were out of stock,
and then the payment was cancelled after it was too late to question it :(

(They did at least give me the old server back with the failing drives
replaced...)

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dorfsmay
They could make everything more expensive, and offer significant discount for
"reserved" instance for 1 to 3 years, like Amazon does.

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scragg
I got the first dedicated server offering in their Canada DC. Since then, OVH
offered better servers at lower prices. I ask OVH support if they can lower my
monthly payment to match a similarly spec'd server. Keep in mind, they no
longer offered the one I was using afaik. They said "No, cancel the server and
order a new one". So that is exactly what I did, I was disappointed because it
was more work. If they would just offer a price match , they could have lower
turn over.

~~~
sudomal
It sounds like they aren't able to offer discounts. I did the same with my
provider after a few years. They halved the price.

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SG-
It's interesting to note that they've decided to go and upgraded all existing
older SP servers which previously had 100Mbit ports to 200Mbit for free.
They've been upgrading all the switches the last 3 weeks.

I think they could get less churn by doing some of these upgrades but also by
lowering server prices after reaching a certain milestone.

Personally I know I was interested in moving to a newer SP server which had a
faster CPU and more RAM combined with 200MBit port for only $20/more a month
until I heard they were going to upgrade my port for free. But that wasn't
advertised until I emailed them and it hasn't happened weeks later. If they
were proactive in emailing an upgrade notice and also maybe even upgrading the
ports first before the new servers came out they would prevent a lot of wasted
'upgrades'.

~~~
kbar13
They most likely did not email you because they actually don't have the
capacity to handle the extra load caused by everyone's cap being doubled.

~~~
SG-
You can clearly see their capacity with the OVH Weather Map and it really
doesn't show that being the case for at least North America (I know it's not
peak time but I've been keeping tabs on it at peak almost every day for the
last few months):

[http://weathermap.ovh.net/usa](http://weathermap.ovh.net/usa)

I don't know what the situation is in Europe.

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Ellipsis753
I just got an email from them saying "We would like to remind you about the
near expiry date of your services at OVH". Apparently my server will expire in
"less than 60 days' time".

I wonder if this is part of there new strategy to keep people on their current
plans. I only ordered my server for 3 months so they're very eager.

~~~
ryanweal
I think the real issue here is PayPal. I just opened an OVH account not that
long ago and was surprised they only accept PayPal in Canada and USA.

So I opened a business PayPal account even though I have no intention of
becoming a "paypal merchant". To my surprise, PayPal holds the money 8-10
days. Excellent.

It took about 20 days to get the payment through, so at least they started the
billing cycle from that point.

Having heard so many PayPal horror stories I would not be surprised if they
got screwed over somehow.

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nwh
I think I'd have stuck around if their interfaces weren't so awful.

There were literally 5 different control panels I could use, it took me a
support ticket to actually find where my server was residing (only in a single
control panel version). Love that they're making a sixth control panel to fix
that.

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hbbio
It's really the first time a company that big halts all its commercial
offerings! We are running a few OVH servers and they're clearly a great value
for money.

~~~
rgbrenner
Not true... Softlayer when they were servermatrix suspended sales in 2005.
IIRC it lasted about 6 months (but that's from my foggy memory.. so I could be
wrong).

Found this WHT thread:

[http://www.webhostingtalk.com/showthread.php?s=&threadid=453...](http://www.webhostingtalk.com/showthread.php?s=&threadid=453700)

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neves
The orquestration software like Ansible, Puppet, and Chef are killing them.
You you scripted your server, the cost to move to another server is almost
nil.

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shimon_e
A kickass cloud offering could be the solution.

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jjoe
Interesting problem and read (if you're able to get past the Frenglish).

======================================================

Dear Customer,

The server deals that we offer are based on certain principles which make
renting a server from us very appealing: \- no installation fees \- no
commitment \- monthly payment \- regular release of new features

Up to 100, 000 servers in our DCs, we haven't had any particular problems with
these principles. To manage growth, it was sometimes necessary to add a limit
of 2 new servers per month. Sometimes we had added installation fees for a few
months, but overall, the model functions very well.

Between 100,000 and 150,000 servers, we felt that these principles began to
create problems in terms of turnover.

What is turnover? Turnover is when our existing customers that rent servers
decide to take new ones from us to replace the old. This if not a problem if
the old server has been rented for 2-3 years, or if we can re-rent the old
server as a Kimsufi for another 2-3 years. But with 150,000 servers, the
number of customers renting a new server again after 3 to 6 months has become
the majority. And the old servers are becoming comercially obsolete too
quickly.

Today we have 170, 000 servers and since the range was updated at the
beginning of August, the turnover has sped up even more to become too high.
The majority of deliveries are basically just turnover. We are no longer
delivering enough servers to keep up with new projects or new customers. The
delivery time for everyone has become too long and we can say that the
mechanics isn't working any more.

As for the 170K servers already leased out, there's no problem to report and
no change to expect. Everything is running perfectly well and we're not
changing anything. The problem only concerns new orders for new servers.

How do we fix this turnover issue?

\---------------------------

We think we can find a better way of working which will enable us to deliver
servers in 1hr, while managing 200,000 or even 300,000 servers. But such a way
of working requires serious consideration.

We have started to make adjustments on certain elements such as IP Failover,
but clearly it is necessary to go more in-depth. We have multiple avenues to
follow, but if we start making changes every day, a piece here and a piece
there, nobody will understand anything any more.

And so even if we have more than 10,000 servers ready to be delivered (all
ranges and DCs mixed up), we have thus decided to "sell out" all dedicated
server offers in France and the European subsidiaries, as well as in Canada
and the USA. Orders already placed will be delivered, but we are not accepting
any more new orders.

This "sold out" action will enable us to take time to analyze the sales of the
last few months in greater depth, and understand the behavior of each customer
contributing to the turnover.

We will then put the servers back on sale in limited quantities (batches of
100 servers) and new principles to then re-analyze what has happened, and so
on and so forth until finding the principles which will allow us to:

\- deliver the servers to you quickly \- offer very competitive offers \-
increase customer loyalty to their servers

At the same time, we're speeding up the rewriting of the API in v6 in terms of
domain names, emails, web hosting and dedicated servers. The same goes for
Manager V6 which will replace V3 and V5 before the end of the year. Our order
system will be reviewed before the end of the year for all the services that
we offer you. We will be able to offer bank card auto-renewal in Europe and
Canada. In short, we are making the most of this " sold out" period to focus
internal resources not on growth, but rather on consolidation of our
backoffice and on careful consideration of the mechanics of our offers.

In the meantime, if you have new projects which oblige you to rent new
servers, please don't hesitate to contact us so that you can place an order
manually. We have the server stock but we don't want to deliver it and
continue this high turnover cycle.

We're counting on your feedback to help us to refine the mechanics, which must
be convenient for you and allow us to do our job without having to change the
rules of play every 6 months because we have 200K or 300K servers in our DCs.
This is basically a good time to discuss and exchange, and then to come up
with the idea that nobody has yet come up with…

Best wishes,

Octave

~~~
brohee
"Interesting problem and read (if you're able to get past the Frenglish)."

His French is just as bad. It's kinda refreshing to read stuff that isn't
passed through PR consultants for polishing. OVH brutal honesty is very rare.

~~~
astrodust
It's true that some people just have two second languages, and some barely a
single.

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PaulHoule
You never get fired for choosing AWS.

~~~
astrodust
You'll get fired for making a devastatingly bad call, and AWS could be one of
those. It's difficult to work with, can be expensive if not used effectively,
and exposes you to completely different kinds of risk than your team might be
used to.

~~~
samspenc
We're a small company (30+ people) and been happily using AWS for several
years now. We've found them price competitive for the same features - and they
are really easy to use if you're looking for scale.

A few reasons for why I think they're now the 600-pound gorilla in that space.
;)

~~~
gaadd33
Just curious, do you just use EC2 and do you dynamically scale the number of
machines you use frequently? All the math I've done for a constant number of
servers/instances shows that unmanaged dedicated or colocated hardware comes
out far ahead in price.

