How do cheap Server Hosts survive?

[FroggyKnight]

Hello everyone. I'm new to this business and would like to know how in the actual heck these cheap hosts survive at hosting like $2.50/GB? Especially when they boast about having either i7's, or ThreadRippers? Like how would they even be able to make a proffit? I get how they can buy servers from OVH or other hosters, then re-sell them, etc. But if they're buying a dedi from OVH at around $80/month, then sell the ram @ $2.50/gb, while the Box would only have around 32GB of total memory. How would they make a profit if the income would be like $80/month (with 100% selling out of the server, even though most say they do not over-sell)?

If anyone has any answers to this, thanks.

~Trent.

 

[BrettPlays]

I have the answer for hosts under $1: They don't for very long. I'm not sure about $1+ though.

 

[FroggyKnight]

Well, it depends, as some hosts would likely have to oversell to even try to make a profit, to get a real answer from a host that is at $1 you could ask Dann, or ask Lord Flo how he gives off 32GB for just around $4.99 with a $5 setup fee for his unlimited mc hosting.

Thanks for the reply, and $5+$5 setup fee for 32GB? That's insane. I'd love to talk to this magically person.

 

[FroggyKnight]

Most of the time it is overselling which can have disastrous consequences which result in them losing players and the host dying off. The MC hosting business is quite erratic and only few hosts have been able to make a name and keep it, all the others fade in and out of obscurity.

Gotcha, thanks for the reply.

 

[Focus.]

I can say firsthand that most of the hosts I've worked with/for oversell.
However in this market, $2.5/GB Is often considered expensive.

Personally, I charge $1/GB with decent specs - the real loss is that it is difficult and/or impossible to make an attempt at getting the money you invested back within year. You'll need a higher budget and larger nodes.

Scroll up to someone like FastSRV and you'll see that they're managed by a parent company 'investment group' - the backfall for a loss of profit they will likely receive.

If you're talking about someone like Deluxenode, you'll find that they own their hardware and likely have budget colocation.

The reason you see so many $1/GB Hosts dying is because they resell the $30 128GB 2x AMD Opertron node at SyS and run out of money because they are memed on by summerhost.