4 ms·
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 ar
by nolok 13y ago
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.
- jamesaguilar 13y agoOr, more simply, charge enough for upgrades to cover the actual costs.
- simias 13y agoHow to discriminate fast upgrades versus newcomers is the gist of this issue, yes.
- hackerboos 13y agoI'll admit that when I seen the new prices and quickly upgraded my servers. I got a 400% increase in hardware for only double the price.
- hbbio 13y agoThat would probably be illegal as well in France.
- jjoe 13y agoThe 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 13y agoReducing 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.
- mseebach 13y agoThe problem is that the price they're charging is predicated on the customer staying a customer for a minimum period of time. When that predicate fails, because leaving earlier is too attractive, the pricing model falls down. The obvious crude solution is lock-in, but that doesn't quite cover it, because they're happy with a smaller-than-current fraction of their customers leaving early - and, probably more important, they're happy that customers feel the freedom of being able to leave. Your suggested "un-installation price" is a bad idea: That gives the competition an edge to poach off your customers - you don't want to charge your customers extra to stay with you. Something that might work is to raise the price of new servers, then have it drop automatically after 6 months (or so). After all, new servers are worth more, that's why people want them. Maybe the price could be lowered further automatically every n months, perhaps by a faster rate if you've held the server for a long time. That makes upgrading less attractive without making existing customers feeling shafted.
- thatthatis 13y agoIt sounds like they need a standard cell phone style two year service contract with a breakage fee.