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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 wou

by tinco 13y ago

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.

thaumasiotes 13y ago
Yes, it's obvious enough that the author specifically calls it out: > So yes if it's a turnover issue, we could offer the old server at the same price as the new one as an incentive. It might or might not be correct, but it's an extremely obvious idea.
kijin 13y ago
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.
rsynnott 13y ago
> For some reason the old customers do enjoy upgrading their machines though This is largely their own fault; they make doing this relatively cheap and easy, and are thus punished for it.

by tinco 13y ago

thaumasiotes 13y ago

Yes, it's obvious enough that the author specifically calls it out: > So yes if it's a turnover issue, we could offer the old server at the same price as the new one as an incentive. It might or might not be correct, but it's an extremely obvious idea.

kijin 13y ago

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.

rsynnott 13y ago

> For some reason the old customers do enjoy upgrading their machines though This is largely their own fault; they make doing this relatively cheap and easy, and are thus punished for it.