Re: [cobalt-users] UK2.NET & DNS

["Steven Werby" <steven-lists@xxxxxxxxxxxx>]

Tom Worley <tworley@xxxxxxxxx> wrote:
> > Well, any business that has profitability as a goal has to make its money
> > somewhere.  uk2.net charges a very low prepaid hosting fee.  At £29 a
> month for
> > a dedicated server one has to wonder how they can turn a profit.
>
> They charge £1220 upfront for 3 years, not £29/month.

I've heard they require 3 years prepaid - that wasn't my point.  My point was
that they're charging a rediculously low £29/month (according to
http://uk2.net/).  At 36 months that's £1044.  If they have additional charges
that bring it to £1220 I don't see them, but it's close enough that we don't
need to argue about it.  At £1220 it's £34 a month.  Factoring in the time value
of money maybe it £36.

> They also bought 1000 Raq3s at a very large discount, and (as far as I know)
> you can buy raqs for less than £1000 direct from cobalt. Well they must be
> making quite a lot on a bulk order that size.

How do you figure?  Assume they buy them for £1000.  And they charge you £1220
for 3 years of service.  Factor in bandwidth costs, customer support, marketing,
the cost of their facility, labor, insurance, overhead, etc.  Do you really
think they're making a lot?

> Also, we get 5Gbyte/month
> bandwidth, so we have to pay £6.99 per GB on top of that (and I will
> definately go over that soon)

You make it sound like you were forced to go with them.

> Right, well for £1220 you get no support at all. No phone support, and
> you'll be VERY lucky to get email support from them, which is why I setup
> www.uk2raq.com for all the people who bought raq3s with them, as we're all
> having exactly the same problems...

I respect that you've done that.  Unless their customers don't understand any of
the underlying costs they have to understand that one of 3 things are happening:

1. Their prices will go up
2. Support will be non-existent and reliability will be poor
3. The company will soon go out of business

> Having said all that, of course, the deal is very good, and my raq is
> performing very well, and I'm not complaining about anything other than the
> prices to change the name server entries to my own name servers so that I
> can host my domain names that I have bought with uk2.net on my raq3.
> Basically, I can't host any of my domains (50+) that I have with uk2.net
> without spending more money on getting the name servers changed.

If they aren't disclosing this before you buy their service you have a valid
complaint.  Otherwise you don't.  They have the right to institute whatever
policies they choose and you have the right to not do business with them.
Clearly their strategy is to market their service at a rediculously low rate and
charge money for additional services which may or may not be absolutely
necessary to their customers.  What's less clear is whether they're doing cheap
hosting as a loss leader for current or future revenue streams like development,
support and consulting.  It's also possible they're going to generate a lot of
cash flow early because they charge for 3 years in advance and either 1. hope to
get bought out, 2. skip town with their customers' money or 3. raise rates.
Personally, I'd be very skeptical of any company that charges for that long of a
period up front.

> I'm not asking them to use their own name servers, I want to use mine! And
> ALL of the other registrars I use will do this for free (ukreg.com
> easyspace.com easily.co.uk etc...). I already have 5 domains hosted, all
> bought from easyspace or ukreg as I can change which name server the domain
> uses for free.

Would you be happier if they said hosting is £29/month, but each domain hosted
will be charged £1.50/month?  Or if they assumed internally that the average
customer will host 100 domains and they charged £155/month instead and allowed
you unlimited domain hosting, DNS hosting, etc. at no additional cost?  Would
you rather they alloted you 50GB of bandwidth and charged you a higher basic
rate?  £6.99 per GB is a little steep, but many customers will never exceed
their 5GB allotment.  I'm not affiliated with them in any way, I think their
perceived business model is sketchy and I don't care for their marketing
stragety, but as long as they disclose their charges in advance they're within
their rights to do as you suggest they're doing.

--
Steven Werby {steven-lists@xxxxxxxxxxxx}