Thread: Are costs rising for hosting companies?

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If IpHouse up their prices, then it will put an interesting light on the situation, where demand completely outdoes supply!!

Not sure I follow. If IPHouse put their prices up to say, telehouse or even higher to redbus levels, then it'd be a case of supply outstripping demand, because there's a lot of people who wont be able to afford that pricing.

Originally Posted by PHP4Hosting

Upto 25% per year they say. There are other options but the ones in london are shrinking fast

The 25% figure is only set in stone with the suite owner that got it specified in the contract. Otherwise, FWIU, iP House do not put any 'max' price rise in any of their contracts - although that is no different to TCRB either.

DB

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Originally Posted by PHP4Hosting

Upto 25% per year they say. There are other options but the ones in london are shrinking fast

If you sign a contract that says that with any DC you're rather daft.

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Your business, do what you like. I would not follow suit.

Actually in a facility like IPHouse where pricing is bound to fly up once it's full, it's probably not a bad idea, as then you've got your worst case scenario all planned out for the length of the contract.

Originally Posted by PHP4Hosting

Depending on your business model Redbus price rises may or may not effect you, but costs are certain to go up in all data centers in London. If you can agree a fixed amount at least you can work that into your business plan etc..

Yes it is always better to agree on fixed/maximum price rise amounts. Telehouse mention it as standard in their contracts. The others do not, so best to be prudent about it and have it entered into the contract.

As for price rises themselves, it is not only a London phenomenon... Data Centre fees are rising in the rest of Europe too and I reckon the rest of the UK will be doing the same over the comign year.

Actually, Redbus contracts have a fixed price rise of RPI in them. That is why for anyone who has accepted the new price rises it means you have to sign a "variation agreement" which overrides the contract Redbus have with you. Their only other options were to give you a ~3-4% (RPI) rise or terminate your contract.

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I would like to re-iterate that I'm not objecting with having some kind of fixed raise per year, but this suggested 25% figure is far too high and would be unacceptable to me.

I would either work harder to have that reduced, or seek an alternative supplier that is willing to agree to terms I deem acceptable.

Originally Posted by James[UH]

I would like to re-iterate that I'm not objecting with having some kind of fixed raise per year, but this suggested 25% figure is far too high and would be unacceptable to me.
I would either work harder to have that reduced, or seek an alternative supplier that is willing to agree to terms I deem acceptable.

Faor enough - however please do not suggest that those others involved in the industry did not work 'harder' to get a fixed 'max' annual price rise into the contract - taking into account the requirement for a Docklands location, space and power availability and of course initial price.

Yes there are other DCs out there and one may be able to twist the arms of some new or old DC that has come up way way out of London, but the truth is that within the Docklands there is a major demand for space and power and the suppliers at this moment in time have the upper hand. :-/

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There are alternatives, if you're prepared to venture out of Docklands by a few miles – The Dockland located DC’s will insist there’s a shortage of space, in Docklands maybe, but further a field in London there’s adequate space, it’s a myth that there isn’t. You’ll be paying a premium for your connectivity, but this will still be less in the long run than the prices the Docklands DC’s want and are trying to charge you.

Originally Posted by James[UH]

There are alternatives, if you're prepared to venture out of Docklands by a few miles – The Dockland located DC’s will insist there’s a shortage of space, in Docklands maybe, but further a field in London there’s adequate space, it’s a myth that there isn’t. You’ll be paying a premium for your connectivity, but this will still be less in the long run than the prices the Docklands DC’s want and are trying to charge you.

I'll welcome tho extrication of the companies who are extremely prise sensitive from t he Docklands DC's. It will have a twin fold benefit

a) ability for customers to easily differentiate between premium providers and low cost providers

b) more space for those who stay to expand into.

I have clients who pay a large premium to host in Docklands for a multitude of reasons I shan't go into. We all knew the price rises were coming 2 years + back, those who didn't adjust their pricing to allow themselves to remain buoyant will just have to move out into facilities more suited to their clienteles actual requirements.

Those of us who need N+1+1 to cover SLA's / attract a different demographic of client will stay put.

We all know the market is saturated, this will help kill off / differentiate the low cost low offering hosts whom, up until now, have managed to blag their size / status / ability based solely on the fact they have some space next to the larger providers.

I've have a thought that IPH may be on the future 'list of places to buy' and I certainly don't see prices dropping ANYWHERE.. this is a business for everyone, and every business, provider, datacentre, bandwidth supplier.. has share holders who want to see a bigger 'n' better bottom line.

J