Best of the ISP-Lists

Prices in a World Without DSL

If DSL in not available in your area, and a client wants to host a large website, you're talking about T-1 lines. Here's how the members of the ISP-Webhosting list break down the bandwidth costs.

[January 10, 2003]

On the ISP-Webhosting list in December, GO asked:

"How much should I charge for a hosting sub that uses this much bandwidth:

The total last month was 952.39MB.
In October the total was 1,163.84MB.
The September total was 897.27MB.
I pay 600.00 per meg. What would you folks charge."

[AK asked] "I assume you mean that you pay $600 per megabit of bandwidth? How much you charge the client depends on a combination of how much bandwidth you give them and how much traffic they sustain over the month.

So if you limit the bandwidth for their site or server to 1 Mbps theoretically they can chew threw 86.4 gigabits (Gb) per day, which is 12 Gigabytes (GB) per day. The true traffic that could be sustained would really be about 6 GB per day (this has been discussed to death on this list so let's assume between 4 and 9 GB per day). The point being that +/- 1 Gb per month of traffic is fairly insignificant on a 1 Mbps connection. You could share this connection between a dozen average sites and none of the sites would 'notice' a difference.

Look at prices at a few big providers to get a feel for what to charge. Generally we provide 5 GB per month traffic for a colo client with an escalator of $0.002 per Mb over that figure, but it depends on the specific circumstance. For instance, what if they need 30 Mbps bursts because they're doing live video feeds for 1 hour once a week? The run-of-the-mill website (no multimedia) with a decent amount of traffic (over 20,000 page views per month) could run about 1 GB per month of bandwidth, and since you've measured it out it looks like that's what this client's averaging.

So it comes down to what services you're providing. Is this a shared server or is this a colo deal?"

[GO responded] "Here are the missing pieces:

I don't do much hosting or colocation.

I do dial up, broadband, and PtP soho T-1's. I'm in a small market.

Our POP is fed with four T-1s from Qwest and the cost is about $900 per T-1. I have a potential sub who is doing hosting elsewhere but is thinking of moving here and I'm trying to give him pricing for a hosting or only broadband package.

His usage where he is located has been according to webtrends reports :

• The total last month was 952.39MBytes
• In October the total was 1,163.84MBytes
• The September total was 897.27MBytes

So I'm trying to figure what it's going to cost me and what he should be paying (fair market price) just for the hosting alone. I'm considering giving him a PtP T-1 and letting him host on his own machine on his own end of the T-1. In this neck of the woods, the only chance of high speed for him is a T-1. So I'm trying to bundle a package."

[JL replied] "He's moving approximately one gigabyte of data per month. A T-1 moves approximately 500 GB of data per month, but only if you have maximum usage, all day every day. We generally figure we can sell 200 GB of data transfer per T-1, and everyone's going to be happy. This figure is based on about eight years of hosting, and not any formula.

So your cost (based on 200 GB of transfer available per T-1) is 1/200th of $900, or approximately $4.50.

We include one gigabyte of transfer monthly in our least expensive packages, and you'll probably not feel anything if you do the same. Charge anywhere over $5.00 for each extra GB and you won't be losing money."

—End