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That sounds like a business idea. Create retail services in a market filled with custom dealmaking. I'm guessing that might be hard in your case since it sounds like you have to deal with huge datacenters and network providers.


edit: re-writing my post; I... somehow misread you; I thought you were suggesting creating a service to do the negotiation for you. No, you were very clearly saying:

>That sounds like a business idea. Create retail services in a market filled with custom dealmaking. I'm guessing that might be hard in your case since it sounds like you have to deal with huge datacenters and network providers.

And this is, essentially, what "The cloud" is, and is why "the cloud" is so popular. The pricing is right on the tin, no wasted time negotiating.

I tried to do the same with raw rackspace and bandwidth, but really? re-selling rackspace when you don't own the datacenter is a really shitty business to be in. I mean, I'm not kicking off my current customers, but depending on how the data-center that my buddy will own turns out, I may or may not actually continue to sell co-location services.

Also, everyone expects the negotiation. In datacenter space and small bandwidth deals? (at the low end, they are sold in a bundle) there are middlemen who can funnel customers to you... for the low fee of 10% of the revenue that customer brings /for the life of the customer) Like I said, it's a shitty business; if you are leasing racks and re-selling them, you are /really lucky/ to be getting 10% yourself. (of course, margin (and labor) go up as you lease larger chunks from your provider and sell smaller chunks to your customers... margin on my quarter rack product was rather better; rack cost $600, and if it was full I made $800. Which isn't bad, except that I've gotta fill like 10 racks just to cover getting a reasonable amount of bandwidth into the facility.)

Man, I'm not very coherent tonight. But yeah, the 10% commission for the guys funneling you customers... normally? you make up for that; if someone comes in through one of the funnels, well, guess what, their final price after negotiation is just 10% higher than what you are willing to negotiate down to with someone who comes direct.

(the fucked thing here is that most of those guys that will point customers at you? they have websites that make them look like they are co-location providers.)


Thanks. You interpreted me correctly... and confirmed my suspicions of how hard it is.

Best of luck with your friend's new datacenter.


yeah. That's the sad thing though... what you originally suggested is what I've been wanting to do with the datacenter space. I'm pretty frustrated, really, that it doesn't appear to be possible... I mean, I'm in deep enough now that I can't just walk without consequence.

(as an aside, he.net does seem to be kinda doing it; I mean, their prices are mostly standard. Not really, though. And their power prices are absolutely terrible compared to the high end, as they make you buy a whole rack to run like five servers. I'm pretty pleased with their bandwidth, though, I mean, for the price. Way better than Cogent, for example, who can easily be more expensive.)

I mean, I can get the other guy to handle most of the custom dealmaking (at the cost, of course, of a smaller cut for me.) but changing the industry really was one of my goals... and it's just not going to happen this time around.

I don't know... I'm starting to think that a sincere will to 'change the world' is an inherently bad thing. The whole business side of things is full of [un]ethical compromises and gaining advantage through concealing relevant information (and this, if you are dealing with the most honest folks; if not, it's full of outright lies.)




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