Hosting Industry Software: How much do you think is a fair price increase per year?

vpsgeek3333 · October 2020

It is not possible for us, living in capitalist economies, to prevent price increase. The most common reasons for this could be one or some combination of:

Inflation
Devaluation of Currency
Just because the owners/devs want to do it
The owners/devs want their product to be "enterprise only"
And of course there can be many other reasons as well

But how much price increase do you think is fair & would not be toll on your pocket if you also get assurance that price increase for a particular software will never be more than a fixed percentage every year?

deank · October 2020

-5% per year in lowend deluded market. Or do lifetime deals before taking off. Whichever floats your goat.

In real world, my grocery price has been going up by 20% yearly for the past decade.
Commercial rent renewal increase is generally 5% in Canada per term (5 years).
Cigarette price has been going up by around 25% per year for the past decade.
Booze price has been going up.

Do the math.

somik · October 2020

Up to 30% for bad times, usual of 2~5% to keep up with the devaluation of currency on yearly basis.

havoc · October 2020

The notion of fair percentage is pretty meaningless in this context. Companies will charge whatever the market will bear while simultaneously trying to maintain/gain market share. i.e. Driven purely by market forces.

If you absolutely have to boil it down to a simple percentage then Consumer price index is probably your best bet. Question then becomes Consumer price index in which country though.

vpsgeek3333 · October 2020

@havoc said:
The notion of fair percentage is pretty meaningless in this context. Companies will charge whatever the market will bear while simultaneously trying to maintain/gain market share. i.e. Driven purely by market forces.

If you absolutely have to boil it down to a simple percentage then Consumer price index is probably your best bet. Question then becomes Consumer price index in which country though.

As I said in OP that there can be many other factors but am just trying to get a rough idea of what hosting companies as well as end users (as price increase of software affects both) think as to how much price increase is fair & is not a toll on their wallet.

willie · October 2020

Fairness doesn't really come into this, and in the technology sector we expect costs of stuff to decrease rather than increase as technology advances. If you're thinking of cPanel, the answer is that it's a squeeze play and you should just stay away from it, or escape if it's not too late.

seriesn · October 2020

Tbh,
Price increase is fair. Any amount and % is also fair, as it depends from business to business. However, unless absolutely needed, price increase should never impact existing orders but should only apply to new orders.

vyas · October 2020

Makes it difficult to vote in a poll that does not have $7 as an option.

vimalware · October 2020

I feel a chill in my scaleway dedi invoice panel.

20 EUR/m is not going to enter year 4 I think.

bikegremlin · October 2020

Whatever (you think) you can charge.
It's capitalism.

splitice · October 2020

Gee this is relevant to a recent discussion I was having only hours ago on Discord.

The webhosting market is a rare market that has over the past so many years decreased or maintained price. The $7 on limit on certain forums has it's part to play in this. $5/1GB VMs have a part too (more recently), but as the big movers of those are large companies I expect they are planning for the future. Maintaining the same price is only economical if one of your major costs gets cheaper (hardware, power, network, labor, colocation, services, legal/accounting) and few of those are and those that are (bandwidth, possibly hardware) are not generally at the rate required to counter CPI.

This is not to say uncontrolled price increase is a great idea. No one here wants to pay AWS prices but sustainable prices are good for everyone. Economics (capitalism) keeps everything in check normally. Just remember the adage "Price: a race to the bottom where no one wins". And you certainly won't win when you loose all your data, your uptime, your idlers when the company you chose goes under.

Anyway I'm stocking up on popcorn for sure. This BF/CM is going to be very interesting, particularly around December/January. What was the official count of LE* posted companies that went under last year? Think we will beat it this year? I think we will.

bikegremlin · October 2020

@splitice said:
Economics (capitalism) keeps everything in check normally.

I disagree. Capitalism, market economy, if not kept in check by strict anti-monopoly (and other regulation), leads to one taking it all.
Once you gain an advantage, you are in a better position to get better prices for your input, and/or sustain dumping prices on your output, until you put everyone else out of business. For most areas.

Today there are a lot of regulations in place, world-wide. They do provide for the rich to get richer, but in a lot less obvious and exclusive way, so at least those born in US, EU and perhaps a few more countries, can make a decent living even if they are not born rich. For the rest of the world, the picture is a lot less bright.

InceptionHosting · October 2020

I would say inflation at the rate of origin of the companies primary base is fine.

SpryServers_Tab · October 2020

Setting a constant % on it may not really be the best bet in this industry. Transit price is extremely unpredictable. Just in the last couple years prices for raw transit has shot down up to 60%. However, companies still in contracts with transit providers, unfortunately are stuck with their old prices until their contracts run out. So, some companies may be able to drop their prices if they are able to renegotiate their contracts. On the other hand, power/cooling costs are always increasing. These increase at a steady rate, at 1.5%-2.3% annually. Really, when it comes down to it, the only thing the industry can really rely on is the cost of power increasing. The rest is extremely unpredictable.

TLDR - Yes it's absolutely fine for prices to be increased, but you can't put an exact number on the annual increase. Some years it may be 1%, some it may be 30%. Also, some years the prices may drop, if provider renegotiates a transit contract. There's really no simple answer.

Lee · October 2020

If cPanel had an inflation-linked increase policy nobody would be concerned about the cost today compared to 15 years ago when it was the same as it was last year before the price increase.

The Plesk increases have not been that bad.

Whilst a lot of the lowend providers are moving to DirectAdmin, it is to preserve the low prices they were able to offer before the cPanel increase. My worry about that is that the exact same position is being created again if any significant price increases at DA come along. Whilst they are saying the all the right things about not doing it, you can't rely on any service provider you are reliant on not to do the unexpected.

InceptionHosting · October 2020

@Lee said:
If cPanel had an inflation-linked increase policy nobody would be concerned about the cost today compared to 15 years ago when it was the same as it was last year before the price increase.

The Plesk increases have not been that bad.

Whilst a lot of the lowend providers are moving to DirectAdmin, it is to preserve the low prices they were able to offer before the cPanel increase. My worry about that is that the exact same position is being created again if any significant price increases at DA come along. Whilst they are saying the all the right things about not doing it, you can't rely on any service provider you are reliant on not to do the unexpected.

My issue with the price increase is not the increase, I totally get it, if they wanted to do compounding inflation for 15 years and settle on a new price based on that I would get it.

The issue is they did that and then also added a premium per customer making the price essentially unlimited. In same cases the rise was thousands of percent higher.

Lee · October 2020

@AnthonySmith said: The issue is they did that and then also added a premium per customer making the price essentially unlimited. In same cases the rise was thousands of percent higher.

I agree they took it too far, but then you are not dealing with a company anymore, it's an investor looking to maximise returns.

SpryServers_Tab · October 2020

@AnthonySmith said:

@Lee said:
If cPanel had an inflation-linked increase policy nobody would be concerned about the cost today compared to 15 years ago when it was the same as it was last year before the price increase.

The Plesk increases have not been that bad.

Whilst a lot of the lowend providers are moving to DirectAdmin, it is to preserve the low prices they were able to offer before the cPanel increase. My worry about that is that the exact same position is being created again if any significant price increases at DA come along. Whilst they are saying the all the right things about not doing it, you can't rely on any service provider you are reliant on not to do the unexpected.

My issue with the price increase is not the increase, I totally get it, if they wanted to do compounding inflation for 15 years and settle on a new price based on that I would get it.

The issue is they did that and then also added a premium per customer making the price essentially unlimited. In same cases the rise was thousands of percent higher.

Yes I agree with this. cPanel should take a page out of Plesk's book and what they did with Solus.IO. They actually took the customer complaints to heart and made a change. They not only cut their pricing in half, but the put a cap on it. Any node over 64 cores is only billed at the 64 core price.

Lee · October 2020

@SpryServers_Tab said: They not only cut their pricing in half, but the put a cap on it. Any node over 64 cores is only billed at the 64 core price.

Yeah, not sure about that. Which providers do you know that are actually using Solos.io? Exactly. So they have reduced the price to pull providers in, they will go back to the original position on pricing eventually.

SpryServers_Tab · October 2020

@Lee said:

@SpryServers_Tab said: They not only cut their pricing in half, but the put a cap on it. Any node over 64 cores is only billed at the 64 core price.

Yeah, not sure about that. Which providers do you know that are actually using Solos.io? Exactly. So they have reduced the price to pull providers in, they will go back to the original position on pricing eventually.

Hostio, Oplink, ZNET.

I think now they've adjusted their pricing there will be more providers that will use them. If not switch to them, at least create a new product line using them in addition to other virtualization solutions.

Their pricing is lower than OnApp, VMWare or RHEV. While it still may not cut it for many lowend providers, I think it will definitely open it up to a lot more providers. I don't see them going back to their original pricing right away. Yeah, I'd expect their prices to increase over time, but they'd lose their clientele if they just went right back to their original pricing after gaining a decent portion of the market share. It would come across as deceptive and it would ruin them.

seriesn · October 2020

@Lee said:
If cPanel had an inflation-linked increase policy nobody would be concerned about the cost today compared to 15 years ago when it was the same as it was last year before the price increase.

The Plesk increases have not been that bad.

Whilst a lot of the lowend providers are moving to DirectAdmin, it is to preserve the low prices they were able to offer before the cPanel increase. My worry about that is that the exact same position is being created again if any significant price increases at DA come along. Whilst they are saying the all the right things about not doing it, you can't rely on any service provider you are reliant on not to do the unexpected.

00> @SpryServers_Tab said:

@Lee said:

@SpryServers_Tab said: They not only cut their pricing in half, but the put a cap on it. Any node over 64 cores is only billed at the 64 core price.

Yeah, not sure about that. Which providers do you know that are actually using Solos.io? Exactly. So they have reduced the price to pull providers in, they will go back to the original position on pricing eventually.

Hostio, Oplink, ZNET.

I think now they've adjusted their pricing there will be more providers that will use them. If not switch to them, at least create a new product line using them in addition to other virtualization solutions.

Their pricing is lower than OnApp, VMWare or RHEV. While it still may not cut it for many lowend providers, I think it will definitely open it up to a lot more providers. I don't see them going back to their original pricing right away. Yeah, I'd expect their prices to increase over time, but they'd lose their clientele if they just went right back to their original pricing after gaining a decent portion of the market share. It would come across as deceptive and it would ruin them.

Well let's wait till they start charging per clients as well, on top of VM.

Some smart ass in a board full of directors endup suggesting this.

Janevski · October 2020

@vpsgeek3333 said: It is not possible for us, living in capitalist economies, to prevent price increase.

How about not giving unsustainable prices in the first place, only to attract custommers, that you are now going to dissapoint?

Lee · October 2020

@Janevski said: How about not giving unsustainable prices in the first place, only to attract custommers, that you are now going to dissapoint?

Careful, you are beginning to sound like me.

vpsgeek3333 · October 2020

@Janevski said:

@vpsgeek3333 said: It is not possible for us, living in capitalist economies, to prevent price increase.

How about not giving unsustainable prices in the first place, only to attract custommers, that you are now going to dissapoint?

I agree that pricing should not be unsustainable but a 5x-10x price increase overnight is going to hurt any business

coolice · October 2020

Special Opinion: We are at industry where specs are going up and prices going down you got to add more to your product/service (to make it slightly better) to keep the price the same, you can increase the price only if you make it a lot better....

Example for hardware 2013 we payed more per 120GB SSD than what we pay now for per 1920GB, all that is passed to the customers

Hosting Industry Software: How much do you think is a fair price increase per year?

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