Bluehost.com

Thu Nov 26 01:54:55 UTC 2015

The bottom line is the value/price ratio. We should all be working to add
value. By any means necessary.

The pitfall of low priced "services", is that it's hard to balance the
support level and lower price for services. 

If Bluehost and lower end web hosters can completely do away with the
support aspect, certainly SAAS can scale. But if a significant part of your
value proposition is support, it's real hard to get down this low if any
human is ever involved, and if you pay a living wage to your workers. I
really expect at the ultra low end you have to be willing to do away with
live support, and just provide a product that works....with no support. 

Would people want to buy a web host for $3.95 but if they engage support pay
$15/hour for it? Perhaps that would work... but I think the value
proposition gets skewed in this sense. Those customers paying this little
likely needs support in a variety of ways. The challenge is to do it all
right, so they don't... 

I agree with Bob, more likely they are subsidizing costs with investment and
hoping to provide a profitable model in the future with enough market share.

Bottom line, is the industry needs to be increasing value, because the flip
side.... working for no profit, surviving off investment only... there's no
end-game. You see this cycle time and time again as market share is grabbed,
then underperforming companies are rolled up. In this process value is
destroyed. 

Ultimately this is also why it's extremely damaging for investors to
constantly invest in companies that don't make a profit, and don't provide a
successful economical model for the services/products provided. These
companies largely live on investor money, lose money, and in their wake
destroy value for the entire industry. Of course the end-game for the
investors is to make money... I'm always surprised how strong
investment/gambles are for non-profitable companies. I guess there is no end
to those with too much money that have to place that money somewhere. As the
rich get richer, there will only be more dumb money cheapening the value
proposition. After all, who needs value when you have willing investors. 

Bottom line is that if it's not worth doing... then maybe it should not be
done. Maybe the race to the bottom is not worth it. Maybe investments that
lose value for an industry should be limited. 

The giant pool of money is now weaponized. 

-Kiriki

-----Original Message-----
From: NANOG [mailto:nanog-bounces at nanog.org] On Behalf Of Bob Evans
Sent: Wednesday, November 25, 2015 5:20 PM
To: Robert Webb
Cc: NANOG
Subject: Re: Bluehost.com

For an ISP type service - it's almost impossible the make it up in volume
- all you need is one phone call to cost you $10 in support on a $3.50
service. With that many customers you can imagine how many call to just ask
what happened or vent after the event is over.

I founded a cable modem business prior to docsis standard. Call center with
150 people in it. People would call for help with their printer just because
we answered the phone. So support for a $3.49 web service must make
compromises somewhere in an attempt to reach profitability.

I know of 3 very big ISPs - all barely making money for years. Providing
crummy service , priced cheaply and expecting to make it up in volume.
Their solution was to merge and lose money together. Still providing a
lowball price for service , they then took the profitable parts of the
business and sold those to others so they can re-org and improve cash
momentarily. The re-org produced the same low prices and crummy service.
So it's a cycle some people play just to win money from hedge funds,
investors and finally the public. What do they call it when one keeps doing
the same thing over and over again expecting a different result ?

Low priced services are difficult to make profitable - if you drove your car
the way most low priced business services operate you would have a car that
top speeds at the minimal freeway speed, wouldnt carry a a spare tire, drive
around until the empty light turns on and carry as little insurance as
possible. - Gee, come to think of it, I've been in an airport shuttle van
like that in new york.

Thank You
Bob Evans
CTO

> However, with thousands more users at that price point, you would 
> think the income would be plenty for better services.
>
> Who makes more, the store with smaller quantities at higher prices or 
> the store that sells more bulk at lower prices? Perception of value, I 
> believe, wins.
>
> Robert
>
> On Wed, 25 Nov 2015 16:00:37 -0800
>   "Bob Evans" <bob at FiberInternetCenter.com> wrote:
>> Yes, I agree with you Joe - a hasty generalization,  as "you get what 
>>you  pay for" doesn't really apply to as many goods in the same way it 
>>does to  almost all services. However, a $3.49 web site service should 
>>have be a  good first clue.
>>
>> Thank You
>> Bob Evans
>> CTO
>>
>>
>>> Walmart has cheap prices so "you get what you pay for."??
>>> Hasty generalization but I can't disagree 100% with your opinion on 
>>>this  one.
>>> I am learning about the non-profit world of IT and the challenges 
>>>are all  around me. :)
>>>
>>> --
>>> Later, Joe
>>>
>>> On Wed, Nov 25, 2015 at 12:27 PM, Bob Evans 
>>><bob at fiberinternetcenter.com>
>>> wrote:
>>>
>>>>
>>>> Gee, for $3.49 for a website hosting per month , it's a real 
>>>>bargain.
>>>> While the network person inside me says, Wow that's a long outage.
>>>>The
>>>> other part of me is really wondering what one thinks they can 
>>>>really  expect from a company that hosts a website for just $3.49 ?  
>>>>Such a  bargain at less than 1/2 the price of a single hot dog at a 
>>>>baseball  stadium per month. That price point alone tells you about 
>>>>the setup and  what you are agreeing too and who it's built for. 
>>>>Goes along with the  ol'
>>>> saying, "you get what you pay for."
>>>>
>>>> If they are down for 10 hours a month out of the average 720 hours 
>>>>in a  month - thats a tiny percentage 1-2 of the time it's 
>>>>unavailable - in  service terms of dollars it's roughly a nickel 
>>>>they credit each  customer.
>>>> Do I need more coffee or is my math wrong about a nickel for 10 
>>>>hours of  website hosing ?
>>>>
>>>> However, maybe that is all many companies /sites really need. In 
>>>>which  case, it should be easy enough to build in backup yourself 
>>>>using two  cheap  hosing providers and flip between them when the 
>>>>need arises. Or pick a  provider that manages their routing well and 
>>>>works with you quickly,  but,  you'll have to pay more for that.
>>>>
>>>> Yep, the math spells it out -  "you get what you pay for."
>>>>
>>>> Thank You
>>>> Bob Evans
>>>> CTO
>>>>
>>>>
>>>> > remember folks, redundancy is the savior of all f***ups.
>>>> >
>>>> > :)
>>>> >
>>>> > On Wed, Nov 25, 2015 at 2:21 PM, JoeSox <joesox at gmail.com> wrote:
>>>> >
>>>> >> I just waited 160 minutes for a tech call and the Bluehost tech
>>>>told
>>>> me
>>>> >> he
>>>> >> was able to confirm that it wasn't malicious activity that took
>>>>down
>>>> the
>>>> >> datacenter but rather it was caused by a "datacenter issue".
>>>> >> So my first thought is someone didn't design the topology
>>>>correctly
>>>> or
>>>> >> something.
>>>> >> Some of our emails are coming thru but Google DNS still lost all
>>>>of
>>>> our
>>>> >> DNS
>>>> >> zones which are hosted by Bluehost.
>>>> >> At least the #bluehostdown is fun to read :/
>>>> >> --
>>>> >> Later, Joe
>>>> >>
>>>> >> On Wed, Nov 25, 2015 at 10:04 AM, Stephane Bortzmeyer 
>>>> >> <bortzmeyer at nic.fr>
>>>> >> wrote:
>>>> >>
>>>> >> > On Wed, Nov 25, 2015 at 08:41:55AM -0800,  JoeSox 
>>>> >> > <joesox at gmail.com> wrote  a message of 9 lines which said:
>>>> >> >
>>>> >> > > Anyone have the scope on the outage for Bluehost?
>>>> >> > > https://twitter.com/search?q=%23bluehostdown&src=tyah
>>>> >> >
>>>> >> > The two name servers ns1.bluehost.com and ns2.bluehost.com are
>>>> awfully
>>>> >> > slow to respond:
>>>> >> >
>>>> >> > % check-soa -i picturemotion.com ns1.bluehost.com.
>>>> >> >         74.220.195.31: OK: 2012092007 (1382 ms) 
>>>> >> > ns2.bluehost.com.
>>>> >> >         69.89.16.4: OK: 2012092007 (1388 ms)
>>>> >> >
>>>> >> > As a result, most clients timeout.
>>>> >> >
>>>> >> > May be a DoS against the name servers?
>>>> >> >
>>>> >> > bluehost.com itself is DNS-hosted on a completely different 
>>>> >> > architecture. So it works fine. But the nginx Web site replies
>>>>502
>>>> >> > Gateway timeout, probably overloaded by all the clients trying
>>>>to
>>>> get
>>>> >> > informed.
>>>> >> >
>>>> >> > The Twitter accounts of Bluehost do not distribute any useful 
>>>> >> > information.
>>>> >> >
>>>> >>
>>>> >
>>>>
>>>>
>
>