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Traffic Pricing

09-24-2012, 10:26 AM

For a few months we've been testing the commercial impact that unusually low prices of additional traffic (per TB) had on dedicated servers in our subsidiaries. We changed the price to €0.99, we then wanted to see if that had any influence on sales.

The result:
The fact that we offer additional traffic for such a low price had no impact on the amount of sales nor on the turnover expected from normal/individual clients. But from January 2012 we started getting more and more clients who've chosen OVH just because the price was €0.99 per TB. This has also resulted from erroneous calculation of TB, due to the routers we're using. Cisco routers have turned to be not suitable for NetFlow and finding the bandwidth usage statistics. So, thanks to this bug, some clients consuming too much traffic find “0” in the monthly statistics in terms of TB. It was enough to produce the black hole effect absorbing the market of dedicated servers. Our global bandwidth has increased from 300 Gbps in September 2011 to 800 Gbps in September 2012!

We think that the proof of concept has been completed and we will rebalance the pricing. Where our competitors offer 12-15 EUR per TB we will offer €5.00 per TB instead of €0.99 per TB. The price is changing now.

At the same time, we are working with Cisco to fix these bugs in order to obtain true data relating to the consumption of our clients. And why not (finally) some statistics per AS to make nice graphics for each server and to see how much bandwidth it consumes, and to what destination network.

Within the 2013 range, on the level of subsidiaries, we will not be offering dedicated servers with TB but only with the guaranteed bandwidth for each server. Like in France, this will allow us to offer dedicated servers with high-quality bandwidth for a very low price. Also, to be different on the market and add value to our network. In fact, the OVH network again proves itself being capable of delivering large quantities of quality data and assuring a very important growth.