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11-11-2013, 09:57 PM
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Hi there!

You seem to be very good at insights on current hosting trends, etc.

What is your opinion on what is going on with OVH these days? Why have they stopped new orders and how can it ever be a good decision?

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11-16-2013, 02:13 AM
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The whole situation with OVH strikes me as nothing more than poor business decisions. They've always tried to be the cheapest host, and that's one of the reasons they were in a death spiral. At least they had enough sense to stop the madness, though it dragged on for much too long. They should have ended this long ago. I still remember when OVH made that money grab regarding IPv4 space a year or two ago. And that's all it was: a money-grab.

Cheap products/services also attract the worst customers, including the ones that will take advantage of you. And that's exactly what happened here. Something like that is Business 101, to be honest, so they should have known better.

It's almost hard to not have schadenfreude in this situation.
The old "I told you so."
Like Nelson from The Simpsons: "Ha Ha!"

Pick apart their email press release, and read between the lines...

The server offerings we provide are based on certain principles that make rental very interesting servers:
- No setup fee
- No commitment

- Monthly payment
- Very regular innovation
Up to 100,000 servers in our DCs we did not had particular problems with these principles. Sometimes manage growth, should be added a limitation to two new servers per month. Sometimes we added during installation costs few months. But overall the model works very good.
What's sad is they seem to have still not learned their lesson, as they're still defending the "principle" of it all. Well, the principles were stupid, when mixed with their other policies. It might be a big business with lots of revenue, and one might say I'm jealous or some such nonsense, but it's a crap business if it makes those kinds of bonehead decisions. I don't care about their size or revenue, as that stuff doesn't matter much. Profits matter. And I bet their profit margin is too thin, and thinning ever more, hence the situation.

Between 100,000 servers and 150,000 servers we felt that these principles began to cause problems level of turnover.

What is the turnover? The turn-over is when our customer who rents a server we decided to take a new always in our server to replace the old. This is not a problem if the old server was leased for 2-3 years and you can rent the Oldest in OVH 2-3 more years. But with 150,000 servers, the number customers that we relouent a new server after March-June month became the majority. And older servers find themselves too obsolete for sale.
At least they're being honest with customers. I give them credit for that.

Today we have 170,000 servers and from the implementation updates the range in early August, the turnover is still accelerated to become too large. The majority of deliveries not serve to make the turnover. It is enough book servers for new projects or for new customers. The delivery time for all became too much and we can say that the mechanics are
longer works.

170K on all servers already rent there no problems at all and no change expected. Everything runs smoothly and you do not change anything especially The problem is only for new orders new servers.

How to fix the turnover?

We think it is possible to find a mechanical allowing us to deliver all the servers in 1H managing 200,000 and maybe 300,000 servers. But this mechanics must be questioned.

We started to tinker with a few elements such as IP Failover, but clearly must go deeper. It has dozens of trails but if we start to change every day, an end here and by the end there, no one will understand anything.

So even if we do not have 10,000 servers loans be delivered (all lines combined together and all DCs) so we decided to make a "sold out" on all offers dedicated servers in France, subsidiaries in Europe as well as Canada and the USA. Orders that have been passed be delivered but we no longer taking new orders.
This "sold out" will allow us to take the time to analyze so deep sales in recent months and understand the behavior of each customer generated the turnover.
This is what I find amusing. Do the French not understand that people will take advantage of them, if given the opportunity? Is this a new concept to the people of France?


That's all this is. Just cancel the bad policy, end of story.

Then we will relist servers with a limited amount (lot 100 servers) and new principles and then rescan what happened. And so on until you find principles that will help:
- To deliver fast servers
- Offer very competitive offers
- Better customer loyalty to its server

In parallel, we are accelerating the rewrite API to v6 level domain names, emails the web hosting and dedicated servers. The same ManagerV6 level that will replace the V3 and V5 before the end of the year. Our order system will be reviewed before the end of the year for all services that we offer. We can propose a self-renew with the CB in Europe and Canada. In short, we take the "sold out" to put not the internal resources on growth but the consolidation of our back office and delivery involved in the mechanics of our offerings.
Meanwhile, if you have any new projects that you forced to lease new servers, do not hesitate to contact so that you can make an order to hand. We stock servers, but we do not want deliver it to continue to the turnover.
I've never, ever seen a business that was literally afraid of customers. That's how they're acting. Instead of handling the issue like an American business would do, they cower in fear. What the hell is that? I'm honestly dumbfounded by this.

We rely on your feedback to help us refine mechanics that should suit you and which will enable us to do our job without having to change the rules game every 6 months because it was 200K or 300K servers in our DCs. In short, this is a good time to discuss and exchange information and get the idea that no one has had previously ...

This is obviously an Engrish translation courtesy of Google Translate, as French is not one of the languages I know. While I'm not a typical American xenophobe, and view the world as a world community (especially friends and colleagues in Europe, from Lithunia to Greece to UK), I've never understood the French.

I really think it's a regional thing. That they even email customers purely in French language should tell you something about that company.

I honestly think this company is a victim of its own stupidity. What strikes me as odd is how they act as if they *must* only sell new hardware, and never older ones. Even something as simple as setup fees, coupled with contracts on newer hardware, would completely stop this shenanigans from its customers.

OVH is one of those crappy spammer havens, so again ... schadenfreude.

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11-18-2013, 05:00 AM
BalticServersArturas BalticServersArturas is offline
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Good analysis - you have come to the same conclusion as I did.

Another big factor, in my opinion, is that OVH is family-owned and does not have shareholders who would not allow such rash decisions.

BalticServers now has lots of orders from past or potential OVH clients because of that. That's all that needs to be said about how wrong that decision is.
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11-18-2013, 09:11 AM
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kpmedia kpmedia is offline
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Originally Posted by BalticServersArturas View Post
BalticServers now has lots of orders from past or potential OVH clients because of that.

Baltic Servers is a much better host anyway, especially when it comes to support and pre-sales, not to mention hosting plans. Companies like OVH don't really do this industry any favors, because of the ridiculous pricing and the slow support. Sometimes it's outright blunt/rude support. Almost nothing they do is how a company should operate, while most everything Baltic Server does is the opposite. The only thing OVH really had going for it is communication, but it means nothing if the business parts is so lousy.

It's nice to see others businesses finally have the ability to thrive in their absence. Let's see how long that lasts.

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