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Cost of running large website?

Hi Joel & friends,


I could really use your advice!

I'm starting my own business, targeting large content providers (i.e. popular websites). I'm trying to figure out their monthly bandwidth bill. My aim is to position my service at a similar price range so they see something they're used to.

I know JoelOnSoftware.com recieves a lot of hits per month so I figured this would be an appropriate place to ask. How much, on average, do you think content providers, getting 800,000 - 1 million hits per month, would expect to pay for a monthly service targeting those same users on their behalf?

CAVEAT: I'm sorry, but I'm sure you will understand that I cannot divulge any specific details about the nature of my business :)

Any and all help will be appreciated.

Thank you,
Gili
Gili Send private email
Friday, September 17, 2004
 
 
Joel,

It would be nice to have the ability to rename the title of a post. Right now I'd love to be able to rename my post "Help: targeting large content providers" :)

There's a lot in a subject line it seems.

Gili
Gili Send private email
Friday, September 17, 2004
 
 
You should be able to get 1,000 gigabytes of transfer on a dedicated server (1 terrabyte) a month for $200 or lessWatch the fine print for overage charges in case you're slashdotted.

You should be able to get a 10Mbps unmeterd account for $500 or so a month.
www.MarkTAW.com Send private email
Friday, September 17, 2004
 
 
If that's what you're asking. I admit I didn't read closely, but I'm not sure what you're asking.
www.MarkTAW.com Send private email
Friday, September 17, 2004
 
 
Mark,

Are you saying that content providers with 1 million hits per month still only pay $200 USD per month? That is rather surprising. The next question then is whether most content providers are aware of these low prices or can I afford to charge them more and they'd likely buy into this?

Taking this discussion in a slightly different direction: If bandwidth is so cheap, why do banner advertisers charge as high as $7 for 1000 hits for full-page ads? Crunching the numnbers you mentioned above, how could such a practice be mainstream and (seemingly) acceptable to advertisers if the underlying bandwidth is so cheap?

To me, ad banners is little different than handling web content. One would expect the prices to be similar... Is there more to this formula I am missing out on? How do the two differ on a business level?

Thank you,
Gili
Gili Send private email
Friday, September 17, 2004
 
 
==>Are you saying that content providers with 1 million hits per month still only pay $200 USD per month? That is rather surprising

In terms of the cost of running a large site, I'd have to say that the "bandwidth bill" is likely the smallest part of the overal cost.

Friday, September 17, 2004
 
 
A content provider is perhaps very interested in uptime and reliability. Backup servers / load balancers may be important.

The bandwidth use/cost is only one part of the infrastructure then.
Dan74 Send private email
Friday, September 17, 2004
 
 
Is your original question referring to hits or page views? (Each page view will typically generate multiple hits, one to get the HTML page and a bunch more to load images, etc.)

Even if you're talking 1 million page views a month, that's hardly a large Web site. Personally I'd want to set the threshold for "large" Web sites at around 1 *billion* page views a month, but that's just a seat-of-the-pants guess at a reasonable partition point.

$200 a month for 1 million hits might even be on the high side. If each hit generates 50K of data, that's 50GB of bandwidth, which is probably $100 a month or less.

Ad banners are *totally* different from Web content. The purchaser of a banner, sponsorship, or whatever isn't paying for bandwidth, he's paying either for access to an audience or for clicks from members of that audience. What's that worth to him? It depends on how many sales he generates from it. (In some cases they might be aiming for intangibles like "brand awareness", but let's keep things simple.) Let's say you put your ad in front of 1 million people, 0.1% of them (1,000) click on it, 10% of those (100) buy your product, you make $100 profit per product. That ad generated $10,000 in incremental profit for you. The ad space, loosely speaking, is thus "worth" $10,000 to the advertiser.

Think about advertisers who buy time during the Super Bowl. (Admittedly this may not be a great investment for most companies, but bear with me.) Do they pay millions of dollars for a 30-second spot because it actually costs millions of dollars to broadcast it? No, broadcasting a commercial during the Super Bowl doesn't cost any more than broadcasting one on cable at 3am, but they pay it because they know (or at least think) there will be millions of people watching and it's worth $1 per viewer or whatever to get their message out.
John C.
Friday, September 17, 2004
 
 
Rerearding MarkTAW's reply, I just realized he didn't say $200 for 1 million hits as I incorrectly implied, but $200 for 1 terabyte. Mea culpa.
John C.
Friday, September 17, 2004
 
 
In addition to dedicated web server, you may need also a separate machine for your database and/or mail server (if you have a lot of mail accounts).

But not less important, you need to invest into highly skilled professionals which will install and support your system, and monitor and protect it from attacks.
Evgeny Gesin Send private email
Friday, September 17, 2004
 
 
Yes I'm saying you can have a server that serves up a terrabyte of data a month for $60 to $200 depending on the level of hand holding you want from the hosting company/server farm. That's 33 gigabytes a day on average.

If you're expecting a lot of traffic, and if it comes in waves, you may want to load balance it to ensure that you have the uptime and response time your customers will expect. If you're offering a free software download, or have lots of graphics (perhaps you sell stock photography), then your bandwidth per-person will skyrocket.

It's also understood that these are typically cheap celeron boxes with a single hard drive. You're not even getting RAID protection at this level, much less a hot failover server.

Banner impressions aren't charged based on bandwidth, that's a completely different business model and bandwidth is a tiny part of the equation for them.
www.MarkTAW.com Send private email
Friday, September 17, 2004
 
 
Joel on Software is running on two big Dell servers -- about $10,000 worth of hardware which we own. The servers are colocated at Peer 1 Network (http://www.joelonsoftware.com/articles/Peer1.html).

The site gets about 2.5 million hits a month from 164,000 unique visitors, with 1.4 million page views.

Peer 1 has kindly donated the rack space and the bandwidth, in exchange for the publicity it generates and because they like Joel on Software, so there is no cost for that, but if I were paying list price it would probably be $500 - $1000 per month.

There are much cheaper ways to host a website, although not as reliably and without as much control.
Joel Spolsky Send private email
Friday, September 17, 2004
 
 
Whoops, wrong data, I was looking at the report for the discussion groups ONLY.

Joel on Software English + Discussion Groups got 7,825,211 hits in August, representing 3,876,304 page views and 341,033  unique visiters. There are an average of 60,752 unique visitors per day on these two sites.

This doesn't include the foreign language translations.
Joel Spolsky Send private email
Friday, September 17, 2004
 
 
So here is my problem...


I'm creating a service which is very bandwidth intensive as well as requiring consistent software development. I'm going to be hosting the customer's content on the one hand and advertise their website in the other but this requires me to develop the software for them (and constantly improve it over time). The problem is that while it might be reasonable for them to expect to pay $130 per month for bandwidth costs, the software-development costs far exceed the bandwidth costs and even if I live out of my basement and pay myself $1000 per month for software development, I will still have to charge them $1130 per month for the service. Obviously this development cost would decrease as I got more and more customers, but right now I've got zero.

My feeling is that they won't go for it. Am I wrong? What is a reasonable amount of money content-providers of this magnitude would expect to dish out toward marketing? I'm hoping they regularily dish out thousands.

As one of the previous readers pointed out, companies spend in relation to return on investment (ROI) but in the case of my particular service, ROI calculations won't be available anytime soon because of the technical difficulty of working this into the product. Yeah, I know it's ugly but there it is :)

What is your advice?

Thank you,
Gili
Gili Send private email
Friday, September 17, 2004
 
 
Currently most companies don't chase their marketing campaigns on unproven out-sourced projects. Unless some agency or some marketing director is willing to vouch for it (put their neck on the line, or show past case studies why they figure it should work for you) few companies are willing to do it. The norm is no, you won't find a client like that. The exception is there are a few trail blazers. The problem is it's hard to get their attention. You have to go through agencies. You have to have a track record. You shouldn't be doing this from the basement unless in your day job you manage quarter of a million dollar accounts and you have clients who TRUST you.
Li-fan Chen Send private email
Friday, September 17, 2004
 
 
Joel, that's a lot of hits! :-D
Li-fan Chen Send private email
Friday, September 17, 2004
 
 
When I read Joel's first post, I was like... "you need two servers for 1.4 million pageviews a month!?" We've served well over 2 million a month w/out any problems - all dynamic generated with PHP.  Now, over 7 million, that's a different story ;)
saberworks
Friday, September 17, 2004
 
 
One of the servers is a hot backup.

For reasons which are too complicated to explain and having to do with (what else) DLL Hell, the hot backup is running the new discussion group software while the main server runs everything else.
Joel Spolsky Send private email
Friday, September 17, 2004
 
 
Aha. So if the hot swap is needed <click> CQ? CQ?
Makes sense to get something for the power bill 8-))
trollop
Saturday, September 18, 2004
 
 
Gili,
you should show your potential customers what you already offer - product or/and service. If you want customers to pay for development of your services/products, this is more complicated.
ROI... hmmm. How is your service differ from others, and what's your previous success offering ROI... It's difficult to estimate without knowing details of your service.
Evgeny Gesin Send private email
Saturday, September 18, 2004
 
 
Part of the issue is the quality of the bandwidth. How many different pipes does the bandwidth come in on? From how many different providers? Which providers are they (some offer 'higher quality' bandwidth than others, or at least have traditionally done so)? How much spare capacity do they have? (any host that offers 1 TB of bandwidth is probably overselling, ie they wouldn't have enough capacity for all of their users to use that much). Do they all come into the same router, or are there dual points of failure?

I think major web sites who have to guarantee 100% uptime would probably be going with one of the more expensive providers like RackSpace ( www.rackspace.com ) so you might find it more useful to compare with their prices. I think it's fairly unlikely that they would be paying $200 for 1000 Gb of bandwidth. Or they'd be co-locating their servers with someone like Peer1 who Joel mentioned earlier.

You'd probably find some better help on a forum like Web Hosting Talk ( www.webhostingtalk.com ) if you still need more info!
James U-S Send private email
Saturday, September 18, 2004
 
 
"For reasons which are too complicated to explain ..."

Damn, just when it gets interesting ...
Just me (Sir to you) Send private email
Sunday, September 19, 2004
 
 

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