They have a bandwidth pooling agreement.

As for SoftLayer, their goal is quite simply to generate more sales channels. That's why most of the big DCs tolerate reselling and even encourage it. Like I said, the business model works to a certain point but then totally breaks down as the risk gets higher.

Except they don't. Because it's impossible.

Bandwidth isn't something you can just oversell without consequence; if you have a massive overage from people actually using what they are paying for then you are probably out of business.

See, I think what happened here is that 100tb had a massive overage and found out that SimpleCDN was one of their big players and they are frantically trying to get the big guys off their bandwidth pool so that they can hedge against the overage while already having SimpleCDN's money. This would fit into my projections for the original business model of 10tb.com before they became 100tb. At least with 10tb there was some sign of it being at least somewhat realistic; with 100tb there is no way.

Or... let's think of it this way:

Say you buy a server from 100TB for $201.95/mo (baseline server with 100TB bandwidth). This works out to being ~303mbps 95% on a typical burst pattern (and likely much higher for streaming traffic!). The server probably costs $100/mo just to run, leaving $101.95 for bandwidth (in this example we're not making any profit mind you!).

This means that your ~303mbps 95% breaks down to $0.33/mbps.

Not even BANDCON can hit that price point and they go really, really low.

This business model does not make sense to me. There is very high risk and I see no way that they can hedge against overages if everyone actually opens up and uses all of their 100tb allotment. Maybe they are paying by GB instead of mbps but that makes no sense because then SoftLayer would be holding the bill and frankly I don't think they are that stupid.

So no, it's not possible to make up profit through volume on this when you keep in mind the risk you are hedging. It's just too much of a gamble for any sane business operator to even consider.

Why didn't you look at their business model directly? What you were getting would cost at least 5 times more directly from SoftLayer...

You know, posting followups on every site where this is being discussed makes you look like less of a victim...

I would like to hear what ditlev has to say about this, as the numbers behind 100TB never made any sense to me as a business model... how can they make any money selling for $10000 what SoftLayer directly charges $50000 for?

"Our 121 expert-approved articles are reliable and of world-class quality, rivaling the best printed encyclopedias."

Wow, 121 whole articles! Amazing!

Hurricane Electric sucks and is down more than you think. I used to colocate there, and it was a total disaster. HE is a provider which does not have a reliable UPS system (although they tote pictures of car batteries on their web site), infact their ATS failed (caught fire, I have been told) last year on two different occasions... which lead us to leave.

I would suggest looking into a different provider if you are using HE for anything.

Except it also attacks the http daemons on several models.

That analysis is old.

And, it only targets DD-WRT/OpenWRT/Tomato routers configured in the way described in the article.

Actually, the worm also exploits some vulnerabilities in the HTTP servers in some of these models.