Re: [bitfolk] How much should BitFolk allow you to owe us be…

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Author: Andy Smith
Date:  
To: users
Subject: Re: [bitfolk] How much should BitFolk allow you to owe us before we suspend your service?

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Hi Paul,

Thanks for your input.

On Tue, Jun 19, 2018 at 05:28:02PM +0100, Paul Tansom wrote:
> OK, I'll start the bidding. I have no idea of your customer base, but believe
> you have personal as well as business customers.


Yes this is the case, but it is hard to be get specific. My sense is
that there are more personal hosting customers than business
customers, but the businesses on average spend more. I also suspect
that there are quite a few people running VPSes for a business yet
they have signed up using only personal details.

One thing that I initially found quite shocking — but after ~11
years I have come to terms with — is that mostly customers ignore me
unless they are forced to respond. So they won't provide details of
their business, and they won't respond to questions about whether
the contract is with them personally or with an incorporated entity.
I can spend a lot of time trying to get answers out of people, or I
can accept that as long as they pay the bills and I manage the
liability¹, I should just let it go.

So the short answer is I can't easily quantify what is personal and
what is business other than "some personal are actually business".

I do of course know what they tell me, so yes it would be possible
to have different defaults for (those that declare they are an
incorporated entity) vs. (those ordering in their own name i.e.
assumed personal hosting customers), with the possibility for the
customer to choose different options.

> So I would suggest a personally hosted server would prefer a known
> quantity of no overcharge, whereas a business customer would
> prefer not to be cut off, at least for a certain amount.


It's an interesting suggestion, but what I fear about it is the
complexity for the customer. For the personal hoster it seems okay
because the default state is restrictive, but the default state for
the business is unlimited. So that has to be explained somewhere
that I know the customer will see it. And when it comes time to a
billing dispute they can't be able to say that it wasn't obvious
enough.

On the other hand, it does tend to be easier to get businesses to
pay bills, indeed.

> I'm not quite sure how much complication this would have, but may
> be worth considering (along with a configurable option to adjust
> this - which I'm sure you mentioned and I've snipped to keep the
> quoting shorter!).


I haven't gone into all the optional settings which are possible
because it's a nearly infinite set, and I feel like I first need to
set the defaults for those who make no conscious choice.

The only thing that I've mentioned that I am really averse to is
throttling (traffic shaping).

> Amount wise, how practical is it to work with a percentage of the included
> transfer - say 10%? This means that on a base package (£89.90 annual cost with
> 1,000 GB transfer) you have a risk of 100 GB transfer costing 100 * £0.06, so
> £6. 10% extra should cover the usual 'oops' overuse with a bill that isn't too
> horrendous in relation to the annual cost. It would equate to £72 per year if
> it happened every month, which is approaching double the annual cost - if that
> puts what initially seems a small figure into context.


The bills for overage are always calculated every 30 days because of
being billed in arrears and being a form of credit, so you are
proposing a limit of £6+VAT before some intervention happens, yes?

If the customer has already been in touch to say they are aware of
the overage and will pay the bill then there is no intervention. If
the customer asks for their network to be turned off then we can do
that. It's only where there is no response by the customer that the
intervention would be to turn off their network until they do
respond and say what they want to happen.

> Having just thrown those figures out, that probably isn't unacceptable across
> the board. I'm tempted to suggest 20%, but that is largely based on the figures
> from your two customers, and awkward though it may be, I'm reluctant to suggest
> basing something round two outlying cases.


I mentioned them only to show that although overage is generally
rare, there are a minority of customers who regularly use it. The
typical customer struggles to transfer more than a couple of GB per
month and so I can imagine that it is hard to put yourselves into
the mindset of someone who regularly intentionally moves terabytes. It
would be easier (although less lucrative) for me if they did not go
into overage, but they have resisted reasonable efforts to convince
them to commit to a higher amount, so I just keep taking their
money.

Since there is going to have to be a way to say that "yes, I am okay
with potentially higher overage bills than £x", I can certainly have
another go at telling them that they will need to enable that (or
commit to more).

A lot of people are surprised that a base spec VPS can actually push
about 80Mbp/sec. Which is about 25 terabytes per 30 days. In each
direction.

> If you are wanting to be radical about it you could include a clause that
> automatically bumps up the charged transfer amount after three consecutive
> overcharge months, possibly back down after three consecutive under usage if
> you feel the need (that possibly only being for those that have been bumped up
> rather than a general rule).


I have learned that most customers crave simplicity… :)

Cheers,
Andy

¹ Basically in terms of debt recovery, for my case if it's a
UK-based incorporated entity then my chances are quite good
because of the statutory law regarding late payment of commercial
debts. In any other case it is prudent for me to be very averse to
offering credit of any kind.

--
https://bitfolk.com/ -- No-nonsense VPS hosting