Quote:
Originally Posted by Spudstr
When they oversell and bill out at 95th and get billed at the 90th percentile, and sell at 4/Mbps and their cost is slightly below. when you have 40+Gbps bandwidth your low margins make up for volume. a 3-4 dollar profit margin is the same if your selling for 15/Mbps. There are lots of variables involved and lots of different business models to go by. By the volume of bandwidth they were pushing i'm sure they were doing well for themselves.
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You aren't even taking into account their cost of corporate overhead, support, office space, other bills, power, physical space, etc.
Their products were priced at straight up $4-5/mbps so a 100mbps box was $400-500 with hardware included, even $4/mbps @ 90% isn't going to cover all their costs.