Colocation Price Hikes at Redbus

As Redbus hikes its colocation prices, will other providers follow suit? Or is this just a London phenomenon?

Rich Miller

January 12, 2006

2 Min Read
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Since the bubble burst in 2000-2001, pricing for most hosting services has trended lower. That's certainly true for shared hosting, where accounts with 5 gigs of web space and 250 gigs of monthly transfer are available for $4.95 from Go Daddy and 1&1, with Yahoo close behind. Discount dedicated servers have been the hosting growth area in recent years, with servers available now for $49 and lower.

Today there was an interesting piece of news at Web Host Industry Review, which noted that the UK's Redbus has increased colocation prices in the wake of its merger with Telecity, apparently from 350 pounds a month to 550 (about $967 a month in US dollars). On one level, this seems to be a product of natural consolidation, since Telecity's prices were higher than those at Redbus to begin with. But some analysts are reading more into this.

Tim Anker of the Colocation Exchange believes the Redbus move could foreshadow price hikes for other providers:

"This is a seismic event and shifts the whole playing field with respect to pricing, I'm afraid the halcyon days of flexible terms and incentives for buyers are well and truly over."

Anker says Redbus hosting  customers will pass their increased costs along to customers. That's not an easy thing to do nowadays, given the competitive pricing among resellers and shared hosting providers. It's also important to note that colo space in London is reportedly in short supply, which should (in theory) allow for price hikes if demand remains high.Princing tends in the London market don't necessarily translate to higher colo prices in markets with available space. Anker believes other European markets may see higher pricing as well.

Nonetheless, as data center space continues to fill up in major markets, it will be interesting to see whether the Redbus hikes are reflected elsewhere.

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