[asterisk-biz] Experimental/new VoIP rate search engine.

[Alex Balashov]

Nitzan Kon wrote:

> Servers are cheap. These days you can build a nice server
> well under $500. Colocating them is also cheap if they're
> in 1U form, and bandwidth is really not that expensive if
> you shop rates.

That really depends on the situation.  Sometimes colocation options 
present themselves at undesirable price breakpoints:  for example, if 
you're paying a per-U (per-machine) rate but have more than a few 
machines, you might get a much better per-U deal buying a whole cabinet 
or half-cabinet but have to be out that cost without enough machines to 
really justify it.  That kind of stuff.

Secondly, this is a low-margin business, and will only get more so. 
Minor-seeming expenses like power and additional servers can add up to 
an unacceptable per-port cost, and depending on the price breaks, you 
can experience a regression in gross margins as you grow further to a 
certain point.

Thirdly, the bandwidth is not cheap -- at least, not good bandwidth.

A G.711u call takes about 80 kbps on the inbound media stream and on the 
outbound one once framing, padding and L2/L3 headers are factored in, as 
you well know.  A decent server doing Asterisk can handle a few hundred 
calls, so with every additional server doing 300 concurrent calls you 
are driving about an additional ~25 mbps in sustained bandwidth!  I mean 
sustained, not burst below the 95th percentile.  If you are paying, say, 
$40/meg on your commitment, as opposed to burst overages, that's another 
$1k/mo to handle another 300 calls, plus the amortised expense of a new 
$500 server.

If you're doing usage as opposed to some sort of flat-rate subscription 
scheme, that presumably means you have high sustained concurrent usage 
if you want to make any money.  If the users are paying an average of... 
say, as much as 1.5c a minute, and you're paying, say, 0.9c wholesale 
(which is generally a very decent margin for an ITSP), and you're doing 
about 5 million minutes a month - which is generally quite ambitious for 
a small VoIP ITSP - then you're pulling in about $20k/mo.  But that's 
160,000 minutes/day, which seems to require an average of ~110 
concurrent calls to be up at any given time.

If your margins are that good (half a penny a minute) then you can 
probably afford to screw around.  Unfortunately, for most VoIP ITSPs the 
margins are much thinner, especially for wholesalers in domestic US48 
LD.  If you're making 1/10th of a penny, you're only doing $5k/mo on 5 
million minutes.  Out of that $5k you've got to pay your total colo 
expense, your marginal bandwidth cost on 110 calls (10+ meg commitment), 
power, salary, and all other business expenses.

$.001 is a lot closer to the margin many ITSPs are making than $.005.

> 
> From a user to server perspective, you can easily fit 1000
> users on a server, and probably more than that. The cost
> per user is less than 10 cents assuming a colo price less
> than $100/month. Even higher than that you're still talking
> a few cents more per user.
> 
> The only problem I found scaling is the need for some type
> of load balancing - and I'm taking your advice on that one
> (thanks!) and looking to put Kamailio in front of an array 
> of media servers. Once that's done and working properly, I 
> really see no reason why we couldn't scale to tens of 
> thousands of users by just adding more media servers as
> we need them. :)
> 
> One of the things I am sturggling with is how to get
> Kamailio to account for geographic location and divert
> a west coast user to a west media server rather than east,
> but I guess that shouldn't be too hard to implement 
> eventually. (maybe look at the IP address - or if possible
> with kam, just store an indicator in the database that will
> tell it what array of servers to divert to)
> 
> Anyway.. point being - servers are cheap, colo is cheap,
> and bandwidth is cheap and always getting cheaper. The
> cost of proxying media are negligble in the type of
> business model we run.
> 
> Again- a wholesale operation may very well find it makes
> more sense not to proxy the media since they don't have
> to deal with NAT and other such headaches anyway.
> 
> -- Nitzan
> http://www.comparevoipproviderrates.com/
> 
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-- 
Alex Balashov
Evariste Systems
Web    : http://www.evaristesys.com/
Tel    : (+1) (678) 954-0670
Direct : (+1) (678) 954-0671
Mobile : (+1) (678) 237-1775