Recursive Refunds

We had our first downtime (Ever) with Wachahost today. It was a pretty unique experience in itself, mostly because I am a pretty demanding guy. It is ironic that I used to work for an ISP as a tech, and I used to think to myself, “Man these people are crazy if they think I can fix this issue in 30 minutes”. And now when I open tickets with my datacenter, I am likely the most demanding guy out.

In anycase, downtime sucks regardless. And it really gets me thinking that when we go down, we take a bunch of businesses down with us. We don’t currently offer a 99.999% guarantee with refunds. And that’s not because I think we can’t go a month without downtime either. Infact as I pointed out above, it was our first downtime ever. But the sad fact is that we are not at a stage yet as a business, that we can go a whole month with no revenue. So as much as I would love to offer that guarantee, and stick by it, economically we can’t. I know some people will smack me over the head for revealing that, and they will just say to me, “Just offer it, and the majority of people won’t take up the offer”. But that’s not the type of person I am. If I say that I will give you 99.999% uptime, then if that did not happen, I would offer an automatic refund, I wouldn’t wait for people to have to go through a huge long drawn out process to get their monthly hosting fees back.

Whether we offer a guarantee or not is really irrelevant sometimes when you have service breakdowns. If it is out for a great length of time, sometimes there really is no alternative but to offer them a refund for that portion of the month.

Something that has come up alot lately, is not just a refund of service lost, but a refund of business lost. Say you run an ecommerce store, and it is heavily trafficked. I’m not just talking a one man business, but a store that gets sales hourly. Or it could even be a PPC landing page that you are throwing hundreds of dollars at per day. If that goes down for a few hours, you have now lost for 1. Advertising costs. and 2. Lost revenue. If you were doing PPC you would have lost a bunch of money doing Adwords or what have you, only for them to be taken to a page that is timing out. Not only that, but you have lost your profit that you would have made from that campaign aswell.

Who pays for that?

In reality, big businesses should not be with a shared hosting provider anyway. I can make all the guarantees I want. But it only takes one idiot with a vulnerable script, or one person to peeve off the wrong people and invite a DDoS attack, and things go down.

But when you do lose business like that. There is not many businesses nowadays who will fork out for lost revenue. Infact I would be surprised if any do. And that’s what really peeves me off. That people are so willing to guarantee 99.999% uptime. But they are only willing to reimburse you a few dollars for your hosting. You could call it not standing by your product, in reality it is probably just good economics.  In anycase, before you go thinking that someone offers perfect uptime and will reimburse you if anything goes wrong, just think, if they actually do go down, how much do you stand to lose.

Final Note :

Alot of people offer 99.999% uptime and crap like that. And I have come across many a person who hasn’t a clue what that actually equates to. 99.999% uptime is actually 5 minutes a YEAR. Yes a YEAR. This is unscheduled though, ofcourse things need to be taken offline to install updates etc. Trust me, not alot of “online” businesses have less than 5 minutes downtime a year. Certainly not things like Shared hosting with, as I said above, it only taking one idiot to take down a whole bunch of customers.

As a comparison, if you are only offering 99% uptime. That is 7 hours of downtime a MONTH. Makes a huge difference. Although alot of people just take on a bunch of nines to make it look big. But the “5 nines” concept is one of the biggest in IT.

Here is the full availability table anyway :