I rent one of my servers from LayeredTech. I initially chose them when W3Counter outgrew its last server as they were the only company I couldn’t find many negative reviews of that sold Opteron servers at a price I could afford for a site that, at the time, wasn’t charging anything. But they lost me as a customer after I got this last e-mail. Sent with the misleading subject “Dan Save $453.60″, it’s actually an announcement of an unprecedented price increase on existing service. It’s a mere $8 per server, but still something I’ve never seen done in the web hosting industry — prices change all the time, but once you get a customer, you never change the price on that customer.

Dear Dan Grossman,

We’re working hard to remain your trusted source for self-managed dedicated and on-demand, computing solutions. We appreciate your business and will always find ways to continue to provide you with the highest quality products and service offerings.

As part of that effort, we have reviewed our pricing structure in relation to a number of industry-wide changes and have determined that a modest across the board price increase is necessary. This price increase is a reflection of our rising expenses necessary to power our data centers, the increasing cost of providing exceptional quality network bandwidth, and the growing rate of actual infrastructure costs.

Server renewals beginning April 1th, 2007 will include an $8.00 increase to the base package price of each dedicated server. Accounts presently receiving discounts through the authorized reseller program will have the applicable discount applied to the increase. Of course, those that have already prepaid for periods beyond April 1th, 2007 will not be impacted until the end of their prepaid period.

You will continue to find the most affordable, best-value and widest range of dedicated server offerings with the same customizable and flexible programs that you have come to expect from Layered Technologies.

Upcoming Features

At Layered Technologies, we are continually striving to provide smart and innovative solutions to enhance our customers’ experiences. A few of these include:

* Launch our new HP higher end Intel and AMD offerings (DL360/365, DL380/385, DL580/585)
* New Storage solutions and increased drive offerings
* Installation of automated, remote reboot, and management access (Both Data Center facilities)
* New security offerings (IPS, IDS, additional firewall appliances)
* Upgraded network capacity and carriers 10GB
* Upgrade to automated, internal inventory and asset management, and deployments
* Additional facilities presence
* Increased Grid Layer offerings, and developer packages
* New “expanded” collocation offerings
* Additional Value Added Services – CDN, SSL, Domains

Postpone the Price Increase Opportunity

In an effort to maximize the value of your current hosting arrangement with LT, we would like to provide you with the opportunity to save money by postponing your pricing increase. This can be done by taking advantage of our attractive prepay program. You may prepay any of your current server package(s) PRIOR to April 10th, 2007, at your current monthly rate, plus get the added benefit of prepayment discounts.

This mail, following several over the last few months asking for prepayment, leads me to believe LayeredTech may be in a poor financial position. They know the problems this will cause their large number of resellers that have to either eat the increase or, if they’re working on as thin margins as LT itself, get all their customers to create new subscriptions with new prices for their servers. Yet they raised the prices on existing customers anyway; they’re willing to lose business to boost April’s revenue. Add that to their begging for prepayments and I’m worried.

I already went through the collapse of one dedicated server provider. It was another company making the best deals, obviously running on the thinnest possible margins, that eventually couldn’t keep up with its bills. When they got too far behind, their provider pulled the plug, and the servers were simply gone. Having backups, I had moved the same night that happened to the current home of two of my servers, NAC, through 15minuteservers.com, which really does set up dedicated servers in under 15 minutes any time of day.

I’d prefer not to go through that again. Beyond that, it’s apparent LayeredTech doesn’t care about its customers. They’re still signing up new clients, and running new sales, catching people that are completely unaware their price the very next month will be higher than the price they agree to today. Their reasoning is a list of “features” that include nothing for those paying the increased bills — they’re all new products for LayeredTech to sell to other people, with the exception of the remote reboot ability they’ve been promising for years.

I’ll be cancelling my LayeredTech service as soon as I choose a replacement. Right now it’s looking like SoftLayer; good reviews, solid network, excellent service, and the right hardware. An Opteron 180/2GB RAM/250GB could easily replace my two older boxes, and a dual Opteron 270/4GB RAM/250GB box give a nice capacity boost to W3Counter.