Colo on eBay

Is an online auction an effective way to sell colocation services? A small number of providers are selling colo through eBay, an effort that prompted some surprise last week on the ISP-Colo mailing list. "Wow, I've seen it all now," said one poster. In fact, while selling colo through online auctions may be unconventional, at least one recognized firm, Hurricane Electric, has been doing it for more than two years. Other companies who have recently sold colocation space on eBay include ValueTech, and RaQport.

"It's a new channel," said Benny Ng, director of marketing for Hurricane Electric, which has been providing online services since 1994. "Why not exploit it? Being a company that has been in business for over 9 years and profitable for every quarter, its a given that you have to be smart about the way you do things. If there is another channel that we see appropriate, we'll use that one too."

Hurricane is currently offering space in its new data center facility in Fremont, Calif.

Auctions can be structured with a reserve price to control a seller's downside pricing risk. Some colo sellers, such as RaQport, forego the auction process and use eBay's online store program to offer products at a "Buy it Now" price.

Does it work? "I like to think that those who use eBay are 'educated' buyers," noted one ISP-Colo participant who had sold through eBay. "When we did it, we didn't get bargain basement (pricing). The clients pay on time and don't really bother us."