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Online Flash Mobs — Tip for Rational Business: Lower Prices = More Sales

Phillip Dampier August 22, 2011 Editorial & Site News 3 Comments

This device brought a Texas data center to its knees this morning.

We started getting complaints about site slowdowns and the unavailability of our multimedia content on Stop the Cap! earlier this morning, and the complaints grew as the morning wore on.  Attempts to access certain content here brought error messages or slow load times, when the content loaded at all.

We finally received an explanation early this afternoon that explains it all: the data center providing service for this website (and thousands more) was suffering from a virtual onslaught — an online flash mob of eager buyers trying to pound a certain online retailer for the now-deeply-discounted, and very-discontinued HP WebOS-based TouchPad.  Originally selling for $400 and up, HP on Friday announced they were slashing prices on their entire inventory to as low as $99 for a 9.7″ 16GB tablet they originally hoped would compete with Apple’s iPad.

At $99, it does now, as tens of thousands of customers poured online in search of one, creating a tidal wave of traffic that brought HP’s own website, and those run by several major online retailers, to their knees.  We (and other websites in the same data center) were collateral damage, until merchandise stocks were depleted and the mob moved on (most are now parked on deal sites like Slickdeals, in the tens of thousands, waiting for the next merchant to post the new sales price while avoiding doing their day jobs.)

HP’s phenomenal sales over this past weekend proves one time-honored truth.  If you cut prices in a battered economy, customers will come, even for a tablet running the Rodney Dangerfield of operating systems — WebOS — that gets very little respect (ask Palm how WebOS worked for them).

If only certain telecommunications companies learned the lesson: charging less can, and often does equal more customers.

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me
me
13 years ago

While that is true. Lower cost usually equals more customers. Sometimes it may cost you more. It can actually cost you money to have to many customers. As you need to hire more support people…

Typically in most business schools they teach mr=mc. That is the spot where you can maximize revenue.

This states it way better than I could for oligopys which is what most mobile phone companies and data providers are these days.

https://answers.yahoo.com/question/index?qid=20080408032725AA43ScO

Smith6612
Smith6612
13 years ago

ThePlanet I know happens to be a huge server provider, though I’m surprised that due to their size all it took was a massive sale to start causing problems at the data center. I didn’t notice any slowdowns come announcement day, but perhaps I was checking at the wrong time. Considering how often datacenters have to deal with DDoS attacks on someone’s server it’s amazing how the place choked just like that. The Internet at it’s finest, we all say! It doesn’t come as a coincidence that SoftLayer merged with ThePlanet several months ago. Perhaps they were running things on… Read more »

Scott
Scott
13 years ago

The SoftLayer ThePlanet merger happened almost a year ago. It’s hard to say where the bottleneck really was, normally you only see an issue like this if the site is using shared hosting or a VPS on the same server as the site getting hit with the enormous amount of traffic/requests.

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