I had a client who racked up an $18,000 bill with RackSpace, a debt which needed to be restructured. I think it took a year to negotiate, but eventually Rackspace let them go with just a $3,000 payment. So talk to Rackspace. Explain the situation. You might be able to talk them down.
This woman had a long-term account with RackSpace, so RackSpace was willing to show some flexibility.
To clarify, this was a lot more than a single dedicated server. As I recall, the setup was more like a 6 servers, one was a dedicated database, then there were 4 web servers, plus one server that was dedicated just to SFTP, and then there was a firewall and a load balancer. I think the monthly bill was around $3,000 or $4,000. The $18,000 figure included a large amount of custom programming done by Rackspace. As I recall, at that time, Rackspace charged $150 an hour for custom programming, so it was easy to run up a big bill with them, if you weren't careful.
The woman had relied on Rackspace for a lot of custom programming, and then she got the bill, that she realized that her business had reached the point where it made sense to hire her own team of programmers. Like a lot of people who are expanding their business online, she had started out thinking that she only need to make a few small tweaks to her site, and she might as well leave that to Rackspace, since the people there knew what they were doing. But a few small tweaks evolved into much more. So at that point she hired her own team of programmers. Which is how I got involved.
How can someone rack up an $18,000 bill? Was that just over a single month? I'm not a client of Rackspace, but I thought they billed out monthly, so if you don't pay your bill I thought they would shutdown your service. What happens, do they leave your service running and just let your bill compound?
Rackspace is a little different than most hosts. They want you to sign a paper contract, and will give you better prices if you commit for at least 12 months.
So its possible the OP had a good bit of time left on a contract, which he's now on the hook for. It would also make sense for Rackspace to take a smaller payment in such a case, as they wouldn't have rendered the services yet anyway.
I'm not sure I understand what you are asking here. I'm sure Rackspace has many clients who run up charges well over $100,000 every month. RackSpace handles some very large clients. Recall that YouTube started out on RackSpace, and was on RackSpace at least till the end of 2006 (I forget the exact date YouTube left RackSpace). RackSpace actually invented a special low rate (regarding bandwidth), just for YouTube, but, instead of paying monthly, YouTube had to pay daily, in exchange for that ultra low rate.
I'd guess that RackSpace clients probably follow something of a power curve, with the top 1% of their clients using something like 30% or 40% or 50% of all the bandwidth that RackSpace sells. And of course, that top 1% would have very large monthly bills.
I buy my 'green' servers for 900 euro or so, and the colocation costs are 25 euro per month. I place big (media)files on the Amazon S3/Cloudfront. $1k/year for a dedicated server sounds a bit expensive to me.
