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Thanks for the insightful reply which I will read again to fully digest.

One thing I wanted to add though on the issue of your costs increasing and the "retail" market. The retail market hates to switch (as much as you hate to move colo) and will stay with their current solution to avoid having to make changes (and that goes for the "tech" guy that works for the retail customer it's not to his benefit to switch hosting if he can simply pass the cost on to his customer or his customer pays directly).

So while your costs increase on a wholesale level the amount your customers can and will pay will increase as a much larger number. (If you want.)

I would explore a deal with your landlord that allows you to pay him a % for your success which takes the uncertainty out of your costs. This is similar to what is done at a shopping mall. The tenant pays for "sales" in addition to a base. While it might seem counter intuitive to do a deal like this I know I wouldn't want the uncertainty of pricing increasing and having to be negotiated in real time. That way your interest and that of the landlord are in line. And anything can be negotiated.

Generally in retail realty, a store will sign a lease and have options to renew at a preset rate that protects them. Starbucks doesn't sign a lease nor does the local pizza shop and then be held hostage. They do agree (nnn lease) though to cover any increase in costs that the landlord has in taxes etc which the tenant knows can be verified and make sense. Generally. It won't be a deal where the landlord sees they are successful and then makes a decision that they can't move and they play this game and jacks up the rent. That is what appears to be happening with your situation so I would work to get around that.

I'd be glad to do strategy with you on this further if you want. Feel free to contact me.



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