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Why is hosting so cheap?

We haven't been in business for 4-5 years, lol? And our offices are our datacenter. We work there and have our servers located there, that is what most datacenters have, today. They have conference rooms, rooms for employees, and then the room for the servers. It might not be a big datacenter, one ds3 connection, but we came out of nothing into something that most hosts are not. It cost some money to start, but we are doing fine. If you even think it was somewhere around $100 to start, imagine those are pennies and we paid and are paying a $1/month.
Hope you like the little analogy!
 
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Some just don't appreciate the whole situation.

Salesman - I have an office, which may mean, a car and a mobile phone! Really that will be their office.

If you have an area which serves to the outside world then it could be on you coffee table and be called a Datacenter, so you didn't fib WMS
 
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Well that is extreme. Most datacenters call there datacenter their office too, ex. The Planet. A datacenter is a place where servers are provided as a service of web, email, db, or game hosting to the outside world. Although I don't believe that anything below a t-1 connection would classify as a datacenter though.
In addition to all that has been said in this thread, why would I lie? It brings nothing to our company and I was trying to explain the subject matter of this thread. Not going off on a diatribe, saying this company is lying.
If people want a little better look of were we are....
http://webmediasystems.net/untitled.bmp
Thanks again.
 
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Curtis H. said:
So if one owns a Hyundai yet calls it a Cadillac, a Cadillac it is? LOL
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Now that's a funny comparison :biggrin2:

WMS does have a good point. Most of the large datacenters and reputable providers have their datacenter and office in the same place. Most of the time, with expansions somewhere else outside their office, but still, the main one is near/in their work building. ThePlanet, LiquidWeb, Ev1servers are good examples :).

So calling your office building/place your datacenter is not completely wrong.
 
Just a general point:

The most profitable parts of our business, and the bits that are growing fastest are the cheap hosting and reseller services.

We do our cheap hosting by under populating the servers to reduce the need for staff input, using cheapo servers on reasonable connections and doing enough volume to keep the price down. We also don;t offer an uptime guartantee on the cheap hosting.
By doing that we manage to make about 50% profit margin on it.
Reseller hosting is even more lucrative.
We have been selling the cheap hosting for 5 years. although the hoting plan has changed a few times since then (got bigger).
So just because something is sold cheap does not always mean it is not viable.
 
And just to add to that, I even considered dropping the price to reduce our profits and therefore reduce our tax liability this year.
 
there is no such thing as cheap hosting

camikazi2k said:
What is web hosting so cheap, what can you profit from $40/year on 2gig and 20gig of transfer what kind of money do you guys make and how?
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hmm... i'd say those who are cheap are not for real. there are some affordable hosting companies but you should be very careful before chosing especially if you are running a heavy traffic website

Happy Surfing


NASH
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www.wish2marry.com
 
With al of these new hosts overselling so much and offering 10gb of storage and 100gb of bandwidth ( or some outragous ammount) , it is making it hard for reliable hosts to compete. Have any of you other hosts found this to be true? I know that these guys who do all this overselling will not last long, and then the customer is back out on the market, but I am finding it almost impossible to be able compete with these offers. You cant say in your offers " watch out for that guy that just offered you 10gb/100gb, he'll be shut down in a month :shame: " as that makes yourself look unprofessional and desperate, but damn I wish I could :eek:
 
I solved this problem years ago.
I set upa seperate brand to do hosting which would compete with the very cheap places.
We bring in as many customers through that as we lose to the cheap places from our main brand.
 
All of Gordons comments are very good and valid, it's a very competative world and lasting at least a year is an accolade.
We try to bring added value to our services and will not drop our prices below realistic levels. We do our math on everything to do with our servers and hopefuly we end up with figures that equal happy customers. In doing so we can even offer some deserving causes free hosting.

The really cheap hosting on offer should ring alarm bells as we've seen some very sorry tales in this forum from sites down to deleted accounts.

Anyone looking for hosting should balance the importance of reliability against cost from the start, and really can't complain after the fact.
 
There are three types of hosts out there. the scam, the cheap, and the good. The scam of course is proably what you have been seeing quite often and wondering how they can offer so cheap. The reason is they are either scaming you and just intend to take the money and run, or they will be around for about a couple more days. Then you have cheap hosts, the most are scams but a couple are real. However when going cheap, you get what you pay for. Most likley they are hosting on less the quality servers, and using less the quality connections, and less then quality staff, if there is any staff at all. Though I would never recommend hosting on one of these servers, if you are either staped for cash, trying to get a business off the ground, or just experimenting with web hosting then this could be find. But on avarage it is good to go with the little extra. Going with the more expensive hosts means that you will be hosted on quality machines, with quality staff, and connections. But the reason hosting is so cheap is becasue atleast 90% are "fly by night"
 
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