Remember hosting prices

[Oleg]

I remember I was paying $25 a month for 1gb webhosting,but when I found there Is much better offers I did not even looked back :classic2:

[Robert]

I remember when the hosting business was a serious industry, not one full of kids with their parents CC and a RackShack server.

[NetConEdge]

I remember when the hosting business was a serious industry, not one full of kids with their parents CC and a RackShack server.

100% correct :( Check out all those newbie's , offering 200GB of traffic for $10 , they are destroying the market and scamming people.

[Archbob]

Well, the kiddies aren't the main reason prices have come down so much, bandwidth and server as a whole have gotten cheaper.

[striker]

I remember when the hosting business was a serious industry, not one full of kids with their parents CC and a RackShack server.

Yea not so easy to rip people off now is it?

[Tamranda]

100% correct :( Check out all those newbie's , offering 200GB of traffic for $10 , they are destroying the market and scamming people.

Damn too ... They eat up the market ! & moreover rip off the ppl !

[UnitHosting]

100% correct :( Check out all those newbie's , offering 200GB of traffic for $10 , they are destroying the market and scamming people.

These web hosts won't survive long :tired2:

[PremiumHosted]

Seriously don't know why that even bother.

[dc1pop]

Im a new webhost but il be around for ever :) and ever :) as all my sites are hosted by me and in my line of work il host client accounts on it to so .i will be here :) . The people tht offer the stupidly cheap packages are as i see it out of thier mind. I offer prices as low as i can so i dont see how they are making money on what they offer.

[GordonH]

Prices are going to drop further now you can get a VPS for $50 a month.

When RS started up prices dropped substantially.
I decided "if you cant beat em join em" and relaunched our discount brand www.myqth.com using RS servers.
At least that way we were able to pick up as many bottom feeders as we were losing customers to hosts using RS boxes.

As time went on though, sign ups dropped.
I had to increase the disk space to 1000MB and the bandwidth to 40GB per month to make it appear attractive compared to others.

In the UK market we dropped the price from £38 per year to £29 becaus eone of the cheap hosts was £29.
As soon as I did that, they dropped their price to £20.
Its a mad world!

When I look at the $48 hosting we do it breaks down to:

bandwith and server cost approx $12
Support costs approx $11
Acquisition cost $10 (the average cost to acquire one customer through advertising)
Credit card charges (approx) $2

Total cost: $35
Profit: $13

However, thereare many other overheads of running the business such as accountancy costs, insurance (a massive cost for a web host) and other things.
These are not included in the above.

Overall our cheap hosting adds to cash flow.
It doesnt make a loss but it does not make a real profit either.
It allows us to negotiate bulk discounts from suppliers because it adds to our overall volume.
Thats about it.

We had someone quit yesterday saying it was too expensive.
He would have preferred $15 per year.
That just can't be done!

The only way to do that would be to stop all technical support and stop taking backups, then move sites to the cheapest servers possible (we are using good P4's mainly these days).
Or overload the servers.
We only put 100 per server so we dont have to do much maintenance on them.
We could really stuff them in but it would probably just lead to higher server management costs, and trouble from customers when it all went wrong.

[GordonH]

Actually, last year I did draw up a business plan for a $15 or $10 per year host.

To do this we would need to put 300 sites per server and subsequently it would have to be 200MB/5GB type plans.
Also, there would be no tech support.
95%+ of our support requests are either web design/programming issues unrelated to the hosting or just people who wont read the documentation.
If we could kill that then that would reduce the costs like:


Cost to host each site: $4 per year
CC costs: $0.50 approx
Support: $0
Acquisition cost: $0 (assuming it sold itself by word of mouth)

Profit (at $10 per year): $5.50


The reason I did not do it is that the market seems to be demanding larger and larger hosting plans.
I could not see any market advantage other than price.
Also, the sustomers who pay the least usually demand the most support and have a very low renewal rate.

Ultimately I could not justify the amount of work it would have taken to create and maintain another brand.