Hosting Prices Go Mad!

[fcolor]

Hi,

Don't you think the prices of shared web hosting went down too much. Only an year ago $7 for 300MB space and 5GB bandwidth was good offer. Today even old and reputable companies underbid the market by offering 50-80GB transfer and 1000MB space for $7 per month.

I know bandwith is cheaper today than an year ago but if we go this way for another year or two the providers would become less profitable and soon the hosting market could go the way that NASDAQ went a few years ago.

Somebody may say that hosts could earn more profit offering additional services but I think the business focus is to offer quality hosting services.... not SEO services, web design, site promotion and etc.

What do you think about it?

[bright-byte]

:) Hi fcolor,
I agree that hosting companies have fallen victim of the discount war instead of competing on quality and service at a realistic price. The reason this has happened (in my opinion) is that it is the easy way to get clients who don't know any better to sign up for their services and I also believe that this is why there are so many unhappy hosting clients out there.

I am surprised however when people start talking about how cheaply hosting is now being offered, the only costs that are mentioned are bandwidth, there are a lot more costs involved in running a hosting company besides bandwidth and they are too many to go in to here, these costs are incurred only if the company is offering quality 24/7/365 support, reliable and fast servers and top flight technical and sales staff to see that the clients receive a standard of service they deserve and this cant be done or maintained for any length of time by offering 5gb space and 70gb bandwidth for $7 a month.

I do feel that the general hosting public is now growing wiser and have been better educated on what they should expect to pay for their hosting needs and now know that if they want a host for a mission critical site that must be online, accessable to all and supported 24/7, they need to pay a bit more for it and they also know that if they are not concerned about server uptime or support then they can elect to go with the cheaper hosting providers.

In short, and yes it has been said so many times before, you get exactly what you pay for, and if you expect a Ferrari for a an old jalopy price don't be surprised when the wheels fall off.

[WMSpecialties]

I agree, a host has to stay in business too. Although most people today don't look at gigabytes and megabits, they look for the best price out there. I thought of a resolution to this problem and I think it is a very good idea.
1. Give the people the prices they want without 24/7 support.
2. Offer them an upgrade for 24/7 support and if they don't want it, it is thier loss.
Also you have to outline this offer in your tos. A datacenter is alot of money to run, so we offer what we call, Supreme Support, or SS service. This means you have unlimited telephone support and get daily backups of your databases. If they don't want it they still get unlimited chat support, but the support people on the chat are not always on. So through this idea the host does not loose and the customer does not loose.

[mrryan]

Hi,

Don't you think the prices of shared web hosting went down too much. Only an year ago $7 for 300MB space and 5GB bandwidth was good offer. Today even old and reputable companies underbid the market by offering 50-80GB transfer and 1000MB space for $7 per month.

I know bandwith is cheaper today than an year ago but if we go this way for another year or two the providers would become less profitable and soon the hosting market could go the way that NASDAQ went a few years ago.

Somebody may say that hosts could earn more profit offering additional services but I think the business focus is to offer quality hosting services.... not SEO services, web design, site promotion and etc.

What do you think about it?
people oversell there space and things remember a year ago server were alot more stable because there was not all this overselling

[WMSpecialties]

Thats true, it is hard to spot if your hosting company is overselling, so a lot of people fall victim to this. You could do a simple ip check, but that is not always guaranteed either.

[jiehao85]

Overselling within reason should be okay as they are just redundant resources that are left untouched. 5GB diskspace and 70GB bandwith for $7/month is just too ridiculous and I am quite sure that the company will not last long.

[WMSpecialties]

Well right now, I am giving out our WMS - Reseller 2, 5GB of Space and 100Gb of bandwidth for $9.98/month, which is below cost for me, but that is what specials are supposed to be for. Specials don't last forever, this one ends January 1, 2005. So sometimes you have to take low prices into consideration.
http://webmediasystems.net

[leyther]

Based on that price you are overselling, You would have to work a buisness plan out on how you currently earn and you need to cover the cost of the server before you should think about making more profit. If you sell 10 WMS R2's u got under $100 and 1000G of B'width gone. I'm sure you pay a lot more than that for your server unless it is of a low spec

Danny

[WMSpecialties]

We are not overselling, We do not believe in overselling. Our business plan has and is still working that we set up in June of 2003. Also we only have 8 WMS - Reseller 2 plans left before we end the offer. We have taken that into consideration. If you don't you must be crazy. The admin works real hard at his job doing all the management and tech work. Me and my fellow co-worker can not imagine how much he thinks ahead. Also As I posted before, we have what is called Supreme Support, or SS service, which is an option for consumers - which is an additional $35/month, so it is not just $9.98/month We also have more local clients than internet clients so we are financially stable and are going strong. We have a datacenter that costs lots of money to run, we understand finances. The word I think you are not trying to use is “Competition”, WMS is willing to grow and compete for customers if that is what it takes to be a company.
Most of our servers are
Celeron 2.4 Ghz
2 GB of Ram
120 GB harddrive
If that is low specs, then yes that is what we offer. The only thing a a web server really needs is memory, unless you have a dual processor, the processor does nothing to benefit you more. We are not hiding anything and our Key goal in webhosting is Trust, "WMS - The Web People you can Trust"