Why is hosting so cheap?

[camikazi2k]

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?

[tandoc]

Because those kind of hosts usually take a lot of signups in 1-2 months, then kill the business and run off with the money.

[Yojance]

hahaha Tandoc, you are soooo right.

[camikazi2k]

but i see them alot on this forum?

[tandoc]

and a lot of them are. I only feel a handful of hosts here are trustworthy/

[Dean]

like 1&1.. cheap too.

[Yojance]

some of them are for real, but i bet 97% are not.

[Manya]

Hello I am new to this forum but I am interested in everything related to online business and website building. I read your thread and faced a real problem. I don't really know what hosting service to choose. Can onyone advise something from his own experience? Thanks.

[EltahostCom]

Because those kind of hosts usually take a lot of signups in 1-2 months, then kill the business and run off with the money.

Heh lets calculate 2 gb its not so big quantity, 80 GB normal size of your disk.
80000/2000=40 Clients, 40clients*40$=1600 $ your annual receipt 1600$.
It is possible to find server for 1400$ annual payment... Heh 1600$-1400$=200$ its still profitable =). But in this case I do not see reason in hosting business, its depends on your cost I think...
What about my company it's possible to gain several clients with such estimate, but ... You know due to costs... People cant sell hosting if they suffer losses, if they are, then tandoc right.
I didnt take into account BW because 40 Clients*20 GB of BW=only 800 GB, normally its 1000 GB traffic you can gain buying dedicate :wink2:

[gate2vn]

the space and bandwidth are just small things. What is much more important is serverload. If your price is so cheap, you will need to put more clients into one server, to get profit. By this way, your server will go to overload soon.

many people see their host is great at the beginning, with cheap price. Then after several weeks, they complain that it goes up and down all the time. Why? Because the server starting overload!!!

I dont want to say, hey, raise our price up :D but customers: be careful when you need hosting. You get what you pay for.

[WMSpecialties]

You also need to understand that the world is changing. Technology is really only expensive when it intially comes out. The first computer was around 1 million dollars and today is probally isn't worth $10. New datacenters are being built every month. We have our own datacenter, owned and managed by WMS staff. We can run our datacenter and remote servers and our business is just fine. I think that most of it is technology change.

[TJR Networks]

If you sell lots of accounts with a smaller profit margin you can technically make more money than selling far less at a high profit margin. However, stay away from super cheap hosts because their servers are most likely going to be strained under the weight of hundreds, or even thousands, of medium to large sites. :shame:

Also, many hosts are assuming you will hardly ever actually use your full disk and bandwidth allocations. If everyone did at the same time they would have a big problem on their hands :tongue2:

[WMSpecialties]

I agree, but Technology is changing ds3 used to be $10,000/month, It is now $2,000/month.

[Curtis H.]

New datacenters are being built every month. We have our own datacenter, owned and managed by WMS staff. We can run our datacenter and remote servers and our business is just fine.
Let me get this straight... You stated that you have your own datacenter? :confused4 Are you sure about this??? LOL

BWT, you might want to fix the dead links. :eek2:

[XboxKing]

lol :p

[Decker]

Curtis do you ever have a point to make??

[gate2vn]

We have our own datacenter, owned and managed by WMS staff. We can run our datacenter and remote servers and our business is just fine. this is the most interesting I have seen here :P Do you mean you are the owner of The Planet? :confused4 Or maybe you put customer servers on "your owned datacenter", but your main server in The Planet :D

[Curtis H.]

Curtis do you ever have a point to make??
Do I need to spell it out for you? If so, sad on your behalf and any host who pretends or claims to own a data center when that is farthest from the truth. Makes me question your services or reason for such a comment. (I won't even touch that $2 website design of yours that displays paid banners.) :wink2: Move along.

[Raizan]

Just to let the above 2 people know. This is the last line in their About page:



While keeping dedicated servers in our datacenter, we now are offering shared hosting coming straight to you from The Planet.


That should answers all your smart comments :).

[WMSpecialties]

I appreciate you Raizan. For you Curtis, our site is orginal. Everything we have is made not bought, it is fully original from our WMS staff. Also we don't spam, that is why the links don't work.
Yes, we do have a datacenter, It is not a full sized class datacenter. We are not competing with the Planet, lol. We are not the owner of the planet. We are not just a reseller of dedicated servers, we are a different hosting company than most hosts on this board. Understand that a datacenter does not have to be large to be a datacenter. We have one ds3 connection. All on our site, sorry if it is not explained throughly. Riviera Beach, FL 33404. We do use The Planets services, but any dedicated or shared reseller that wants to be in our datacenter can request. We don't advertise this on the net, why should we? Think about it. It costs alot of money to make and run a datacenter. No person on the net will buy from us if this was the case. Our datacenter is mostly for small to medium size businesses that are local and are prepared to pay $100/month for 5GB of Space. I feel bad for Decker, because WebMedia Specialties hosting is about 8x the money we charge for WebMedia Systems hosting. Every time I post with him in a offer, I understand how much it is to have a large overhead, I am the staff member that pays the bills.
Please ask any other questions. We want everyone to be clear, that can find out for themselves. If you have been watching WebMedia Specialties, I have always said that the main WMS site, stays off our datacenter and we also host it remote. I wonder why a dedicated server is cheap on webmediasystems.net, and why was the old WebMedia Specialties hosting so expensive? When you deal with WebMedia Specialties you are dealing with the parent company of WebMedia Systems, the one that costs more, and the one that is located locally. Why should the people on the net care though, they are only really going to be hosted from the planet. Please contact us for any information.

[Decker]

Cheers WM, I'm still wondering about Curtis H (the pills must have kicked in) and their contribution to this forum. I'll pass on your comments to the member of staff (if you know how I can claw back the wages over the $2 mark let me know) who did the new template, and as before asking the same question you didn't answer, you may notice (the banners) it carries other hosts 'as before' clients have a choice. Please feel free to ask those featured how much they have paid in the past months (zero).


Do I need to spell it out for you? If so, sad on your behalf and any host who pretends or claims to own a data center when that is farthest from the truth. Makes me question your services or reason for such a comment. (I won't even touch that $2 website design of yours that displays paid banners.) :wink2: Move along.
This entire post is totally inacurate and we do require a retraction.


any host who pretends or claims to own a data center - duh where?

No wonder you have disabled reputation, god only knows what it would say.

[Jan]

We have our own datacenter, owned and managed by WMS staff. We can run our datacenter and remote servers and our business is just fine. I think that most of it is technology change.
Where is that located? You have pics?

[Coight]

If your making $200/year profit on a server your in the wrong business. If your making $200/mth profit on a server your in the wrong business.

[Coight]

Curtis is correct, what logical reason would a company have to have servers in theplanet when they have their own datacentre? The user even mentioned that datacentre's are expensive to run so why outlay more at a third party provider? :confused4

[Decker]

I won't even touch that $2 website design of yours that displays paid banners Em ask the other members of this board if they would like to complain. The $2 part is a real insult a lot of work is involved in the daily running of any company, and your twit comments don't help

Personally I'd like an apology from Curtis H.
Whatever they say is always negative and very often mis-quoted.

[WMSpecialties]

Riveria Beach, FL. Jan we don't advertise it on the net. We don't wish too. If we can't compete with any big datacenters, what is the point. We don't have the resources to expand just yet. Also in our eyes it is a big accomplisment for us to have a ds3 connection. We call our office our "datacenter". It is mainly for local companies to view and see.
Specs:
120 Sq. FT. facility
One Ds3 connection
12hr. uninterupted backup power.
Our CEO does not like this advertised, as I have explained this before. I am simply the sales manager. I have said this comment on this board before and now I am getting replies,lol? MN-Robert We are making internet customers with the planet. It is cheaper. We can not provide it that cheap in our datacenter. Also whats wrong with that profit / server? Also anyone that seriously would buy hosting if we did not have the planet, tell us. We want your input. Should we cancel using the planet, and just go with our datacenter? We respect any opinions
Also the price differences are below:
The planet - $15.99/month
Cpanel
5GB of Space
100 GB of data Transfer
Our datacenter $100/month
Helm
5GB of Space
100 GB of data Transfer
MN - Robert, do you see what I mean? Also if there is any problem with our servers, we can access our datacenter instantly. Instead of waiting for something to get done. Any other Questions?

[Decker]

Well done WM getting that far :applaudin I really wish people would think first, it might be hard to ask the right questions, but i seems really easy to just post insults. :shame:

[Dragonlordgod]

Because people how a-days over-sell to make hosting more cheap. :eek2:

[vinyong]

LOL LOL

[HarisK]

Hey guys.... I wish to ask you guys something... I dont know if my plan cost big bomb or is it alright? Maybe you visit www.vector-media.net
=)


Maybe you should stop spamming and posting useless things?

[vinyong]

??? sorry if I did ...

[Tamranda]

Maybe you should stop spamming and posting useless things?

Maybe we found a perfect example of Overselling :P

[vinyong]

who overselling??

[Tamranda]

who overselling??

I guess giving 100 GB Space for $39.95 is overselling?

[vinyong]

Well... thanks for telling me. I havent really check since this website is design by someone for me =)... thanks about it. ... you are cool

[Curtis H.]

The $2 part is a real insult a lot of work is involved in the daily running of any company, and your twit comments don't help
You have to admit that your website really bites. My comment had nothing to do with as you prefer to call a "company." As for "twit"... LOL


Personally I'd like an apology from Curtis H.
Now that's funny! :tongue2:



We have our own datacenter, owned and managed by WMS staff.


We call our office our "datacenter".
So if one owns a Hyundai yet calls it a Cadillac, a Cadillac it is? LOL

[Duport]

Most of them are little kids with these reseller accounts posing that they have been in
business 4-5 years, and think they know this that and the other, but really they know nothing

[Dragonlordgod]

Most of them are little kids with these reseller accounts posing that they have been in
business 4-5 years, and think they know this that and the other, but really they know nothing
Yeah, I completely agree. Just hate those. :rolleyes2

[tmgavin]

Well.. consider the fact that people dont use 10 megs of 1 gig..

[Decker]

Last ever reply to Curtis H - what is the URL to your website?

[WMSpecialties]

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!

[Decker]

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

[WMSpecialties]

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.

[Dragonlordgod]

This is actually getting off topic. :eek2:

[Decker]

Your right and guess who's not on course!!

[Raizan]

So if one owns a Hyundai yet calls it a Cadillac, a Cadillac it is? LOL

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.

[GordonH]

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.

[GordonH]

And just to add to that, I even considered dropping the price to reduce our profits and therefore reduce our tax liability this year.

[NashCA]

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?
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
---------------------
www.wish2marry.com

[d10sfan]

The reason why I can offer cheap plans is because I have alot of money.

[build-a-host]

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 :o

[GordonH]

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.

[Decker]

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.

[zildjian2000]

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"