Hi ya all,

Excuse me for sounding dumb, but is it right in thinking that almost all webhosts play the numbers game?

ie they advertise 10gb bandwidth to their clients, but don't allocate that amount to them?
ie they bank on people not using it, so they don't order additional bandwidth for them.

Is this how they make their money?

I have been looking into doing small-time webhosting, and was going to allocate off the space the client orders - but then when working things out, it would be $2 per gig in block of 10gb, + revecom fees so say $23 for 10gb BW + space + support - it can't be beneficial unless people DO play the numbers game.

Without sounding nosey, how do you all do it? You can either post here or email me if you want to keep it off-thread.

Thanks,

James

Hi,

What you have said is very true and I know a lot of web hosts do this. Around 70% of accounts do not reach thier limit, but feel reasured that they have the space/bandwidth if they need it. This way, you can allow other accounts to burst their limit and charge them accordingly without any immediate charges to yourself for extra bandwidth or space for your server.

At least, this is how I do it anyway!

Justin

Thanks :)

oooh I noticed you live in Ipswitch - I live in Brandon which is near Mildenhall :)

Small world ;)

--James

Well I definitely prefer Cambridge to Ipswich that's for sure!


Justin

Many hosts count on the fact. That is, they count on the fact that the majority of sites never come close to the limit on disk space and bandwidth (the two most expensive parts of providing service).

That's why you can see incredible palns like 200-300MB, 10-15GB, unlimited email etc etc for just $4/mo. It's a very tricky balancing act that can cause a host real problems fast if they get the limits really tested.

Originally posted by WildWayz
ie they advertise 10gb bandwidth to their clients, but don't allocate that amount to them?
ie they bank on people not using it, so they don't order additional bandwidth for them?I believe it's more the second way :rolleyes: It'd be a little to dishonest to do the first method. Many do play the numbers game though. That is hoping that not all sites use their allocated bandwidth.

You can average out the resource consumption and spread the cost around on all users. This is how it is done (mostly). The trick is knowing what kind of customers your service will attract, and what their consumption pattern is.

In general, static sites consume less space/CPU than dynamic sites. Personal type sites drive far less traffic than celebrity pictures sites. So, know your customers.

Originally posted by Jaiem
That's why you can see incredible palns like 200-300MB, 10-15GB, unlimited email etc etc for just $4/mo.
Okay, you're exaggerating, right? If not, I'd be interested to know what companies offer such super-deals.
Thanks
Anders

An example is HostRocket... 350 MB disk space, 15 GB transfer for $9.95/month. If people used 15 GB transfer each month, they'd be operating at a loss, since bandwidth "at cost" is at minimum $1.00/GB, unless purchased in really high volume, so it would cost $15+ just to cover the cost of their bandwidth, let alone the cost of the server, staff, etc.

Many hosts rely on the assumption that their customers will use only a portion of the resources they are paying for, and have only a fraction of the actual resources on hand. As long as new customers keep coming in steadily and use relatively few resources, the host should be all right, but if the flow of customers slows, or if customers use more resources than the host had anticipated, that's when problems start to crop up.

Originally posted by Eric Radtke
Many hosts rely on the assumption that their customers will use only a portion of the resources they are paying for


Even then they don't make a lot of profit. I see lots of $60/year plans around here that offer 2-3GBs of transfer per month.

This is how most hosts think and operate:


Mr. Someone's Business Plan
Lets see ...that is (with 2GBs transfer) 2x12 = 24GBs per year. Average bandwidth cost for a host is at around $3 per GB which comes to $72 per year for the plan above. Huh? That's more than the plan itself costs. :cartman: But hey, most websites won't even use 1GB of traffic, which costs me $36/year!

$60 - $36 = $24 per year ...and that equals to $2 per month and customer.


Lets say you have 500 customers - which will keep you busy 24/7 ....you'll be only making $1000. Keep in mind that from those $1000 you'll need to pay taxes, paperwork, employees, internet connection(s), office space and a lot more.

All those 'cheaper-than-your-competitors' hosts won't be here for long. :bomb:

I couldn't agree with you more kiwi...the problem is as long as site owners continue to fall for it, it will continue to exist. The result will be sites and hosts going down :( I'm just hoping site owners and hosts alike, who understand the potential disaster, will attempt to educate the rest.

<<EDIT SEE: http://www.HostHelp.com/Alert.php >>

Logic really is the key factor here...

Deb
- FutureQuest, Inc.


p.s. We're not talking about a "Great Deal" but rather a "Too Good To Be True" one.....

1. For sure most of the accounts don't use more then 50% of what they have being allocated.
2. Automation helps to reduce the cost of support.
3. Selling other services with hosting.