A question that has always been in my mind. I even decided to start my own hosting business based on that, but I don't think that I have time for that.

The idea is, If hosting companies pay for bandwith and disk space, why do they charge for configurations?

I mean, now that everything is done using CP's, It seems pretty ovious to me that ..

1000 domains * 100 KB = 1 domain * 100 MB

Still I get lost in the numbers I see in a hosting plan!

2 domains, 3 subdomains, 3 ftp, 1 mailing list, 2 pop 3, 10 forwards, 10 autoresponders .. etc

I'm sure that with some effort, a web hosting company can be very precise about the resources each client is using. so if they offer a plan with specific disk space & bw, they should get unlimeted everything else, including domain names!

What do you think?

BTW, I meant by that general hosting plans, not reseller plans.
I posted this thread in this forum because most hosting businesses are resellers these days, at least new ones. but now I think it should have been in the hosting business forum.

Lets see what mods think :D

Originally posted by mubarmej
I'm sure that with some effort, a web hosting company can be very precise about the resources each client is using. so if they offer a plan with specific disk space & bw, they should get unlimeted everything else, including domain names!

What do you think?

I agree entirely. Well, almost -- you'd need to charge people for CPU time, or restrict it in some other manner, because some scripts (*cough* almost anything written in java *cough*) use very large amounts of cpu time relative to their bandwidth and disk space usage.

PS. It's not exactly a (plans.page-zone.com) new (www.inetflex.com) idea (www.bsdwebhosting.net)

Originally posted by cperciva


I agree entirely. Well, almost -- you'd need to charge people for CPU time, or restrict it in some other manner, because some scripts (*cough* almost anything written in java *cough*) use very large amounts of cpu time relative to their bandwidth and disk space usage.

Well, CPU time and ram are actually resources that companies pay for, but it sounds unpractical and unusual to measure these and charge for them. As a developer, it sounds very fare to me, but i don't think that average users will accept the idea.

CPU and memory can still be watched the same way <edit: its done now>. The most determining factors are those that users can count.

Imagine a user excluding your site just becuase he needs (for a particular reason) 100 forwards, but only 5 MB of webspace (that was the case for our college group, we needed a forward for each student at our domain, yet our website was nothing but a bunch of links to other resources).

This is a lost customer for most web hosting companies!

I looked at the links you provided, they are very close to my idea, still most webhosting companies are charging for configurations!

Do configurations really cost anything?

Originally posted by mubarmej
Do configurations really cost anything?

If everything is automated, no. But most web hosting companies aren't automated -- at the very least, most require human intervention to create new domains and users. Humans get expensive... take the humans out of the equation, however, and it becomes practical to eliminate such fees.

Originally posted by cperciva

take the humans out of the equation, however, and it becomes practical to eliminate such fees.

Exactly, thats why i said in my first post:

I mean, now that everything is done using CP's ..

You signup, you are billed, welcome message is sent, account is setup (user account, DNS, space, email, ..), all that in < 15 minutes .. It's all automated.

Later changes in configurations are done by users and changes take effect automatically ..

All humans have to do is come everynow and then and look at logs maybe of actions done by users, I don't think that this will take a lot of time and need a lot of people ..

Humans are also (of course) still needed in case something goes wrong ..

So still can't see the cost of configurations!

Interesting. We are actually about to adapt this concept too. Some things just don't need to be charged, agreed. For anyone that owns a company or hosting at that will know that although things are automated as far as setup is concern there is still allot of human interactions involved.

Take the example of the person who signs up an account gets his email message and deletes it, so now he doesn't have his account name and password to enter. Then because they don't know how to use your system (and fails to read the FAQ or manuals) they send numerous emails on how to do things. You spend allot of hours with every new account you get for at least a week or two.

So some charges do make sense. Now as far as email, bandwidth I also think you should pay as you use and this is what we are about to go to.

Remember, we are in the business to make money too. And like someone said, humans cost money. Just my 2 cents.

Components do actually cost money though. You need email software for the mail server, FrontPage extensions license if supported, SSL certificate for shared SSL hosting, FTP software

etc.

Although these costs can not generally be divided into a cost per POP account (example)

Also creating configurations allows a host the scalability of running a loss leading plan which leads on to a higher package.

IE. Plan with 5 POP accounts no MySQL, could be priced very cheap. Customer requires more POP accounts and database support so package can be upgraded to a higher costs package, the advantage they see is also getting more space and bandwidth.

If the pricing was purely on space/bandwidth a customer could create 1000 POP accounts plus MySQL with under 100MB bandwidth and the host has been unable to gleam any additional revenue, plus the email server may become a little miffed with all these accounts being accessed even if there is no mail to handle.

I think that makes sense??

I always find it amusing when a customer is concerned about pricing strategies. Isn't it the bottom line you are really interested in, not how it is arrived? And most of us develop our pricing far differently than we actually publish it for retail customers. Often that is by industry tradition, simplicity, or ease of understanding to the customer.

Isn't it far simpler to be told a 100 MB / 5 GB site with 1 MySQL Databases, 1000 email accounts, and these other features is $19.99...and if you want to add an additional database it is a setup of $10.00 and $5 monthly or something like this

than the reality

well, lets see 100 MB...5 GB...I estimate you won't use but about 75 MB and probably no more than 1.5 GB....so although my desired target is $.10/MB and $4 per GB instead of making it $30...I can use my projections and make it $7.50 plu $6.00....but the industry supports $19.95....and I know you will require lots of support...oh...and by the way....I could care less how many emails....so I'll make it $19.95....and as to that extra Database....I know it takes 30 seconds to set it up....and it shouldn't cost extra....but I figure with it you will use more space and bandwidth, so my other projections won't work any longer....so I'm just gonna add $5.

We all know figuring costs and pricing in this industry is very difficult because every user is different and we have to work on averages. But, the bottom line is the value.....service versus total price.

Think next time I go shopping, I will ask how much I am paying to support the staff which is standing around not waiting on me the customer.....nope.....better not....