I know this has been covered many times but I still need better clarification on this issue....

Looking through the replies to the web host requests there are some hosts offering to handle 40 to 50 GB of bandwidth per month for $9.95. How is this even possible? The telecom companies can't even produce it that cheap.

I want to know where these companies are housing their servers. You can't even have a rack shack server and charge that little for bandwidth.

Isn't this becoming a bit ridiculous? Opinions?

:uhh:
IMO--> QUITE ridiculous.

Well, considering that the cheapest RackShack server with Ensim is about $105.53 per month with 400 GB of bandwidth, that's about $0.26 per GB of bandwidth. That means they can offer around 37 GB of bandwidth without overselling (not including support, merchant account, telephone, and other costs). They figure not everyone uses all of their bandwidth, so they oversell. That's how they do it.

I agree that's ridiculous. I see too many people wanting to get rich quick by getting a RackShack server and offering the world and the sun for a ridiculously low price. Though many might be successful at first, most of them usually fail in the end because they don't consider many other factors involved in running a hosting business. The problem is, most people want cheap. They want quantity over quality. That makes it harder to find customers that are willing to pay for quality, so they offer really cheap hosting to try to attract a lot of customers. They think more customers = more money, but they don't realize, more customers = more time, and time = money. Do they really want to have to have 2000 customers to live comfortably? I'd rather have 200 instead.

It's just becoming ridiculous. Not that we are trying to compete with these :give you the world for nothing" hosts but...

We have more customers that come, then go, then come back, then go again, then come back again-again. They are lured by these false claims of large amounts of everything that really can't be delivered by these other hosts.

Will this be like the long distance wars? Or should I say, This IS like the long distance wars. Prices went lower and lower and lower. Finally lots of companies went belly up but now there are a whole new group waiting to give you unlimited long distance for $10 a month.

sorry if this seems like a rant, it is I guess. I think its funny how about 6 months ago all the posts were for unlimited everything. Everyone bashed that idea enough so these same people are now posting unachievable limits.

Its true that there is safety in numbers and that if you offer a service cheap enough you'll be able to make money but not if almost everyone is offering these unbelievable deals. Just think, were would rack shack be if suddenly everyone was offering $99 a month dedicateds?

They are just all overselling. And eventually they go bankrupt because they can't pay their bills any longer and / or they can't live from there work.

So just be patiened, they will be gone in a couple of months. (at least that is what I expect).

Originally posted by Starhost
They are just all overselling. And eventually they go bankrupt because they can't pay their bills any longer and / or they can't live from there work.

So just be patiened, they will be gone in a couple of months. (at least that is what I expect).

At first, I was a little disconcerted when I saw offers this week which offered 25 G bandwidth for $5/month and 50 G bandwidth for $9.95/month. I think they have it in their minds to build a reputation with loss leaders and then raise prices. But, at these prices, they will not be around long enough to raise them.

I plan to be around for the long haul. This type of bargain frenzy really has no effect on our clients in the long run, but it does instill more distrust in the hosting industry when these companies go belly up.

-Lamar

Originally posted by Perfecthost


At first, I was a little disconcerted when I saw offers this week which offered 25 G bandwidth for $5/month and 50 G bandwidth for $9.95/month. I think they have it in their minds to build a reputation with loss leaders and then raise prices. But, at these prices, they will not be around long enough to raise them.

I plan to be around for the long haul. This type of bargain frenzy really has no effect on our clients in the long run, but it does instill more distrust in the hosting industry when these companies go belly up.

-Lamar

You are completely wright but what can we do about it? Nothing, just wait untill they go bankrupt. Let's pray for it to the hosting GOD.

Originally posted by Perfecthost


At first, I was a little disconcerted when I saw offers this week which offered 25 G bandwidth for $5/month and 50 G bandwidth for $9.95/month. I think they have it in their minds to build a reputation with loss leaders and then raise prices. But, at these prices, they will not be around long enough to raise them.

I plan to be around for the long haul. This type of bargain frenzy really has no effect on our clients in the long run, but it does instill more distrust in the hosting industry when these companies go belly up.

-Lamar

Why don't you sign up for a coupe of accounts and use the bandwidth to its max and see what happens :)

Originally posted by Synergy
Why don't you sign up for a coupe of accounts and use the bandwidth to its max and see what happens :)

LOL! Are you saying we should hurry along their demise?;)


-Lamar

Originally posted by Synergy


Why don't you sign up for a coupe of accounts and use the bandwidth to its max and see what happens :)

That's a good idea! :D

And then tranfer data from webhost a) to B) and over and over. When we do that with a couple off us. They will notice it imediatly. And hopefully they will see that they offer wrong packages.

First it's the little companies that will bankrupt, then it's will be RackShack.

Originally posted by Shyne
First it's the little companies that will bankrupt, then it's will be RackShack. Why do you harbor such feelings about RackShack?
Do you, or have you had, servers with them?
You seem to look for places to slam them.
Not saying you don't have a legitimate gripe against them. Yet, I haven't seen you post one yet.:rolleyes:

I think where shyne is coming from is that rack shack is basically doing the same thing a lot of these other hosts are doing. Offering a lot for very little in return. Granted they are doing it with dedicated machines vs. shared hosting but it is the same principal.

What would happen to rack shacks prices if cogent were to go out of business, which is still a good possibility since they are not turning a profit and never have? RS would have to get truly stunning priceing from some of the tier 1 providers to continue offering these prices. In turn this would put a lot of these smaller ultra cheap plan companies right out of business.

Just for the record, I have nothing against rack shack. they are making a very tough business model work. I only worry that at that some point their margins will change because of the bandwidth providers they use. When that happens there will be a lot of customers looking for new hosts.

Not all cheap hosts are bad. There are a few cheap hosts that are actually very successful, and RackShack is one of them. It's the rest that ruin the reputation for cheap hosting. I don't know why, but I have a gut feeling that even if Cogent were to go bust, RackShack will still be doing okay, but they might have to reduce their bandwidth allocation to maybe 200 GB instead, which is still a lot for $99 per month. Then again, my gut feelings aren't always accurate. :buck: We'll just have to wait and see.

lol. the only people ever concerned with and yelling about the companies that offer the lowest prices are the guys who can't afford to compete. to bet unbiased opinions you should ask the customers. They frankly don't care about the company for the most part, they care about saving $$$ and if somebody offers cheeper, and mostly better, well customers will go for that. It sucks but it's life.

Originally posted by inkhead
lol. the only people ever concerned with and yelling about the companies that offer the lowest prices are the guys who can't afford to compete. to bet unbiased opinions you should ask the customers. They frankly don't care about the company for the most part, they care about saving $$$ and if somebody offers cheeper, and mostly better, well customers will go for that. It sucks but it's life.

Actually, we do compete, hold our own, and (in the long run) beat those "fly-by-night" companies. My worry is not gaining or losing customers, but the bad image which they give web hosting. I suppose we should appreciate those companies since we get refugees from them.;)

It's like shady used car dealers, which give all used car dealers a bad name. There are lots of good ones out there, but it's the ones which take people's money and disappear that are remembered when "webhosts" are mentioned.

Oh, and give the customers a month with a bad host and they'll be looking for new hosting. So, it's not all about the $$$$.

-Lamar

Well thats certainly not the case here. I am not trying to compete in the price wars. I'm simply commenting on how low it is getting and how annoying it becomes when customers leave to save a dollar or two a month and then they come back and then the latest and greatest deal comes along and they leave again. Then when it doesn't work out they come back.

They're spending more time transferrnig back and forth, it just seems a waste of time.

I'm sure that we have more than enough customers and financial stability to stand the test of time so I'm not concerned with these low priced guys I just find it amazing what they offer. What will they think of next?

I can imagine the ads of the future:

100 G of bandwidth, 30 G of space
We will pay you $20/month to host with us!

Now there's an offer!;)

We will pay you $20/month to host with us!*

<font size="unreadable">* with the purchase of our $50/month plan</font>

:D

People who are offering this insane prices. Don't have a good business model. They have to serve that many clients before they can live of the work they do. And that isn't good.

Also when for example RackShack raises prices, those companies will be ven turning less and less profit. And they can't pay their bill because the just have a little amount of profit per account.

So just wait and pray to the hosting God. RS will raise prices soon (that would mean hunderds of hostst stop :D :D).

Do agree with the consensus of those who see too many hosts lowering pricing beyond a sustainable level as detrimental. It also is a case of wanting to have your cake and eat it too, considering the relative ease for anyone to get a hosting account and begin reselling, and offer discounted prices.
You have to remember where this started and it began on that level, then progressed with the dedicated servers becoming cheaper to lease. We see everyone complain except the ones offering the reseller accounts, and now dedicated servers for cheap, with it being not hard to figure out why that is so...

Maybe it has to do with it being highly profitable now, considering how many actually succeed or rather fail....hence turnover, and so on.