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  1. #1
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    May 2003
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    Fighting Back against the Insane 200GB Plans

    Hi,
    I've been noticing lately that there are a growing number of Insane hosting plans out there from reputable hosting providers. I had a chat with one of them today. I won't mention the name of the company but they offer 200GB Space and 2000GB Bandwidth/m for US$6.95/m

    This is obviously insane, but I wanted to see how the sales chat would go if I asked them how they could offer so much for so little. The answer was initially "yes, we can do it". I then went further to ask if I purchased one of these plans could I store my CD's of photo albums and videos up to the 200GB limit. The guy also said "yes", but added that because its in a shared environment CPU usage could not be allowed to go to high (according to their TOS). I could smell a rat, a big fat greasy rat .

    Am I the only one or are people getting sick and tired of the rediculous hosting plans that are coming out these days. The above plan was from a reputable hosting provider and considering there are dedicated servers around today that offer less disk space and bandwidth for hundreds per month - isn't it time something was done about this? Or could the industry be heading for a "correction"? I hope so !! Because things are getting way out of hand.

    Maybe we more sensible Web hosts could take action to stop this. Maybe buy one or 2 of these plans and start loading massive files into these accounts - like photo albums, videos, open source OS, etc. Start giving these guys something to worry about? You reckon? Nah I won't be so nasty, but oh please - this trend has gotta slow down a bit !
    Last edited by bjdea1; 03-03-2007 at 02:41 AM.
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  2. #2
    Join Date
    Aug 2002
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    The best way to get back at them would be to purchase the plan and use it.

  3. #3
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    Aug 2003
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    Maybe we more sensible Web hosts could take action to stop this. Maybe buy one or 2 of these plans and start loading massive files into these accounts - like photo albums, videos, open source OS, etc. Start giving these guys something to worry about? You reckon? Nah I won't be so nasty, but oh please - this trend has gotta slow down a bit !
    Most of us wouldn't condone doing such a thing (based on a previous thread of similar discussion nature). However, the other thing to take into account, many tentative buyers are also beginning to smell such rats as well and staying away from those kinds of offers also these days. It really depends on the market area you aim at (and those overselling providers are aiming at as well) as to what type of customer do you want. In my experience thus far it appears those wanting insanely large plans (thinking they might even come close to using it all up??) seem to end up being less educated on the regard of hosting services in many cases, while those looking for reasonable resources are much better educated and thus seem to equal less a load on your support team.

    While I realize this thread isn't purely to discuss the nature of oversold plans, I felt the need to touch on the topic as this goes hand in hand.

  4. #4
    Join Date
    Aug 2005
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    UK
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    I don't mind these plans so much, they're kind of useful. I get a few querys from potential clients that are after me to match an 'insane' package, or think we're over priced. That's not the type of client we're after.

    They really are insane. Imagine how much a dedicated server with 2000GB of usage allowance and anything close to 200GB disk.. you're talking $500/mo from any decent DC minimum.

    Any client that thinks that's even remotely viable as a long term hosting package is going to need far to much support from your staff... if you see what I'm getting at

  5. #5
    Join Date
    Oct 2006
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    Salt Lake City, UT
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    850
    1 person using up 200GB still does nothing to these hosts. Yes, they do loose money on that one customer, but they've got 1000 more that use under 100MB.

    I was pissed at first when I saw HostMonster doing the same for $4.95(now 5.95/mo), now I've realized that they get "non educated/experienced" customers. That's their target, and they can have all of them.

    There's nothing worse than teaching a customer how to minimize their brower, or even telling them what a browser is. A call like that will let you know it's going to be a long night.

    I've also noticed that nooby customers call at 3AM & freak out that they've got an error, professionals & developers call durring business hours and discuss the issue only after researching it themselves.
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  6. #6
    Join Date
    May 2003
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    Melbourne, Australia
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    Response

    The reason I started this thread is because we've already had a handful of our own clients leave us for one of these insane offers. I find it very annoying, they want to believe the offers, I guess greed can really blind some clients. I just think its a cheap and dirty marketing trick, not that it surprises me, and becoming a form of false advertising. Because the truth is we all know that these hosts will simply make up any lie to boot the client off their server if they start coming anywhere near using their full quotas.
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  7. #7
    Join Date
    Aug 2005
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    The best you can hope for is that customers will learn from thier expierience with these companys and learn to pick a provider with more realistic packages.

    Untill then, honest hosts will just have to compete in some other respect like better customer support or more stable network.

  8. #8
    Thats not the problem. The problem is everyone has followed suit. If only a few hosts offered unlimited everyting a few years ago and nobody else bowed down too that level then the hosting market would not be in the state it is. So why didnt we let them offer unlimited everything? So let them be but most followed the same mentality. Now you have an oversaturated market and everyone is doing it. I first say this on Ebay. First it was justa few hosts offering it then by the end of 2004 every single webhosting ad on Ebay was offereing unlimited everything.
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  9. #9
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    May 2003
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    Melbourne, Australia
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    478

    Response

    This is why I say "is the entire Hosting Industry heading for a correction"? Like the stockmarket has its crashes, are these Hosts setting all of us up for some kind of backlash in the future? How much further can this go? 1000GB Plans? 10000GB Plans?
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  10. #10
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    Sep 2004
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    Italy
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    Sadly it seems that this is the direction many large hosts are taking, probably not to lose this fierce competition..

  11. #11
    Join Date
    Mar 2005
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    USA
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    I like these kind of threads, makes me realize more people are getting frustrated over this. These types of rediculous plans have been around for awhile and unfortunately, I don't see them going away any time soon. If you go to a directory type site that lets people write their own reviews (like http://www.besthostratings.com/ for example), what do you see? The same old "Top Ten Hosts" and right next to that, everyone writing in saying stay away from "X" Hosting, my site never comes up, bad support, worst host ever, etc., etc.! Is it greed that makes people go to these types of hosts? Possibly, I tend to think it's more people that arn't educated enough and the plain fact that we all look for a deal. Everyone wants as much as they can for their money, which is understandable. I can also understand someone trying one of those rediculous plans, but what I don't get are the people that try one, come in here and complain, then try another host with similiar plans, come back here complaining again, then try another and another. Maybe just some people never learn. According to most peoples standards on WHT, we're one of the most expensive hosts here, with some of the smallest plans, but we stand by our prices/plans and our target market and wouldn't want to attempt to compete with the heavy oversellers. My personal opinion is there's a very good sized handful of very good hosts here on WHT that offer realistic plans and prices and great support. I just hope with enough persistence and time everyone here can help educate others so that, if nothing else, at least they fully understand what they're getting into when choosing these heavily oversold hosts with rediculous plans and pricing. Just my 2cents worth.
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  12. #12
    The Market will correct itself.

    People are wising up that you have no chance of using the specs given as you are restricted by the cpu usage clauses in their tos.

    Also they get sick of poor " your number 1987" support.

    The Customers are the ones that truly make the changes, Companies tend to change to what the customers want , So soon the customers will realise that this hugely oversold plans aren't worth it.

    Its all abou the Customers.
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  13. #13
    Join Date
    Aug 2005
    Location
    Los Angeles, CA
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    114
    I wouldn't recommend this or try it myself, but here is an example:

    Take 1 dedicated server with 200 GB of disk space and 2000 GB of transfer, at a cost of about $200 per month.

    Sell a 200 GB hosting package with 2000 GB per month for $10/mo. Oversell it 20 times and you break even. Oversell it 100 times and you make a 5X markup and call that server filled. With the profit from this 1 server you can add 4 more servers just like it.

    If just 1 customer in 100 uses all 200 GB of disk space, you will loose money on that 1 server, but you still have plenty of profit from the other 99 customers to add more servers.

    In reality, it's probalby more like 1 in 1000 customers needs that much space, so the risk is not very big for the big "reputable" hosting companies who have a lot of money to burn. If you want to get back at them, you need maybe 50 to 100 customers willing to use the 200 GB provided to them. Maybe then they would rethink their plan.

  14. #14
    Join Date
    Nov 2001
    Posts
    5,383
    We have some clients leaving over the same issue, they are paying more when they can go to another hosts who costs less and offers 20 times more. Only problem is they have a 1gb space package and they use 200mb's.

    We don't activley pursue them it's their own choice if they wish to leave but in most cases they come back or I read feedback on here a couple months later that their no longer happy.

    The bonus for us is when they come back in most cases they end up paying more than what they were originally getting. All these hosts will do themselves in as after time while not a high proportion of the accounts will be abused by users just enough will to affect service levels.

    Last year we put dreamhost to the test on their 200gb plan. Guess what after loading it with 80gb's of legit ISO's we get an email stating we are "abusing" the account when we don't make the url for the downloads active. No email sent prior just a suspension and then their unwillingness to refund even though they offer a 90mbg.

    I really don't care we are over matching what other hosts have let them take the weasel clients that have too high expectations (they want support requests fixed before they enter them in the system) and pay little.

    We are actually going against the trend increasing prices, and decreasing limits. I would rather have 5 clients at $9.95 offering something reasonable and profitable without overloading machines than 20 @ 5.95.

    The other thing I would mention don't compare yourself to WHT hosts. It's quite simple really. The only discussions about hosts here are those that offer ridiculous pricing and features. It would be nice if the industry was regulated. Then the body could limit this bs and have minimum package costs assigned to all hosts.

    The reason so many hosting customers are burnt by customers is that offer such unprofitable packages and one day billy decides it's too hard and disappears.
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  15. #15
    Quote Originally Posted by 2Macs Jim
    http://www.besthostratings.com/ for example), what do you see? The same old "Top Ten Hosts" and right next to that, everyone writing in saying stay away from "X" Hosting, my site never comes up, bad support, worst host ever, etc., etc.!
    That is correct, thats why you should move to another hosting directory when you see the "SAME OLD" hosts being placed on the TOP TEN LIST. The reason is, because the owner of the site has a commission junction account and in order to make commissions they simply place the "SAME OLD" hosts on the commission junction affiliate program, on their website in the hope of making a buck.

    This is false advertising in my opinion. A webhosting directory should consist of REAL HUMAN POSTS by REAL website CEO's not some site admin whos controlling the lists to make a buck.

    Show me a webhost directory that does not have a TOP TEN list of websites gearded towards making a buck of affiliate links?

    Can anyone show me a real site? I tell you what, we are still in the process of setting up our own site and when we have finished coding it people will be able to posts their site links without anytype of FAKE top ten list.
    << Please see the Rules page. >>

  16. #16
    Isn't/wasn't there a site somewhere that more or less "exposed" all these overselling and "unlimited" offers? It would be great to provide a link for the inevitable client query: "Hey, how come I only get x disk space for $x per month from you guys, when I see advertisements for 1Billion TB of disk space for $.99/year"?
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  17. #17
    Join Date
    Jul 2006
    Location
    Detroit, MI
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    Quote Originally Posted by bjdea1
    Hi,
    I've been noticing lately that there are a growing number of Insane hosting plans out there from reputable hosting providers. I had a chat with one of them today. I won't mention the name of the company but they offer 200GB Space and 2000GB Bandwidth/m for US$6.95/m

    This is obviously insane, but I wanted to see how the sales chat would go if I asked them how they could offer so much for so little. The answer was initially "yes, we can do it". I then went further to ask if I purchased one of these plans could I store my CD's of photo albums and videos up to the 200GB limit. The guy also said "yes", but added that because its in a shared environment CPU usage could not be allowed to go to high (according to their TOS). I could smell a rat, a big fat greasy rat .

    Am I the only one or are people getting sick and tired of the rediculous hosting plans that are coming out these days. The above plan was from a reputable hosting provider and considering there are dedicated servers around today that offer less disk space and bandwidth for hundreds per month - isn't it time something was done about this? Or could the industry be heading for a "correction"? I hope so !! Because things are getting way out of hand.

    Maybe we more sensible Web hosts could take action to stop this. Maybe buy one or 2 of these plans and start loading massive files into these accounts - like photo albums, videos, open source OS, etc. Start giving these guys something to worry about? You reckon? Nah I won't be so nasty, but oh please - this trend has gotta slow down a bit !
    Do a search - this has been discussed at length on these forums.

    The catch is always in their TOS. This is no different then any other type of business marketing its services.

  18. #18
    Join Date
    Feb 2007
    Posts
    43
    Keep offering what you can afford, and target specific customer areas.

  19. #19
    Yes some ppl just want to exploit these insane hosts - usually they have porn websites.
    Most of normal plans hosts dont need to worry too much.
    You get what you pay for = common sense.
    Sooner or later hosts that offer insane plans get burned and their clients with them.
    It is simply not caring about your clients if you offer something like that.
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  20. #20
    Join Date
    May 2002
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    Internet / Colorado
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    Quote Originally Posted by heavypredato
    Yes some ppl just want to exploit these insane hosts -
    Most of normal plans hosts dont need to worry too much.
    You get what you pay for = common sense.
    Sooner or later hosts that offer insane plans get burned and their clients with them.
    It is simply not caring about your clients if you offer something like that.
    Not always, the hosts doing it are large cheap hosting companies and they have realized that bandwidth and diskspace are just marketing terms, normal small sites don't use any real amount so they can offer them huge amounts and bury in the tos/aup the real limits which are cpu/mem usage. So if your site gets bigger and starts using more of the cpu or so on they can say hey you are not fit for shared hosting, and that is true in some cases.
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  21. #21
    Join Date
    Mar 2000
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    San Antonio, Texas
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    3,690
    Quote Originally Posted by bjdea1
    Hi,
    I've been noticing lately that there are a growing number of Insane hosting plans out there from reputable hosting providers. I had a chat with one of them today. I won't mention the name of the company but they offer 200GB Space and 2000GB Bandwidth/m for US$6.95/m

    This is obviously insane, but I wanted to see how the sales chat would go if I asked them how they could offer so much for so little. The answer was initially "yes, we can do it". I then went further to ask if I purchased one of these plans could I store my CD's of photo albums and videos up to the 200GB limit. The guy also said "yes", but added that because its in a shared environment CPU usage could not be allowed to go to high (according to their TOS). I could smell a rat, a big fat greasy rat .

    Am I the only one or are people getting sick and tired of the rediculous hosting plans that are coming out these days. The above plan was from a reputable hosting provider and considering there are dedicated servers around today that offer less disk space and bandwidth for hundreds per month - isn't it time something was done about this? Or could the industry be heading for a "correction"? I hope so !! Because things are getting way out of hand.

    Maybe we more sensible Web hosts could take action to stop this. Maybe buy one or 2 of these plans and start loading massive files into these accounts - like photo albums, videos, open source OS, etc. Start giving these guys something to worry about? You reckon? Nah I won't be so nasty, but oh please - this trend has gotta slow down a bit !
    IM in a hurry right now but I will definitely be back to read this thread entirely. The title for sure caught my eye and just wanted to comment that its precisely why I still occassionally run a special here, even though our biggest plan is 500mb space.
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  22. #22
    Join Date
    Nov 2006
    Posts
    168
    The most insane offer I have seen so far was for 3000GB disk space with 11,000 GB transfer for $16.95 per month. While I understand it is a good marketing stratagy, the biggest problem I see with it is, people are starting to beleive they actually need this kind of space, and are clueless as to what they need any more.

    Overselling I think is ok, but I think some companies are going way over board. If people will only buy these insane packages, I think it will force more companies to have no choice but to follow suit if they want to compete. Just for some proof: c a n a c a . com

  23. #23
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    May 2002
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    Internet / Colorado
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    Quote Originally Posted by zwolf
    The most insane offer I have seen so far was for 3000GB disk space with 11,000 GB transfer for $16.95 per month. While I understand it is a good marketing stratagy, the biggest problem I see with it is, people are starting to beleive they actually need this kind of space, and are clueless as to what they need any more.

    Overselling I think is ok, but I think some companies are going way over board. If people will only buy these insane packages, I think it will force more companies to have no choice but to follow suit if they want to compete. Just for some proof: c a n a c a . com
    True but the first one is peoples fault, the second is of course since everyone will have to keep up and since they are now just marketing terms.
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  24. #24
    Join Date
    Jan 2007
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    What would a site contain that would be able to give accurate ratings for web hosts based on current or previous service? If somebody started one, based on the idea that no site could pay to get preferred visibility to their services, do you think this site would be popular?

    I have some time on my hands and a little money, and might be interested in starting something up like this, if people thought it'd be supported. Maybe something in the vein of resellerratings.com for hosts, with daily or weekly emails about specials from hosts? Seems like it could work...

    Cory

  25. #25
    I have not yet started a web hosting business. I have all of the tools but am still researching and working on my business plan. I only plan on targetting my local market as all of the current hosts in my local market are falling short in my opinion.

    My biggest issue for me is overselling and price matching with the larger national hosts.

    I know that I can get around this and prove myself to local customers but it will be a constant struggle.

    I was thinking, as a few people here seem to be upset about overselling and have thrown a few ideas around, that I would share mine.

    It has been mentioned that oversellers have protections in their TOS to actually prevent people from really taking advantage of "unlimited plans" and low prices. What if a guide or information -pdf was created by industry people against overselling that pointed out the pitfalls and negative side to overselling and the tactics used by companies that oversell. Such as the CPU usage, actualling using all of the space or bandwidth provided, etc...

    If this was prepared by a few knowledgable people it could then even be resold for a small fee to honest web hosts to display on their page or send to customers that want to leave to inform them.

    Personally I would never host with a company that promises unlimited everything or 1000gb space for $9.99. I always have felt that if it sounds too good to be true it probably is. I've seen dreamhost, etc and the several times over the years where I have needed just a virtual account I have stayed clear of such hosts.

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