Page 1 of 2 12 LastLast
Results 1 to 40 of 57
  1. #1

    * Online picketing AGAINST low cost hosting!

    About the practices of low-cost hosting companies.
    These prices are getting ridiculously low. But thats good for allowing beginners or any business or anybody to get online. That may explain the proliferation of substandard "businesses" cheating consumers and giving the more serious online merchants a black eye in front of their very own potential customers. When are low cost hosting companies going to realize that they help no one, except illegitimate individuals to hurt the total quality and value of the Internet ecosystem and the economics it depends upon for FUTURE growth. Over half of my friends who have been online no longer go there or will ever go there because there's just too much garbage to wade through to get to something meaningful and worth the trip. And the spyware produced by those web vultures who perch atop low cost hosting are destroying the very vehicles consumers are using to get here, their PC's. Maybe if those vultures had to pay more they'd do something better than cram my customers harddrive full of porn and viagra so that it's impossible to surf without pausing every 3 sec's to close a popup. Yeah, thanks for the low price hosting plans pal.

    I myself would not consider getting my own site, or a very important client's site hosted by a company who's prices tell me that they are scared to charge more because they probably don't deserve it. People WILL pay for good quality service. I usually pay 3x's as much as the lowest available price because service and dependability matter more. Quality is perceived by price, backed by image, enforced by service, and proven by product - Economics 101. You want serious money, go to the guy who's serious about his money. I'd charge more than the competition if I knew I could offer equal or better service, and I do. My customers always say, "My online business will make $x000's per month and I would pay $x00's to keep it running, find me a good host and we will pay whatever it takes." It's a lease for the building they will be doing business out of. You know how much that is for a brick and mortor.

    Give me an argument if you want. I'll prove that it's hurting you more than helping you.

  2. #2
    Join Date
    Sep 2003
    Posts
    3,854
    I would argue it depends on what one may consider 'low cost'.

    Different people, different interpretations. High prices doesn't necessarily imply high quality. A scam host could just as easily create a nice website, and hike up prices and fake the image. They do it with 'unlimited' hosting, nothing stopping them from targeting the higher end of the market.

    Also, different hosts have different management styles. Some hosts may use the strategy of increasing profit margin by increasing prices. Others may choose to work more efficiently and thus reduce costs.

    Firms have different methods of attracting customers. Some may choose low profit margins to penetrate the market. High volume of sales + low profit margin can be the same as low volume of sales + high profit margin.

    Rameen
    InnoHosting, Performance Web Hosting || US: 1-888-522-INNO UK: 0800 612 8075
    Web Hosting - Virtual Servers - Managed Servers - Application Hosting
    Reseller Hosting with WHMCS & Preloaded KB | SSL | activGuard | End User Support
    LiteSpeed / CloudLinux / Idera Backups / True 24x7 Support / 10+ Years in Business

  3. #3
    Notice the "Quality is perceived by price, backed by image, enforced by service, and proven by product - Economics 101."

    Any educated business person knows that a lower priced product within your own market does nothing to increase total sales and can actually decrease demand. Nobody wins when business competes through price. The store makes less money and puts out a substandard product to the consumer.

    I would bet that 9/10 "Ultracheap" hosting providers are fly-by-night quick buck scam artist how should be arrested for disrupting the economy and lowering the value of legitimate hosters.

  4. #4
    Join Date
    Mar 2004
    Location
    Orlando, FL
    Posts
    5
    I also disagree, i have ran a lower-cost host for about 3 years, and we have high quality and better sevice than the larger companies, i think its perception.

    Stealthdevil is right. If you have a good management model you do fine.

    If you consider $4.00 a month cheap for 100 MB of space and 2 GB of transfer, then your paying too much. Then again, those who are hosting companies, should be customers of themselves, and if they are not, then they obviously dont have a solid product.

    Economics also state that industries will constantly change. Bandwidth is getting cheaper, servers cheaper, more reliable, and more dynamic technicians are comming out of the woodwork, i wouldnt jump to conclusions just yet.

  5. #5
    Join Date
    Nov 2000
    Location
    Tasmania, Australia.
    Posts
    3,587

    Re: Online picketing AGAINST low cost hosting!

    Originally posted by clint317
    I usually pay 3x's as much as the lowest available price because service and dependability matter more.
    3x? On your site you state that you use webhostxl.com, who offer 700MB/10GB for $60 a year. I'm not too sure there are many around that provide that for $20 a year (or even $60).

    You were saying...

    Gary

  6. #6
    Join Date
    Sep 2003
    Posts
    3,854
    Actually clint317, it is very possible to compete on price.
    As porters matrix states, you can either use cost advantage or differentiate.

    You also need to take into account the price elasticity of demand, the income elasticity of demand and maybe even the cross elasticity of demand (depending the value added services you provide) of the industry you are in.

    Obviously, if u are well educated in terms of economics, you would already know, that the hosting industry is very competitive and has a price elasticity of demand in excess of 1, which means price plays a very important part on a consumers decision to choosing a webhost. Pure economics.

    Rameen


    Originally posted by clint317
    Notice the "Quality is perceived by price, backed by image, enforced by service, and proven by product - Economics 101."

    Any educated business person knows that a lower priced product within your own market does nothing to increase total sales and can actually decrease demand. Nobody wins when business competes through price. The store makes less money and puts out a substandard product to the consumer.

    I would bet that 9/10 "Ultracheap" hosting providers are fly-by-night quick buck scam artist how should be arrested for disrupting the economy and lowering the value of legitimate hosters.
    Last edited by IH-Rameen; 03-15-2004 at 11:10 AM.
    InnoHosting, Performance Web Hosting || US: 1-888-522-INNO UK: 0800 612 8075
    Web Hosting - Virtual Servers - Managed Servers - Application Hosting
    Reseller Hosting with WHMCS & Preloaded KB | SSL | activGuard | End User Support
    LiteSpeed / CloudLinux / Idera Backups / True 24x7 Support / 10+ Years in Business

  7. #7
    Originally posted by clint317


    Any educated business person knows that a lower priced product within your own market does nothing to increase total sales and can actually decrease demand. Nobody wins when business competes through price. The store makes less money and puts out a substandard product to the consumer.
    I agree with your statements regarding pricing in the hosting industry - fact is, some of the prices being charged are just not sustainable, even by the most streamlined and efficient providers - the numbers just dont add up.

    However, I must disagree with your statement above.

    Commoditization occurs in almost every industry - basic economics states its an inevitable cycle in a product lifecycle. Concept, early adopters, general acceptance leading to rapid growth, maturation, commoditization. The goal of most organizations is to delay the commoditization of their product as long as possible.

    To make a claim that no one wins when business competes through price just isnt accurate. Just take a look at Michael Dell. Dell has practically monopolized the Intel business by streamlining their supply chain and synchronizing this with an advanced forecasting system. Every other major vendor has tried the price war with Dell - and failed to turn a profit. HP officially bowed out of the price war last year, and IBM followed suit this year. Fact is, Dell was able to produce the product faster and cheaper, and was ultimately able to pass those savings onto their customers. HP and IBM have chosen to take the "moral high road" and state that they will not get into a price war with Dell, but rather justify their higher costs with their value statement. Whether this value really exists remains to be seen.

    Bottom line is - Dell forced the industry to push their prices down and ultimately turned PC's into a commodity. Seems like they did ok to me.

  8. #8
    Join Date
    Aug 2003
    Location
    Syracuse, NY
    Posts
    2,168
    I agree with you to a certain extent. But I wouldn't categorize all cheaper hosts to being god awful. Some really do a good job. I used to think I was the cheapest, but i've stuck with it and eventually some of the other guys got cheaper. An example is that i've seen an influx in the number of hosts offering 1 GB space and 50 GB bandwidth ~$10/mo.. When I started my business 8 months ago, I sold it at 2.5 GB space with 50 GB bandwidth for $10/mo. The difference is that the hosts doing it were unprepared for a price cut and started managing it very poorly. I'd say a good 98% of the cheaper hosts eventually go out of business because customers are leaving and they're not making enough. The little guys start up, have only enough money for about 1 server and that's it. They design a web site and spam people on AIM getting clients. The few customers they get realize the service is poor and the owner loses money. Falls under, the end. But those that can run strong for the cheaper costs can be quite good. Prices have come down on things as newer technology arrises. When the P4's first hit, you could buy a P4 1.7 for a couple hundred. Now you can get a P4 3.0 for the same price. Or even a Xeon for that price. Bandwidth used to be a few hundred per megabit. Now carriers are charging less because it costs less. But as bandwidth prices go down, the demand for it will rise. Soon enough, dial-up will be unheard of and fiber optics will run to houses. That would mean the bigger guys would have to pay more to get speeds way faster than residential. I think it's just a very very small recession. When cash flow becomes more and more (which will happen in about 3-4 years) prices will raise because people have more money. However, if you don't raise, then you're making less and cant compete. It's simple business logic that the "kiddies" who start hosts at young ages thinking they can make tons and do no work, will not understand. I also agree with lower pricing higher volume. Ev1Servers is a prime example. The owner makes more money than almost every dedicated server host in the world. But to protest lower pricing is wrong. It shows you're afraid that they may take clients from you. What you need to do is prove to the people who normally pay less that they will be much more satisified paying more. I recently received a deal at HE for a cheap price. I said no, simply because it was too cheap. I am taking a deal that is 2x the price just so i can feel better about it. Anyway I better wrap this up but to conclusion it just depends on how you think about it and how you go about things.

  9. #9
    Join Date
    May 2002
    Location
    east coast
    Posts
    64
    "If you consider $4.00 a month cheap for 100 MB of space and 2 GB of transfer, then your paying too much."

    Well, I think I have to disagree with that statement a little bit. Companies can charge whatever they like and I think that if they can make money and have a plan for future growth that fits with their costs, that is fine.

    However, your statement seems to (doesn't mean it does- just drawing an inference) support one of the widespread misconceptions in the industry- bandwidth + disk space are the most important elements in determining the price of a hosting plan.

    To me, while the bandwidth and disk space are very important, I think that more important (but less talked about) elements are security, disaster recovery, skill/speed of technicians, quality of bandwidth, quality of server, quality of network, spam/virus prevention options, etc.

    Just about anyone can purchase an ev1 (or similarly priced server) and charge $5 or less per month for hosting, but that doesn't automatically guarantee that they are a legitimate hosting option for a serious web site.

    What steps are taken to prevent hackers entering the system? What are the uptime guarantees (maybe more importantly, what are the uptime guarantees for the network provided by the data center)? What are the backup plans if a hard drive fails (again, maybe more importantly, is the backup just a Raid copy, or is it legit backup that can be restored from weeks ago)?

    Those are just a few ideas, and I know everyone has their own opinion- that's just mine.

  10. #10
    Join Date
    Jan 2004
    Posts
    7,033
    well to put it I am going to be more higher priced (since I am going local way) my lowest plan is $7.95 for 100 mb disk space and 2000 mb bandwidth.

    also if you can not compete on price then you shouldnt be in business.

  11. #11
    Join Date
    Dec 2003
    Location
    UK
    Posts
    652
    Are you against all budget hosts ? If so then I take it then I should stop offering hosting at my current prices, up the prices and hope my customers understand that it's better for them ?

    Not everyone wants (or needs) hosting from a big company with big overheads with fancy support systems. There are countless hobbiest sites out there who just want a cheap place on the net and are happy to pay less and not expect the world.

    I now have a server, but prior to that I was running on cheap (and not so cheap) reseller accounts, the cost difference seemed to make no difference in quality of service, in fact I often had more problems with the expensive providers.

    Whilst there's a demand for cheap services, then there will be cheap providers, just like budget PC manufacturers or even cheap 2nd hand cars !

    I guess I could make more by overselling or joining these annoying popup programs, but I choose not to. If I get a customer who wants to run a web store or has a critical site, then I'd choose not to sell them a budget package, but provide them with a solution based in a datacenter with guaranteed high availability, enforced SLA's etc...

    The customer should be asking if the potential provider understands the business requirements and is offering a solution based on need, not price. If my customer's need is a £10 solution, then he gets offered a £10 solution with an indication of the limitations etc... not a £30 one.

    I guess at the end of the day it comes down to business practise and ethics. Being cheap doesn't make you a con artist, but being expensive doesn't guarantee service.

  12. #12
    Join Date
    Jun 2001
    Posts
    740
    I think (well, I hope) most people can tell the difference between hosts who are legitimate companies and hosts who are 14 year olds.

    I remember posting a topic here stating that 14 year olds can't run companies, and a MASSIVE amount of the responses were "I'm 13 and I run a hosting company" etc etc.

    This, I think, is the problem with the hosting industry, rather than people trying to compete on price.

    Remember, most people's websites use tiny resources/traffic. The cheap hosts know this so their 1 gig space/40 gigs transfer a month for $8 is simply playing on this...

  13. #13
    Aussie, I'm riding out WebHostXL. They are the worst in the business. Actually I use www.CrystalTech.com with our other website www.chartshops.com. Excellent, excellent service, and I've been around so I should know.

    Some of you are missing the main point of protesting "Ultracheap" hosting. First, it's not the hosters themselves but the pricing structures they are using. They are allowing low budget substandard fly-by-night carpet bagger business to hurt the other very deserving businesses around them. Like allowing Marilyn Manson to move into your nighborhood would decease the value of your home on the open market.

  14. #14
    Join Date
    Dec 2003
    Location
    UK
    Posts
    652
    People want cheap everything, and I guess most of them know it's not necesserally good for them. Just look at the queue in the average burger bar !

    Some people shop by price, others by value for money.

    I can't see how you're ever going to stop people from buying a substandard product from a fly by night outfit whatever the market sector.

  15. #15
    Yeah, lowball pricing sure hurt Walmart...




    Do a search of WHT for the words "cheap" and "low cost", etc...see how many hits you get.

    Then do a search for the words "over-priced" and "high priced" and see what you get.

    Market demands low cost hosting for the masses. This is not saying that a mission critical site for a business should run on a $4 a month hosting account. That's simply a bad decision on the part of that business owner and they deserve what they get. And to be honest, I've see JUST as many crappy hosts at the higher end as well. Price is NOT always indicitve of quality in this business.
    Last edited by ArtieFishill; 03-15-2004 at 12:18 PM.

  16. #16
    Greetings:

    How many of you buy milk, bread, and other groceries at least several times a month?

    Would it be fair to state that while you may not have prices at various grocery stores memorized, you are a fair judge as to whether a given grocery item is over priced or whether to look twice at the expiration date?

    Most people who would see milk at $.10 per gallon in the U.S. would be checking to see if the milk is spoiled or if a special was being run.

    What does this have to do with Web hosting, budget hosts, and otherwise?

    Well, unfortunately, the Web hosting industry is a land mine for consumers.

    Host A over there charges $0.50 per month for what appears to be the same thing Host B over here charges $25 per month.

    I cannot speak for tomorrow; but today, there is a difference behind the scenes between these two companies and many others like them.

    Under present conditions, it is no wonder that you can read about posts in Web Hosting Talk discussing how many times in six months or less that a given consumer switched hosting providers!

    ===

    Greetings Gargoyle:

    “Commoditization occurs in almost every industry - basic economics states its an inevitable cycle in a product lifecycle.”

    When you are just dealing with products like milk and pencils, I would agree with you.

    The moment you throw in service, then that changes the ball game.

    I will agree there are elements of the Web hosting industry that can be turned into a commodity; and companies like EV1Servers are doing a very good job at it.

    However, just like Microsoft Visual BASIC didn’t turn everyone who could use a GUI interface into a programmer, owning one or more servers doesn’t turn everyone into a quality Web hosting provider.

    “To make a claim that no one wins when business competes through price just isn’t accurate.”

    How many winners within a market segment win when they compete on price?
    “Just take a look at Michael Dell. Dell has practically monopolized the Intel business by streamlining their supply chain and synchronizing this with an advanced forecasting system.”

    Does this mean Michael Dell uses his God given brains, created a business plan, worked on the plan, made changes to the plan as necessary?

    Does it also mean Michael Dell worked the entire system to allow him to offer such price points, and continue his business?

    Hmm… do you think Michael Dell would be where he was at today if he just sold PC’s as cheap as he could without doing anything else (i.e. without streamlining the supply chain, forecasting, etc.)?

    “Fact is, Dell was able to produce the product faster and cheaper, and was ultimately able to pass those savings onto their customers.”

    Key word is “product.”

    “Bottom line is - Dell forced the industry to push their prices down and ultimately turned PC's into a commodity.”

    PC’s are a product, correct?

    And how many top PC makers can you name within 30 seconds?

    Doesn’t that tell you that the PC industry is similar to the car industry with very few manufacturers in the industry worthy of having their name known?

    ===

    Right now, most (not all) of the hosts on WHT develop their pricing based on pure technology costs.

    They get a server for as low a price as they can get. Most appear not to take into account any service level agreements or look at infrastructure for growth; it is one server at a time.

    Then they determine how many clients they can pack on a server.

    So they get a server for $50 per month; pack 200 to 300 sites on it, and figure that if they charge for anything over $0.25 per month they are making a profit.

    More often than not they don’t take into account what’s necessary to secure, and keep secure the servers they rent.

    More often than not they don’t take into account paying themselves fair wages, and having money enough to hire staff as they grow (paying them fair wages).

    Of note, in terms of budget hosts…. There was a post just the past week where a “budget WHT host” was claiming most hosts in the industry do not pay their staff (sigh).

    Thank you.
    ---
    Peter M. Abraham
    LinkedIn Profile

  17. #17
    Such a long post :-)
    As for me everything is more easier. Like in any other field of economics there are several types of competition. We can devide most of them into 2 groups - price and non-price competition. So if hoster able to provide really quality service less than other web host with a such quality of provided services - that is good thing for him and its clients. Many web hosting providers have wide variety of web hosting plans starting at very low prices (for home pages) and till very expensive plans (for huge ecommerce solutions).
    So, if web hosting provider able to provide affordable web hosting without decreasing the quality of providing services - that is great thing!

  18. #18
    Excellent point about the web host companies themselves not charging enough to survive growth. Someone starts up their own hosting service and figures all theey need is $.50mo for 200 sites to be making a profite for just one owner. Fine for them, bad for the customer.

    If I was to start my own hosting I would certainly figure the cost of a 1000+ site environment looked after by a fulltime technician or two, a staff of 3-5 support personal at least, the facility cost to house your own servers, cost of new servers per x sites, cost of software upgrades, paying an accountant, retaining a lawer, income taxes, payroll expense, marketing cost, sales staff, and etc. Then figure out what you want to charge per month. You make a killing at first but you should put all but what you need back into service and marketing till you need to hire staff.

    You know how it works, right? If not, don't start a hosting company.

  19. #19
    Hi dynamicnet -

    Firstly, let me say it sounds like we are much on the same page.

    However, I would like to address a couple of your points...

    When you are just dealing with products like milk and pencils, I would agree with you.

    The moment you throw in service, then that changes the ball game.
    I would agree with that to a certain extent - especially when dealing with traditional services like electrical, plumbing, etc..

    IT services are following a different curve. Technology (hardware) prices are falling, saturated skilled workforce, large open source communities making products like OS's, ecommerce apps, erp apps, etc, all readily available - have all contributed to a commodity like effect, even for the services business. This is quite unique to IT services, as you will not see this phenomenom WRT to more traditional services.

    Think about it - what would it have cost you 3-5 years ago to put together a fully functional ecommerce site - from design to hosting - all services, yet they have all been commoditized to a fairly large degree...

    owning one or more servers doesn’t turn everyone into a quality Web hosting provider.
    Agreed !

    Hmm… do you think Michael Dell would be where he was at today if he just sold PC’s as cheap as he could without doing anything else (i.e. without streamlining the supply chain, forecasting, etc.)?
    Yes & No - Dell's objectives were to sell PC's as cheap as possible and undercut the competition, sometimes to the point of taking losses in order to win marketshare. Of course they had to find ways to bring their product to market cheaper, and as such realized that improvements in their supply chain and forecasting would allow them to do so.

    They were able to streamline their procurement supply chain, and their forecasting and distribution processes, as such, they were able to commoditize their respective offerings (in Walmarts case, most items they sell were already commoditized, therefore they were able to further reduce the market price through streamlining their processes)

    Right now, most (not all) of the hosts on WHT develop their pricing based on pure technology costs.

    So they get a server for $50 per month; pack 200 to 300 sites on it, and figure that if they charge for anything over $0.25 per month they are making a profit.

    More often than not they don’t take into account what’s necessary to secure, and keep secure the servers they rent.
    Agreed - which is why I originally mentioned that some pricing just cannot be maintained, no matter how well a hosting company has streamlined their processes (ie - automation of admin, so less staff is required, commodity negotiation - actual price for hardware, bandwith, etc.., streamlining support processes so less staff is required, etc, etc, etc)

    Because of all the processes involved in the hosting service industry, it can effectively be viewed as a product offering. In todays economy, more and more services are taking on the characteristics of products and as such are subject to commoditization.

    Of note, in terms of budget hosts…. There was a post just the past week where a “budget WHT host” was claiming most hosts in the industry do not pay their staff (sigh).
    If this is true, it is truely a sad statement and a classic example of a bad business plan..

  20. #20
    Join Date
    Nov 2000
    Location
    San Diego
    Posts
    3,407
    This thread was painful to read and certainly shows what is wrong in an industry needing fallout. You can certainly see the ones who start hosting as a reseller, learn a few 'economic' buzzwords, and then add CEO next to their name. Kills me. They have no grasp or concept of business. No names mentioned.


    Unrelated .....

    (in Wal-Mart's case, most items they sell were already commoditized, therefore they were able to further reduce the market price through streamlining their processes)
    This has nothing to do with Wal-Mart. dynamicnet made a great point. Do not confuse product with service. While technology prices drop, there will never be a black hole to further shrink the bottom line. And yes, everything has a bottom line. We are approaching 0 - which would be impossible for profit.

    Do not use Wal-Mart in commoditized, shared hosting arguments. This seems to get brought up all the time. Wal-Mart is nothing like a large host. First off. Compare Wal-Mart's financials with the largest host in the world. Second, Wal-Mart didn't win by "streamlining their processes". If you believe this, then explain some of this streamlining you are talking about. Wal-Mart wins by volume and volume alone. I know. I have worked with million dollar companies fighting to get product into the Wal-Mart's and Costco's of the world. It is simple. You sit down. They tell you how much they will pay. You say yes or no. If you have some new product with tons of buzz, there is some wiggle room.

  21. #21
    This has nothing to do with Wal-Mart. dynamicnet made a great point. Do not confuse product with service. While technology prices drop, there will never be a black hole to further shrink the bottom line. And yes, everything has a bottom line. We are approaching 0 - which would be impossible for profit.
    Agreed, however, prices are indeed dropping - as you said, nothing has a value of zero, but corporations are learning to pull costs out of processes, hence saving costs and lowering prices - this is an inevitable process. Of course dynamicnet has made a great point, however, do not get confused, many services are being commoditized.

    Do not use Wal-Mart in commoditized, shared hosting arguments. This seems to get brought up all the time. Wal-Mart is nothing like a large host. First off. Compare Wal-Mart's financials with the largest host in the world. Second, Wal-Mart didn't win by "streamlining their processes". If you believe this, then explain some of this streamlining you are talking about. Wal-Mart wins by volume and volume alone. [/B]
    Walmart did not win and does not win on volume alone.

    When Walmart first announced that they were going to change the relationship model with suppliers, they were laughed at. Walmart effectively removed the middle man in typical supplier/distribution relationships by adopting the first real-time supply chain inventory system, that linked each individual teller with a central data repository. This repository is linked, in real time with the suppliers and updates and supply status are monitored hourly. Walmart is also in the process of implementing mandatory RFID abilities for their suppliers in order to further streamline their supply chain and squeeze even more money out of their costs. RFID will enable them to have real time data on delivery, down to the second. Presently, they have asked their top 100 suppliers to join the pilot, with mandatory compliance by all suppliers by 2005.

    Their supply chain, their unique supplier relationships and their commitment to constantly inprove on their established procurement, supply chain and inventory processes are what enables Walmart to be bigger, faster and cheaper then anyone else - not their volume...

    Heres a nice little article for you to read...

    http://scrc.ncsu.edu/public/DIRECTOR/dir031103.html

    This thread was painful to read and certainly shows what is wrong in an industry needing fallout. You can certainly see the ones who start hosting as a reseller, learn a few 'economic' buzzwords, and then add CEO next to their name. Kills me. They have no grasp or concept of business. No names mentioned.
    LOL - If you are to make comments like that, I at least suggest you validate them first... Anyone that suggest Walmart's success is based on volume, obviously doesnt have a firm grasp on financial levers and honestly shouldnt be making such assumptive comments about anyone and their "grasp or concept of business"
    Last edited by cartika-andrew; 03-15-2004 at 03:32 PM.

  22. #22
    Join Date
    Mar 2004
    Posts
    37
    Don't mix up cost and value. No matter what they are buying, many consumers ignore value and buy based on cost. They often spend more money in the long run because they replace a cheap item several times rather than buy a good one once.

    It does no good to yell at (or picket) the low cost/quality manufacturer. You need to educate the consumer. But you'll never convince everybody, so there are always going to be low cost, low quality providers as long as there are consumers who buy based purely on cost.

    There are 10,000 basement PC "manufacturers" out there with cheaper prices than Dell, but they haven't stopped Dell from selling thousands of computers, and still undercutting IBM prices.

    The educated consumer goes to Dell and gets a better value for their money. The consumer buying based on price goes to "Joe's Bargain Basement" and gets what they paid for. If they learn from their mistakes they buy a Dell next time. If not, they end up at "Bob's Bargain Basement" next time.

  23. #23
    In my opinion there are only a few ways to compete on price in a service driven market. Here are just a few of those ways;

    1) Short term specials with detailed forecasts that speculate on obtaining a number of long-term normal price paying customers

    The costs for the specials are considered much the same, as advertising costs would be. If there is no ROI in the campaign then a new campaign must be initiated.

    2) Subsidizing your low costs with other revenue streams

    In the web hosting industry using an associated service like web design can be a good way to do this. An example; about 15% of our local clients use our services to create their Internet business presence from start to finish including web maintenance. The recurring maintenance allows for predictable monthly revenue streams that allow our pricing scheme to be what it is now. If this percentage were to drop below 10% our pricing would have to increase to provide the same level of service.

    3) Overselling your resources;

    This is the most common method used in the low price wars that are seen today. Some of these companies are still around only because their clients do not use all of what they pay for. While we all know a product driven market is different than a service driven one, could you imagine how low Wal-Mart pricing would go if a small portion of the people that paid for their $20.00 kitchen set actually took it home?

    In my opinion, the vast majority of the low cost budget providers are either using deceitful sales tactics, offer sub standard services or just flat out oversell their capabilities. The bottom line is that quality service costs money. Good hardware, solid networks, and top shelf Sys Admins are not cheap. There is only so much that can be cut before those cuts affect the level of service provided.

    Now I won't be responding to any of the normal overselling arguments in this thread, this has all been discussed to death before. I will leave everyone with this thought. If your heater breaks in the middle of the night and all the water pipes in your home are on the verge of freezing and breaking, would you want to hire a cheap Heating company? Or would you want to hire a good Heating company?

  24. #24
    Well said daverj !

  25. #25
    Join Date
    Mar 2001
    Posts
    1,434
    My 2 cents...

    (I use the word "everyone" as a generalization)
    Everyone talks about Wal-Mart, Dell, and these other giants of the industry, yet 99+% of all businesses here at WHT are more akin to the local grocery store or local PC shop when compared to these large corporations. Yet everyone states how these large companies succeed, and then try to mimick these practices such as cut-throat pricing, volume based sales, and tactics to drive out other businesses in the industry.

    However, if you look at how the smaller local physical stores such as the local market or computer shop competes, it is often the exact opposite of these behemoths. And since the local stores seem to do quite well many times, it must mean they are doing something right.

    Now let's look at web hosting. Trying to compete by having the lowest price or by selling on extreme volume is not practical for a small to medium sized webhost. There are only a few large companies such as 1&1 or EV1, and these companies have resources that the smaller hosts (at least those who have posted here) do not have. So, us "smaller" hosts must use different tactics or strategies to succeed. You must differentiate your services and company from these big hosts, or else they will win based on their vast resources (generally speaking).

    So, how do you do this? Well, for each niche or market, there is a different method. But, generally speaking, if a big hosts seems impersonal, you push personal service. If they do not have a specific piece of software or config setting that people want or need, you provide it. You fill in the gaps, do the opposite of what they do, etc... to offer something different that others would want. Small traditional businesses do this every day, and it's often quite successful.

    For us, it's offering a professional and reliable business level solution for ecommerce websites that delivers personalized service and software that is "best of breed" in its market. We focus on support, communication, and stability. Our price is as low as we can have it to make sure we come through on 100% of our statements on our website. This means that we do not have the lowest price (and probably means that we have one of the highest prices in WHT land). However, our clients are not personal sites, game sites, etc... so it works for us.

    ok, 3 cents...
    Every company treats the definition of profits and "lots of money" differently. This will always be the case, especially in a global market. However, if you set your prices so your income and that of your "employees" is no better or worse than the local hamburger joint, then the motivation to provide "fanatical support" is often lacking in some respects. Pay yourself and your employees more, make the job fun, and you'll see productivity and customer service excel (in most cases). This of course translates into charging a reasonable and well thought out price to achieve this goal.

    5 cents complete.

    - John C.

  26. #26
    Join Date
    Nov 2000
    Location
    San Diego
    Posts
    3,407
    Originally posted by Gargoyle
    Agreed, however, prices are indeed dropping - as you said, nothing has a value of zero, but corporations are learning to pull costs out of processes, hence saving costs and lowering prices - this is an inevitable process. Of course dynamicnet has made a great point, however, do not get confused, many services are being commoditized.
    Ummm. No one is confused here. I think it is obvious other services are a commodity. And again, you can cut cost as much as you like. But 0 is as low as you can go. No one wins at zero. And sorry, but not everyone "lowers prices". Look at another commoditized service -Internet Access. AOL raises their prices.

    You are comparing large corporations streamlining to cut cost. This thread was on "low cost hosting". Big difference. The point is that hosting has an unrealistic pricing model in some companies cause they are run by people with no understanding of business, and think pricing is the key. They think because you buy a $10.00/mo unlimited hosting plan, that you can sell unlimited hosting for $1.00. This creates false models for the uneducated consumer makes it difficult for real companies (new companies starting out) to compete. I do not think you can name another industry that makes the entry barrier so easy for someone to start a business other then hosting. Because of this, a 10 year old can look like a million dollar company, price things that are unsustainable, and then fail only a few years (or less) later. But the damage has been done, because two more will spring up in there place.

    There is a huge disparity in pricing in the shared hosting market. You need to ask why that is. Do not compare it to Wal-Mart or billion dollar corps. These new host that low-ball are not developing better systems, or getting better pricing on things. We all know what it cost to buy servers or build them. We all know how much employees cost. We all know that there is a bottom line. And it unrealistically approaches 0 for many of these new host.


    Originally posted by Gargoyle

    I was a member of the IBM team that helped Wal-Mart implement their vision of a streamlined procurement and supply chain process. When Wal-Mart first announced that they were going to change the relationship model with suppliers, they were laughed at. Wal-Mart effectively removed the middle man in typical supplier/distribution relationships by adopting the first real-time supply chain inventory system, that linked each individual teller with a central data repository. This repository is linked, in real time with the suppliers and updates and supply status are monitored hourly. Wal-Mart is also in the process of implementing mandatory RFID abilities for their suppliers in order to further streamline their supply chain and squeeze even more money out of their costs. RFID will enable them to have real time data on delivery, down to the second. Presently, they have asked their top 100 suppliers to join the pilot, with mandatory compliance by all suppliers by 2005.

    [bold]Their supply chain, their unique supplier relationships and their commitment to constantly inprove on their established procurement, supply chain and inventory processes are what enables Wal-Mart to be bigger, faster and cheaper then anyone else - not their volume...

    [/url]
    Since you seem to know a lot about this, can you answer these questions?
    1) Didn't Costco actually first release this for large volume guys?
    2) Didn't Sam's Club run the test bed for the Wal-Mart stores?
    3) Do you think Wal-Mart was the first chain to automate this way? or where they the first of the big three (K-Mart, Target, Wal-Mart) to?

    Just curious. Thanks.

    Regarding the Wal-Mart argument. Can you name a larger company doing what they are doing? Can you tell me how else to describe Wal-Marts emergence to where they are today? Wal-Mart is a volume operator. Bottom line. Sure, there are other ways to streamline and make things more profitable, but the bottom line is Wal-Mart is able to do what others can not because they have more stores and more purchasing power then the others they have buried. Not to mention the added benefits of having non-union labor and the relationship model with suppliers they dictate. How again? Volume. They can tell their suppliers, if you do not like it, go somewhere else. What supplier is going to decline? Now if Joes Market in 10 locations told Kraft to change their relationship, Kraft would tell them to take a hike.

    You can get down in the weeds and find many ways Wal-Mart is cutting cost like their automation example. But I am telling you it is volume that is the center of gravity of their operation.

    LOL - If you are to make comments like that, I at least suggest you validate them first... Anyone that suggest Walmart's success is based on volume, obviously doesnt have a firm grasp in financial levers and honestly shouldnt be making such assumptive comments about anyone and their "grasp or concept of business" [/B]
    Someone get there panties in a bundle? LOL. My grasp is pretty good. It also comes from experience. You seem to be tangled in the weeds. However, do not get confused, many people do here. You are trying to point out one of many other ways Wal-Mart succeeds. Great. Congratulations. But it is Volume that is king. It is volume that drives Wal-Marts success. Without volume, where would they be? You are comparing an apple to an orange. How can you compare Wal-Mart to a commoditized, standard hosting provider? It makes no sense. Of course certain aspects of any business will be the same as others as those are just fundamentals.

    Also, I do not need to point out the statements I am referring to in my post. They are obvious. Or so I thought. And since I didn't name names, it usually means it was an attempt to only throw out my opinion and not offend named individuals. But of course, others are surely free to disagree.


    Walmart did not win and does not win on volume alone.
    Lets make this simple. Remove "volume" from Wal-Mart and what do you have? Remove this "streamlined procurement and supply chain process" from Wal-Mart and what do you have? If Store A and Store B have the same products, but Store A buys it at 40% the price and sells it 30% cheaper then Store B, who will sell more? Who will win?

    If you do not agree Wal_mart wins on volume, cause no others in their market can drive the purchase prices from suppliers like Wal-mart, then that is fine. Not every one agrees around here.

  27. #27
    Join Date
    Nov 2000
    Location
    San Diego
    Posts
    3,407
    Originally posted by JohnCrowley
    My 2 cents...

    (I use the word "everyone" as a generalization)
    Everyone talks about Wal-Mart, Dell, and these other giants of the industry, yet 99+% of all businesses here at WHT are more akin to the local grocery store or local PC shop when compared to these large corporations. Yet everyone states how these large companies succeed, and then try to mimick these practices such as cut-throat pricing, volume based sales, and tactics to drive out other businesses in the industry.
    <SNIP>

    This of course translates into charging a reasonable and well thought out price to achieve this goal.

    5 cents complete.

    - John C.
    Great points. You always seem to do a better job explaining what I am trying to get across.

  28. #28
    Join Date
    Feb 2003
    Location
    Seattle, WA
    Posts
    541
    I agree with much of what most of you have said but Id like to share my own view.

    First off QoS does not represent the ammount you pay in 95% of the time. Cheaper end web hosting in this market can provide the same if not better service and support then the "high end" hosts.

    The price of hosting today has a lot to do with the other hosts in the industry. Almost all hosts are forced to come down to the low price market to keep customers. Because if you are charging $24.00 for your "high end" service, and a customer of your's talks to a client of a "low end" host and is paying $9.95 for more and not having problems. You might lose a client to that host charging less.

    What I dislike most is the little kids (14 - 16) that know nothing about web hosting except you need a server for it. They are what also puts a big mark on our type of business. I'm not saying the kids that have parents or adults involved and have planned it out are bad. I'm saying in general the kids under 18 are proving to turn this business to crap.

    I my self am now 18 and involved with a partnership, before that I was involved with my parent with a business. Unlike the current kids, I had a business major for a mother.

    Anyways the point of this really is, should be is why as a community (Hosting Business) we can allow the kids to come in and help mess up the business?

    This is something I have never understood. I understand that dedicated server companys and such want to well their products, but if they would just make it a requirement to be 18 or older, and provide proof. Maybe we wouldn't be in such a mess.

    Or maybe our problem with the kids is from the parents.
    Kid: "Mommy daddy I want to rent a dedicated server."
    Parents: "What do you need that for son?"
    Kid: "I want to have a website"
    Parents: "Ok"
    And then the parent doesn't check up on the kid. Kinda like the whole RIAA thing. Just in a diffrent area.

    Am I going to far out on the limb of the tree here or am I on the same page as many of you might be thinking.


    Just my thoughts.

    Good Day,
    Loren
    Last edited by FatalSw1tch; 03-15-2004 at 05:01 PM.

  29. #29
    You are comparing large corporations streamlining to cut cost. This thread was on "low cost hosting". Big difference. The point is that hosting has an unrealistic pricing model in some companies cause they are run by people with no understanding of business, and think pricing is the key. They think because you buy a $10.00/mo unlimited hosting plan, that you can sell unlimited hosting for $1.00. This creates false models for the uneducated consumer makes it difficult for real companies (new companies starting out) to compete. I do not think you can name another industry that makes the entry barrier so easy for someone to start a business other then hosting. Because of this, a 10 year old can look like a million dollar company, price things that are unsustainable, and then fail only a few years (or less) later. But the damage has been done, because two more will spring up in there place.
    Firstly, I am not comparing large corporations with hosting. My only dispute to the original posters comments (if you read back to my original response), was that I agreed with their comments, except for the statement that nobody wins on cost alone - and frankly, thats just not true - lots of people have done it - from the big boys like Dell and Walmart (which were used as an example) to small, shared hosting companies. Obviously prices hit a point where business is not sustainable - and I also indicated this several times - but just because someone chooses price as their value proposition does not doom them to fail (for the record, we are not the cheapest provider by far - as we have not chosen price as our value statement). But to say that any company that approaches this business, and attempts to compete on price alone is crazy and it will never work, is just false..

    Personally, I wouldn't bother, but many have and have done an excellent job at it and excelled in their respective industry...

    Lets make this simple. Remove "volume" from Wal-Mart and what do you have? Remove this "streamlined procurement and supply chain process" from Wal-Mart and what do you have? If Store A and Store B have the same products, but Store A buys it at 40% the price and sells it 30% cheaper then Store B, who will sell more? Who will win?

    Nope - dont agree, and yes, youre right - we can def have differences in opinion. Volume is not what got Walmart to the top (in my humble opinion), though it def helps keep them there now....

    The question you really have to ask is - If volume was so important to Walmarts success, how did they secure the best pricing before they had the largest volume of sales?

  30. #30
    Quote Originally Posted by FatalSw1tch
    First off QoS does not represent the ammount you pay in 95% of the time. Cheaper end web hosting in this market can provide the same if not better service and support then the "high end" hosts.
    I would disagree with this statement. While paying more is not a guarantee that you will be getting better service, most of the low cost providers are not capable of providing service at the same high levels as a provider that can afford to pay his help more. If you have a Tech providing support at $15K a year and another Tech providing support at $35K a year, which tech is more likely to have better qualifications? Which tech would be more likely to provide a better service with more knowledgeable responses?

    John Crowley sums it up perfectly with this statement:
    Quote Originally Posted by JohnCrowley
    However, if you set your prices so your income and that of your "employees" is no better or worse than the local hamburger joint, then the motivation to provide "fanatical support" is often lacking in some respects. Pay yourself and your employees more, make the job fun, and you'll see productivity and customer service excel (in most cases). This of course translates into charging a reasonable and well thought out price to achieve this goal.

  31. #31
    Originally posted by FatalSw1tch


    Or maybe our problem with the kids is from the parents.
    Kid: "Mommy daddy I want to rent a dedicated server."
    Parents: "What do you need that for son?"
    Kid: "I want to have a website"
    Parents: "Ok"
    And then the parent doesn't check up on the kid. Kinda like the whole RIAA thing. Just in a diffrent area.

    Am I going to far out on the limb of the tree here or am I on the same page as many of you might be thinking.

    Id have to agree with that thinking....

    Good thing is - the more this happens, the more people will be willing to pay for hosting from reputable companies

    There will always be people that want the cheapest priced hosting and take the deal of a lifetime for as long as it lasts..

    We (like most others here) just choose not to play in this market space...
    Last edited by cartika-andrew; 03-15-2004 at 05:20 PM.

  32. #32
    Join Date
    Mar 2004
    Posts
    37
    >>> Regarding the Wal-Mart argument. Can you name a larger company doing what they are doing?

    Not possible. They are the largest corporation in the world, with 1.3 million employees and about $250 billion in annual sales.

  33. #33
    Greetings daverj:

    “You need to educate the consumer.”

    I agree with you.

    The catch is educating the consumer where face values appear to be exactly the same when they are not the same.

    Today, the consumer often sees x MB of storage, y GB of data traffic, z mail boxes and so on. They have no real way to measure that business A offers more or less value than business B.

    I’m told NTT/Verio is twice the market cap of AT&T; and yet, most business consumers (at least in NE PA and our own client base throughout the U.S.) have not heard of NTT/Verio (if you spell out NTT, they get it… but they are still clueless as to who is Verio).

    Most businesses in our local area have never heard of Rackspace.com, EV1Servers (or the former name of Rackshack), and so on.

    While on one hand that means the market is still undefined enough for leaders to emerge and gain mind share, it also means that the market is still undefined where most consumers are still learning the difference between a hostess and Web hosting.

    This is our ninth year in business; and November will be eight years for hosting. Yet, we still fight the battle where consumers who know when to question the quality of bread they buy in the super market based on price ranges are clueless as to the quality behind Web hosting.

    =-=

    Greeting Gargoyle:

    http://scrc.ncsu.edu/public/DIRECTOR/dir031103.html is a good link; I passed it onto our staff to read.

    While I do agree there are services being turned into commodities as well as products, I do not believe Web hosting is there yet.

    Data centers like EV1Servers, Rackspace.com, and the like do have the processes in place, the financial where withal etc to make what they do a commodity (for better or worse).

    However, most hosting providers out there who strive for quality do not yet have the means to reduce their own costs while maintaining the quality they strive to present to their clients.
    We use H-Sphere (http://www.psoft.net/) which automates the hosting side of our business like never before. And yet, there are still so many areas where knowledgeable people are still needed to run the show.

    Back in the early to mid 1990’s computer scientists where at their peak (at least in the North East; companies in Berks County, PA that typically were 30 to 60% of the salary of Philadelphia were paying Philadelphia wages).

    And yes, the current economy has blasted that a part; and there has been many lay offs of very skilled people have been laid off.

    However, being unemployed does not mean under valued. The value of a good technician in the U.S. may now be capped far less than before; but the value is still very high (for example, $50,000 per year for a good system administrator with 5+ years experience).

    That said, while product may be dropping in some markets, the other factors that make up the cost of producing quality service has not dropped significantly.

    In ending, this means that budget hosts are more likely than not walking on dangerous ground because chances are high they are not calculating their pricing correctly for operating their business in the future.

    That’s a dangerous proposition for the consumer who thinks they are getting a bargain today only to find their Web host hacked, out of business et all down the road.

    Thank you.
    ---
    Peter M. Abraham
    LinkedIn Profile

  34. #34
    Join Date
    Nov 2000
    Location
    San Diego
    Posts
    3,407
    Originally posted by Gargoyle

    The question you really have to ask is - If volume was so important to Walmarts success, how did they secure the best pricing before they had the largest volume of sales?
    Actually I do not. Because your ideas and mine do not meet eye to eye. I know the answer.

    Let me just throw out a fantasy land scenario. You are given 100% power to represent the US Gov't. You are flown to Arkansas and you get to sit down with the boys and girls on Wal-Marts board. You then deliver two choices.

    1) You are to accept handicapping by agreeing to buy uniform, set-priced products that are standard to ALL others. So another words, gov't regulation on what things can be bought for. Ex... Wal-Mart and Joes Market both pay $1.00 for a box of cheese balls.

    or -

    2) Wal-mart is required to share their streamlining and integrate the who concept with all their competitors. There by balancing things on the automation level.

    Which do you think Wal-mart would pick? I believe that it would be #2 hands down.

    Of course this is all fantasy land stuff, but it drives home the point of what really makes Wal-Mart. The other things help ensure Wal-mart stays ahead. Just like non-union labor (big deal here in SoCal), continuance of building new stores before others can't move in, etc....

    I think our differences come from two sides on experience. You saw them at a different level then I. I saw them from the level of trying to get a product on their shelves. I see the way they force suppliers to accept some crazy pricing in order to reach the 'volume' of stores they have to offer.

  35. #35
    Join Date
    Nov 2000
    Location
    San Diego
    Posts
    3,407
    Originally posted by daverj
    >>> Regarding the Wal-Mart argument. Can you name a larger company doing what they are doing?

    Not possible. They are the largest corporation in the world, with 1.3 million employees and about $250 billion in annual sales.
    Thats my point.

  36. #36
    Let me just throw out a fantasy land scenario. You are given 100% power to represent the US Gov't. You are flown to Arkansas and you get to sit down with the boys and girls on Wal-Marts board. You then deliver two choices.

    1) You are to accept handicapping by agreeing to buy uniform, set-priced products that are standard to ALL others. So another words, gov't regulation on what things can be bought for. Ex... Wal-Mart and Joes Market both pay $1.00 for a box of cheese balls.

    or -

    2) Wal-mart is required to share their streamlining and integrate the who concept with all their competitors. There by balancing things on the automation level.

    Which do you think Wal-mart would pick? I believe that it would be #2 hands down.
    This answer may surprise you...but obviously we will not agree on this.

    I think our differences come from two sides on experience. You saw them at a different level then I. I saw them from the level of trying to get a product on their shelves. I see the way they force suppliers to accept some crazy pricing in order to reach the 'volume' of stores they have to offer. [/B]
    Fair enough - I see them from a level of trying to increase their efficiency 1 % point at a time - and by their numbers, each % represented millions and millions of dollars. I can tell you one thing with certainty, Walmart executives have a greater focus on streamlining their processes vs commodity negotiation. They feel there's alot more money on the table there vs negotiating a better purchase price from their suppliers. This isnt actually tough information to come by, just browse the internet for public statements by their CEO. However, eventually, they will not be able to pull any more costs out of their supply chain (or other processes) and will be forced to whip the suppliers for some more margin...

    Anyway - thanks for the banter, I did enjoy it....
    Last edited by cartika-andrew; 03-15-2004 at 05:55 PM.

  37. #37
    Join Date
    Nov 2000
    Location
    San Diego
    Posts
    3,407
    Originally posted by Gargoyle
    This answer may surprise you...but obviously we will not agree on this.



    Fair enough - I see them from a level of trying to increase their efficiency 1 % point at a time - and by their numbers, each % represented millions and millions of dollars. I can tell you one thing with certainty, Walmart executives have a greater focus on streamlining their processes vs commodity negotiation. They feel there's alot more money on the table there vs negotiating a better purchase price from their suppliers. This isnt actually tough information to come by, just browse the internet for public statements by their CEO. However, eventually, they will not be able to pull any more costs out of their supply chain (or other processes) and will be forced to whip the suppliers for some more margin...

    Anyway - thanks for the banter, I did enjoy it....
    It is very hard to squeeze suppliers when you squeezed the crap out of them in the first place. So the obvious choice is to start cutting other places. But of course in time they will come back to their suppliers once their suppliers have learned to find ways to streamline to cut their cost. Funny how that works.

    public statements by their CEO
    Those are the same public statements that tell us Wal-Mart doesn't destroy mom-pop shops in your community too.

  38. #38
    Originally posted by dynamicnet
    Greeting Gargoyle:

    http://scrc.ncsu.edu/public/DIRECTOR/dir031103.html is a good link; I passed it onto our staff to read.

    While I do agree there are services being turned into commodities as well as products, I do not believe Web hosting is there yet.

    Data centers like EV1Servers, Rackspace.com, and the like do have the processes in place, the financial where withal etc to make what they do a commodity (for better or worse).

    However, most hosting providers out there who strive for quality do not yet have the means to reduce their own costs while maintaining the quality they strive to present to their clients.
    We use H-Sphere (http://www.psoft.net/) which automates the hosting side of our business like never before. And yet, there are still so many areas where knowledgeable people are still needed to run the show.
    We are most Def Agreed ! The point I was making is that the process of commoditization has begun - for the average company, that point has yet to be reached - but, since DC's like EV1 and Rackspace are able to provide dedicated servers, at the prices they do, it has resulted in commodity type of effect in the market. I do feel there will be a correction at some point, but It may just be wishful thinking here

    We also use hsphere, strictly because it offered a level of automation (right out of the box) that promises (and delivers) on streamlined customer management.

    Of course I agree with you - without qualified, knowledgeable (not too mention well paid and happy) people, it just isnt possible to provide a superior service. this alone prevents the total commoditization of the hosting industry - as good people cost good money and this will ultimately affect your cost structure

    However, being unemployed does not mean under valued. The value of a good technician in the U.S. may now be capped far less than before; but the value is still very high (for example, $50,000 per year for a good system administrator with 5+ years experience).
    Of course - and I in no way meant to reduce the value of this skillset. However, the cost of acquiring this skillset has def decreased - which ultimately is helping drive the cost of hosting down, even in the premier DC's

    In ending, this means that budget hosts are more likely than not walking on dangerous ground because chances are high they are not calculating their pricing correctly for operating their business in the future.
    Agreed !!


    That’s a dangerous proposition for the consumer who thinks they are getting a bargain today only to find their Web host hacked, out of business et all down the road.
    Agreed - but, some consumers aren't in it for the long haul and will knowingly take the "deal of a lifetime" and ride it out for however long it lasts, then simply switch to another provider and another great deal.

    Im not sure who posted this earlier - but, I must agree with them. the only real solution is to try and educate the consumer. Those that rely on good service, will pay for it - even if its not the first time they pay for hosting and even if its after they already have a bad taste in their mouth. Once they find a good host, the taste will slowly disappear.

  39. #39
    Educating the consumer will be the turning point, however the consumers are being educated by the school of hard knocks right now. While there will always be a market for the budget hosts ( just like there will always be dollar stores) the folks that really depend on their web sites are slowly learning what it takes to give them what they need to be successful...

  40. #40
    Join Date
    Dec 2000
    Posts
    610
    Originally posted by Watcher_TVI
    Educating the consumer will be the turning point, however the consumers are being educated by the school of hard knocks right now.
    I also think there is a lot of misleading advertising going around to confuse the consumer. Law enforcement will prosecute a person for shop lifting a $4 pack of cigerettes but they turn a blind eye on the host that rips off a consumer or has a site full of misleading/fraudulant marketing statements.

Page 1 of 2 12 LastLast

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •