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  1. #1
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    Is it really the host, or the customer?

    Just like most of you i too am tired of seeing these hosts offer so much for so little and we all know the cant do it.

    Overselling, but lets not get into that.

    Lets look at customers for a bit, look at the customers coming here looking for hosting, they all want tons for less and some of them will go cheap even with bad reviews because, well they are cheap people.

    So now lets think, are hosts really doing this to beat the rest of us out of the water or do they just realize that its what the consumer wants?

    I dare anyone to look at my plans, they are so far from oversold its not funny but i also know that it makes certain customers look away. After all lets face it there are different types of customers, most businesses (which seems to be what i host mainly) don't care much about space and bandwidth but uptime and reliability. Then i think there are (no offense) but younger customers with blogs that want to host tons of media for whatever purpose and they want a lot of space and bandwidth but they really don't want to pay much.

    What do you think?
    - Steve D
    SERVBoston: Hosting since 2003
    Shared, Reseller, VPS.
    Top Notch Support from a veteran hosting company!

  2. #2
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    Quote Originally Posted by Hades
    Just like most of you i too am tired of seeing these hosts offer so much for so little and we all know the cant do it.

    Overselling, but lets not get into that.

    Lets look at customers for a bit, look at the customers coming here looking for hosting, they all want tons for less and some of them will go cheap even with bad reviews because, well they are cheap people.

    So now lets think, are hosts really doing this to beat the rest of us out of the water or do they just realize that its what the consumer wants?

    I dare anyone to look at my plans, they are so far from oversold its not funny but i also know that it makes certain customers look away. After all lets face it there are different types of customers, most businesses (which seems to be what i host mainly) don't care much about space and bandwidth but uptime and reliability. Then i think there are (no offense) but younger customers with blogs that want to host tons of media for whatever purpose and they want a lot of space and bandwidth but they really don't want to pay much.

    What do you think?
    Great post. I really think the problem is because of the gross amounts of competition and the fact that most hosting companies focus on web marketing and thus try to find ways to be competitive. Unfortunately most have dropped the value concept and went straight ahead to being cost competitive - thus selling ridiculous amounts of resources at nearly unprofitable prices.

    As far as overselling, I'll just agree to disagree with you as I've got a slightly different opinion on it.
    -Robert Norton
    www.SophMedia.com

  3. #3
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    Steve, this is why Walmart will never beat down every last little Mom & Pop independent gift shop... same principle... there will always be the cheap Walmart-mentality crowds. Always. But there are also customers who don't want cheap, who are repulsed by Walmart, who want quality and who are willing to pay an appropriate sum for the service.

    The question is, who is your customer, and what are you doing to reach them?

    If it's the cheap crowd you're trying to attract, then the only USP that you can really rely on is price.

    If it's the QOS crowd you're trying to attract, the price is pretty much beside the point. They are happy to pay what it takes to get the job done right.

    Don't for a minute think that WHT is a litmus for the industry as a whole. As time passes, WHT gets more and more overrun by "cheap." This is a warped snapshot of the hosting industry as a whole. There are a gazillion hosting companies out there which have never been mentioned at WHT, whose principals have never registered at WHT, who frankly couldn't care less about WHT. WHT is great and it serves a wonderful purpose, but as with anything, "consider the source." WHT is an authority, but it is by no means the end-all. There are entire demographics of customers and hosts alike whose absence is glaringly obvious.

    Bailey
    Let's Connect on Twitter! @thatsmsgeek2u || Fighting mediocrity one thread at a time.

  4. #4
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    I think a bit of both. They try to offer the most for the least to attract a certain group of clients as well as too be the lowest cost hosting on the market. Reason I say this is that when one started with low pricing quite a few followed, proving my point of them trying to compete. They also do it as they see there is a market for low cost hosting too, if this wasn't true they would fail faster than some of them already are.

    I have seen some people more confused than anything when they see these low cost huge space/transfer hosts. Some of them will immediately get the impression that there might be something wrong with the hosts or their product. So they tend to think a bit more and try to figure out why and how etc. Once they figure it out, many of those type of clients decide to go with a different host that doesn't oversell. Then there are the other types of clients who don't give it a second thought and just sign up, they get burned many times before they realise that the cheapest option isn't always the best. They are the type of clients who most hosts wouldn't want in any case as they want the world for $3/month. If you want to attract those type of clients, fine go for it, but if you're small or just starting out and don't have the man power to handle a lot of support questions I would definately not suggest it.

    As for the overselling. My opinion on overselling is that it's fine if managed properly. In my opinion overselling to create ridiculously sized hosting packages is not managing it properly. I think it can be a very effective tool if it's used to save money to spend in other places like good support. What I mean by this is say you have a server that's got enough clients on it that could use all the space on the server but they're mostly static sites and won't ever use all the space, then you decide to add a few more accounts so as to put off getting another server. This way you will save money for future use for what ever issues you may encounter.
    The most effective way to host your site

  5. #5
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    If it's the QOS crowd you're trying to attract, the price is pretty much beside the point. They are happy to pay what it takes to get the job done right.
    This was my objective from the world go. We make a solid point of underselling and in it's place offered stuff like SSH access, PHP5 and better support.

    Everything goes full circle and the sooner the consumer becomes more educated, the better.

    Best wishes
    RavenServers
    http://www.rskeens.com
    A casual blog mainly about the web hosting industry

  6. #6
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    I honestly think that it is indeed meeting customer demands. That's not to say all customers are demanding this, but a very large portion are. Who's to say that the rest of the market won't switch over with them? Just some food for thought.
    Daniel B., CEO - Bezoka.com and Ungigs.com
    Hosting Solutions Optimized for: WordPress • Joomla • OpenCart • Moodle
    Data Centers in: Chicago (US), London (UK), Sydney (AU), Sofia (BG), Pori (FI)
    Email Daniel directly: ceo [at] bezoka.com

  7. #7
    Everyone is always looking to get something for nothing (or something close to it) when searching for a web host. Blame should probably be laid at the foot of the hosts. They've gone cheaper and cheaper in order to get as many accounts as possible, which has in turn, led people to believe that every web host should be just as cheap. Just imagine what the world would be like if lawyers and mechanics competed for business this way!

    Anyway, my philosophy is that for every person looking for the bargain basement deal, there are two other people who know that if you want a good host service you have to pay a fair price.
    InfTek Hosting
    Shared and Dedicated Kerio MailServer Solutions
    http://www.inftekhosting.com

  8. #8
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    Blame should probably be laid at the foot of the hosts.
    Actually, blame should be laid on the individual, and the industry not the host.
    The industry should define a standard by which things should be charged. Not limiting actual packages, but limiting what can (and should) be offered in a shared host.

    The individual, however expects everything for nothing any more. This isn't the host's fault, this is the fault of the individual. High expectations for low prices lead (always) to no good. Unfortunately, people just don't get the fact that when you pay bargain basement prices for services, you're going to get bargain basement quality, for both service and support.
    Tom Whiting, WHMCS Guru extraordinaire
    Linux problems? WHMCS Problems? Give me a shout
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  9. #9
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    thanks for all your replies so far guys, its becoming and interesting read.....
    - Steve D
    SERVBoston: Hosting since 2003
    Shared, Reseller, VPS.
    Top Notch Support from a veteran hosting company!

  10. #10
    I wasn't emphatically saying that blame should fall on the hosts. There are strong arguments for both sides. I think hosts get too carried away sometimes. They become so obsessed with gaining more business that they offer features at prices that make it impossible to earn a profit without getting a lot of clients. In addition, they usually can't meet all of the service demands that come from doing this.

    Of course, individuals don't help the matter. But while individuals might demand a low price, it doesn't mean they should always get it.
    InfTek Hosting
    Shared and Dedicated Kerio MailServer Solutions
    http://www.inftekhosting.com

  11. #11
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    Quote Originally Posted by linux-tech
    Actually, blame should be laid on the individual, and the industry not the host.
    What blame?

    Do you blame Intel that the CPU in your computer is 800 times faster than it was 3 years ago?

    The storage and bandwidth numbers are meaningless now. Not only are they meaningless, some are so high they are abstract. Your customer has no idea what 1000gb of bandwidth is. They won't use it in their lifetime.

    But see how the tide turns -- a sizable host has finally realized that the big numbers work against them:

    http://blog.dreamhost.com/2007/01/03...m-resolutions/

    So how do you make yourself stand out now?

    Offer less. Go against the grain. No one needs 10gb of web site space. Not for anything I want to host.
    datapimp - You only get one soul, ya dig?

  12. #12
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    Do you blame Intel that the CPU in your computer is 800 times faster than it was 3 years ago?
    The difference between a CPU and the hosting industry is very simple.

    A CPU is expected to grow. As part of a computer, which (obviously) outdates itself, the CPU will grow exponentially. As it grows, cost will as well grow.

    Typically, when costs grow, industry costs, as well, grow. With the hosting industry, however, there has been no growth in cost, only cuts.
    Why?
    The individuals don't expect any raise in prices. In fact, it's been proven time and time again, that raising prices on individuals will cause massive chaos and get customers upset.
    Individuals don't know jack about the actual cost of hosting, nor, honestly, do they care. What they DO know, and care, about is their bottom line. They want everything for nothing, and if you're not going to give it to them, they're going to go somewhere else where they CAN get it.

    This is where the industry being blamed comes in.
    The industry, as a whole, has set forth no baseline pricing and packages. This means, of course, that it is ok for any johnny teenager to come in and underprice any business , no matter how unreasonable the cost is.
    Tom Whiting, WHMCS Guru extraordinaire
    Linux problems? WHMCS Problems? Give me a shout
    Check out my WHMCS Addons

  13. #13
    So now lets think, are hosts really doing this to beat the rest of us out of the water or do they just realize that its what the consumer wants?
    I think when people decide they need to host a web site, for the most part they have no idea what they need. So they do what consumers seem inclined to do: do some web searches, check out ads, and draw up a spreadsheet that lists features vs cost. Knowing nothing else they'll go with the best price for the most stuff, hopefully from a big advertiser with the assumption that they're finding an established quality brand (which implies a good service, or at least an average service).

    Not saying it's a good thing, but I think it probably works to bring in new clients. Once they're there and set up 3 e-mail addresses and use 100 MB/month (out of 1,000GB allocated) they're likely to stay around unless something happens to make them want to reevaluate all the available options again. Which means they'll stay until things get bad enough that they need to leave.

    From a provider's perspective this is great: lots of new business, and no-one's using anywhere close to the alotted resources. Well, some will, but if 0.1% of users are maxing out their accounts it seems like it'd be hardly a blip.

    Not that I have any interest in going this route -- personally I'd rather have a couple hundred clients who value uptime and service and are willing to pay a bit more -- I have no interest in growing a business beyond that level. But it certainly appears that a well-managed overseller could offer reasonable service and grow a business quickly using this strategy.

    Then again, look at the success of McDonalds (average food, average service -- basically a cheap meal of known quality) versus a higher-end restaurant like Ruth's Chris. There's a strong market for good enough for a low price. This isn't to say that the oversellers commonly referenced are offering bad service/product or anything -- just that there seems to be a strong market for "good enough" sold cheap. The fact that some offer considerably better than "good enough" at a cheap price doesn't really affect what I'm talking about here.

  14. #14
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    Quote Originally Posted by dzeanah
    I think when people decide they need to host a web site, for the most part they have no idea what they need. So they do what consumers seem inclined to do: do some web searches, check out ads, and draw up a spreadsheet that lists features vs cost. Knowing nothing else they'll go with the best price for the most stuff, hopefully from a big advertiser with the assumption that they're finding an established quality brand (which implies a good service, or at least an average service).

    Not saying it's a good thing, but I think it probably works to bring in new clients. Once they're there and set up 3 e-mail addresses and use 100 MB/month (out of 1,000GB allocated) they're likely to stay around unless something happens to make them want to reevaluate all the available options again. Which means they'll stay until things get bad enough that they need to leave.

    From a provider's perspective this is great: lots of new business, and no-one's using anywhere close to the alotted resources. Well, some will, but if 0.1% of users are maxing out their accounts it seems like it'd be hardly a blip.

    Not that I have any interest in going this route -- personally I'd rather have a couple hundred clients who value uptime and service and are willing to pay a bit more -- I have no interest in growing a business beyond that level. But it certainly appears that a well-managed overseller could offer reasonable service and grow a business quickly using this strategy.

    Then again, look at the success of McDonalds (average food, average service -- basically a cheap meal of known quality) versus a higher-end restaurant like Ruth's Chris. There's a strong market for good enough for a low price. This isn't to say that the oversellers commonly referenced are offering bad service/product or anything -- just that there seems to be a strong market for "good enough" sold cheap. The fact that some offer considerably better than "good enough" at a cheap price doesn't really affect what I'm talking about here.
    Great post a very true.
    - Steve D
    SERVBoston: Hosting since 2003
    Shared, Reseller, VPS.
    Top Notch Support from a veteran hosting company!

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