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  1. #1
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    QUALITY & CHEAP - Does it exist?

    Hi,

    I've noticed A LOT of people always ask for QUALITY, CHEAP hosting. I've always been under the impression that you either go for the quality or for the cheap when you're going to buy something (doesn't matter what, TV, car, hosting, etc). After VERY POOR experience with DV2 and eServers.biz we decided to go for a little more expensive service and moved to NAC where we now are extremely happy. So you could say we now try to offer QUALITY and not CHEAP. Don't get me wrong, I'm not saying that DV2 is bad, but it's more towards CHEAP than QUALITY in my opinion. We also have RackShack, I beleive they also are more towards CHEAP and RackSpace is more towards QUALITY which brings me to my point. So, would a QUALITY CHEAP hosting mean quality support and cheap servers/bandwidth or is there a company offering NAC like bandwidth for RackShack prices that we don't know about? Or maybe there are other ways?

    What do you guys think? Is it possible to offer quality and cheap hosting and still make profit?

    PS. In this post, I'm assuming people that want QUALITY want good uptime, good support and fast servers and fast network.

    Cheers.
    (SH)Saeed

  2. #2
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    Hi Saeed

    I guess that's not possible to offer quality and cheap, unless you use cheap hardware and hire tech from India or a place where you can pay a lot less than the average, I never dealt with RS, DV2, etc, so, I can't really say about their service, but I'm sure, that my peace of mind worth a lot more than $200-$400 per month.
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  3. #3
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    Originally posted by Jedito
    Hi Saeed

    I guess that's not possible to offer quality and cheap, unless you use cheap hardware and hire tech from India or a place where you can pay a lot less than the average, I never dealt with RS, DV2, etc, so, I can't really say about their service, but I'm sure, that my peace of mind worth a lot more than $200-$400 per month.
    Hi Jorge,

    That is exactly what I was trying to say. While at the DV2, we were constantly worried about that our customers in Sweden couldn't reach their sites because of slow downs every single day. It's not worth the headache to save a few dollars.
    (SH)Saeed

  4. #4
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    PS. In this post, I'm assuming people that want QUALITY want good uptime, good support and fast servers and fast network.




    Well I have dealt with DV2 and the Quality as far as Service, hardware and uptime is top notch. If I submit a priorty1 ticket I have an answer in 20 minutes or less, I have had no issues at all with their hardware.
    The network when I signed up was lightning fast they have had some problems the last 2 months with cognet/netrail and things are running a little slower than I like. But my understanding is that by the end of this month that will change again when a new backbone comes online and we will get back our speed back.

    I sleep very well with my servers in DV2.

    Quality and cheap? (if you call $250.00 a month cheap) Yes DV2 is providing it in my opinion and if the network speed comes back up we are golden.

  5. #5
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    Quality and cheap?? IMO, it can't happen.

    You have your server/s at NAC [we have 5 in NAC] and each server costs $X/mth. The cheaper your plans, the more accounts you need on the servers. The more accounts, the higher the loads - the higher the loads, the less stable - the less stable, the less "quality" your clients receive.

    I take it that you populate your servers as per revenue per month. You set your prices with this in mind and kind of work backwards from that point.

    We just lifted our base plan from $20/mth to $25/mth. We'll make no more money but each server will have less accounts and therefore will be more stable with less loads etc. Hence in this instance, the dearer plan provides a more stable server.

    It's dead easy to be cheap but if you're cheap [$10/mth for 30GB transfer etc] then you'll end up with servers that are overpopulated and a constant source of trouble....

    IMO, "Quality" and "cheap" can't be done. Unless of course you run your servers at a loss etc...
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  6. #6
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    Monte, I'm glad you're happy with them. We had a lot of problems when we were with them which is why we decided it was not worth it and moved.
    (SH)Saeed

  7. #7
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    What kind of problems did you have? Just curious..

    So far the guys in the data center have been great to me and the PIII's have been rock solid. Cognet network has kinda sucked on and off for the last 2 months but I have hope when they light the new lines this month that will go away.

  8. #8
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    simple

    NO!

  9. #9
    Yeah, you can give quality with a reasonable price. But giving best quality at the cheapest prices........not possible.

  10. #10
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    Originally posted by Monte
    What kind of problems did you have? Just curious..
    Well, I don't want to bring up the past as it doesn't do anyone any good, but we had some serious network problems from Sweden. Every day, the connection would become unusable for a couple of hours. It might not have been their network, but the route they chose to send data this way. We once had the same problem at NAC, emailed them and a little later they contacted us and said that someone outside their network was having problems so they changed the route and everything was good and fast again That's the good thing, NAC has many to choose from.

    What really pushed us over the edge was the fact that after having our server there for a month or two with clients setup and everything, Shazad (from eServers.biz) tells us that PLESK wants their licence (200 domains) that Shazad given to us in our deal back and that now we either have to pay $500 or they have to reinstall our server with Ensim which meant we had to start all over with that server. Anyways, to make a long story short, we decided that is not the kind of people we would like to do business with so we moved ASAP! That was the best decision we ever made.
    (SH)Saeed

  11. #11
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    In that instance I cannot blame you a bit I would have done the same.

    Dunno maybe they have gotten their stuff together since then, there is no one perfect provider. Lots of people here love webreseller to me they are not worth a **** and totally untrust worthy, but to each his own.

  12. #12
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    QUALITY + CHEAP:
    Of course you can, its very possible.

    Im sorry but i have to disagree with people saying that it is not possible. Take places(there arent many i admit) like fastservers.net. 300GB of bandwidth + Server + Cpanel for 138 a month, thats very cheap in my opinion if you count the excellent support they give.

    Quality + cheap can be accomplish if the providor is purchasing in extreme bulk amounts and balancing overselling professionally.

    If they can do that and dont get greedy along the way there is no reason why they cant accomplish what your looking for, but here is the truth.........................................

    Along the way they either get greedy and begin to oversell to an extreme, cut staff, ignore support issues, or a combination of those..

    Or they descide, HEY we arent making jack ____! And they raise the price. Meaning the customers that signed up in the beginning got quality + cheap and the future customers are just in for quality.

    Just have to be in the right place at the right time and be lucky in my opinion, but it CAN be done.. is it being done right now. Maybe fastservers.net and mchost.com,, other than that i cant think of too many.
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  13. #13
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    Of course it's possible, though I tend to replace "cheap" with "cost effective"...

    Gary

  14. #14
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    Originally posted by jdp29053
    QUALITY + CHEAP:
    Of course you can, its very possible.

    Im sorry but i have to disagree with people saying that it is not possible. Take places(there arent many i admit) like fastservers.net. 300GB of bandwidth + Server + Cpanel for 138 a month, thats very cheap in my opinion if you count the excellent support they give.

    Quality + cheap can be accomplish if the providor is purchasing in extreme bulk amounts and balancing overselling professionally.

    If they can do that and dont get greedy along the way there is no reason why they cant accomplish what your looking for, but here is the truth.........................................

    Along the way they either get greedy and begin to oversell to an extreme, cut staff, ignore support issues, or a combination of those..

    Or they descide, HEY we arent making jack ____! And they raise the price. Meaning the customers that signed up in the beginning got quality + cheap and the future customers are just in for quality.

    Just have to be in the right place at the right time and be lucky in my opinion, but it CAN be done.. is it being done right now. Maybe fastservers.net and mchost.com,, other than that i cant think of too many.
    NO, sorry, its not possible, in some place that will break.

    What bandwidth do they use? what server parts do they use? do they do enought profit?
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  15. #15
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    Quality is very subjective a word - one customers definition of quality may be quite different to anothers.

    The vast majority of the web is sites that people upload once and then leave as is for months at a time, with a low visitor count. They might pay $1 a month and think the quality is great. Then another customer may come along & pay the same $1 but have a very different type of site & really feel that the quality is bad.

    Cheap is subjective too. A dedicated server for $100 / month might be cheap - but for the person that wants a simple site - $100 is incredibly expensive

    Low Quality - Expensive
    Low Quality - Cheap
    High Quality - Expensive
    High Quality - Cheap

    All are feasible.
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  16. #16
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    Of course it can be done. Just ask all those host selling for cheap. The swear they offer quality.

  17. #17
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    Quality and cheap?? NO!
    60% Of my new clients (FOr teh past 30 days) are the people who got traped with the "Quality and cheap" hosting and now looking for a diffrent host.

  18. #18
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    So fastservers.net does not provide quality + cheap?!

    In my opinion they do,

    There arent many out there that do, but its possible.
    You can buy quality hardware for good pricing, you can definately get good connections for low pricing, and if you grow properly and dont get greedy you can definately keep it going..

    I think its ver possible.
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  19. #19
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    I'm talking about cheap, not inexpensive. Cheap is when someone asks for 30GB or more of monthly bandwidth for $15 or less per month. Inexpensive is more like 30GB for $40/mo.

    Let's say you get a server from RackShack which only costs around $100-$150 per month. Now you won't have any bandwidth issues since 400GB is included. You advertise a hosting package for $30 with 1GB space and 50GB of monthly bandwidth and you think to yourself that you can cover the server costs by just selling 3-4 of these packages. How many such customers are you willing to put on the same server? How much will your profit be? Can you pay for extra help if you grow to need it? How about income for you? How many servers would you need to be able to live off of web hosting?

    What many people don't think about is that if a website is using 50GB of monthly bandwidth, it is using a lot of CPU as well and therefore for you to profit with this kinds of pricing, you have to overload your servers which then means you no longer are providing quality (if RS is quality to begin with).

    So what is quality? Quality in my opinion is..

    - Network (speed, uptime, providers/redundancy)
    - Server (uptime, load, security, software, content)
    - Support (speed, knowledge, helpfulness, attitude, multiple options)
    - Communication and honesty

    Everyone makes mistakes and bad things (i.e. downtimes, harddrive failure, etc) do happen. It's how you handle the situation that is important.
    (SH)Saeed

  20. #20
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    In terms of financial feasibility (including feasibility to provide well staffed excellent support) - the only difference between a host that sells a plan at $10/month vs $2/month is the break-even point on fixed costs - i.e volume of customers

    Who ever said a business has to make money from day 1 ?

    Grocery stores sell commodity goods at 1% margins and incredibly high fixed costs - there is no question that a business model of low cost high quality is feasible. In fact - every commodity in the world moves to this scenario in the end.
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  21. #21
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    To Saeed,

    30GB for $15 a month is not cheap its unrealistic....
    I guess we just see the definition differently.

    When i said "cheap" i was referring to the amount of markup above there product costs(no overselling, true quantity with markup of less than standard markup).

    Your definition of cheap is unrealistic, its overselling, its a lie...
    When i said cheap i was saying that its possible to sell ACTUAL amounts of bandwidth for CHEAP(not an extremem amount of markup) and still provide quality, so long as the business planning and structure was sound...

    By purchasing ACTUAL amounts in bulk this would create an extreme discount. By then reselling that actual amount at a slight markup and utilizing outsourcing and vendors for tasks that dont neccessarily have to be in house a company could very easily provide quality at a cheap price.

    But when i said cheap i meant below the standard market cost...
    And i was assuming the company was not overselling and that the purchaser was not looking for unrealist, oversold, bandwidth...

    If your definition of cheap is 30GB for $15 dollars, than yes i agree with you, it cant be done with quality.

    But by my definition of cheap being 30GB of multi-homed quality bandwidth with uptime guarantee, free IP's, control panel, etc. for $29.95........... Thats cheap in my opinion.

    Fastservers.net dedicateds are very cheap if you consider there support and connections... these things are priceless...
    I was balancing the costs of actual service, time, support, true bandwidth amounts, etc. when i said cheap...

    But cheap by what your saying CANT be provided period, let alone with support... They are only saying there providing it..

    I actually seen an ad from a company for a 15Mbps connection and 10U's of space for only $800 something... then it said "on your own 10Mbit line".............. LOL
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  22. #22
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    Well, take a RackShack server for example.. You can get 400GB of monthly bandwidth for ~$100/mo. That is $0.25/GB if we don't count the server cost. Or you can get one of those unmetered 10Mbit servers. You can make a profit on these kinds of servers, but not by providing quality. If you sell cheap accounts like I mentioned before (30GB for $15), if the the user uses their whole monthly bandwidth, you're still making 50% profit on that user. But how many of these accounts do you have to put on each server? A site using 30GB of bandwidth must take a lot of CPU power, so in other words you'll have to overload that server to make a reasonable profit. I don't know must about FastServers.net so I'm not going to say anything about them except that their deals seems to be similair to RackShack's. I'm not saying everyone on a RS server is offering bad quality service, there are those that offer space on a RS server for far more expensive than $15 for 30GB and in my opinion, those are the ones that will make it in this business. They are the ones who can afford to hire more techs when needed, not the ones that set very low prices to make just a few quick bucks.

    One thing I can share with you from my own experience is that when we sold our SH-100 package ($54.95/year) it felt like more than selling our SH-200 package for $9.95/month. But after a month, you're not making any profit from the SH-100 customer anymore and you have to support them for 11 more months! This is where I think a lot of people make mistake and they sell a few packages, make a few quick dollars, then 3 months later when that money is gone, they're left with lots of bills and clients they have to support for months ahead. Which is why so many hosts disapear after a few months.
    (SH)Saeed

  23. #23
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    One more thing, the definition of cheap depends on many things. I was more speaking about those here on WHT that offer and request so much bandwidth for so little money and they always want quality. You might be paying someone $100 for 10GB of bandwidth but on the side get outstanding support and in your opinion that might be cheap so we can't really say this is cheap and this is not. It all depends on so many factors.
    (SH)Saeed

  24. #24
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    in the webhostingtalk.com the definition of cheap is much lower that on the standard world. People make unrealistic requests and for some reason there is always someone to answer them.

  25. #25
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    Because there is someone always willing to lie for a buck!

    But n-e-way,, i thought of something... maybe a dumb idea...

    But a script using forms that you could input information such as CPU speed, RAM, Hard Drive Space, etc. etc. and get a break even factor with a submit.............

    How that sounds complicated, but i would like it, could that be done? I know its off subject, but i would like to see a script like that, that can tell you your break even point..........

    OR another option to put in your desired profit per server and it generate a factor...

    Any programmers out there want to give this a go?!?!?
    I want it if so..
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  26. #26
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    Originally posted by (SH)Saeed
    Well, take a RackShack server for example..
    It's the in thing I guess.

    You can make a profit on these kinds of servers, but not by providing quality.
    Absolute bollocks. I invite you to either our general or our reseller forum, to post an unedited and unmoderated question to our users, asking if any single one of them believes they are not receiving a quality and cost effective product with the very best support they have ever experienced. Now, I doubt many of our clients are unaware of where their site is hosted but I will ask those based on Rackshack servers only to answer. I would then invite you to report your Rackshack specific findings back here, since Rackshack is the yardstick you want to use, and we'll see what you come back with.

    I'm not having a shot at you personally Saeed, and this isn't all about *us*. But common comments like that one of yours above are poor in my opinion. Not only do they serve to deflate consumer confidence in our industry (that's all of us), but our Rackshack servers outperform *any* of the others we have and we back them up with a good level of support, making an overall quality product that comes under no blanket statements such as your above.

    I look forward to your fact finding visit.

    Regards

    Gary

  27. #27
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    Good point, but i think this is a discussion that cant be won simply because like he said and me and him got definitions crossed over..........

    Cheap and quality mean completely different things to some people...
    Im one that things cheap is $25 a month for 5GB of bandwidth if i get complete redundancy and 24/7 support(really support not just a live support box thats always not online), etc.

    Others would say that pricing is crazy, they would be happy with 100GB at $25 a month and suffer 20% downtime...

    And some are more middle of the road,
    But none of it can really be proven in a general statement i think..

    I think quality + cheap in my definition is very possible, but i guess i cant prove what im trying to say, so i'll shut up
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  28. #28
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    Editor,

    I'm sorry if anything I've said has offended you, that has not been my intention. My point by this discussion is that if you're offering 30GB of bandwidth for let's say $15, you need to put many such clients on a server to make a decent profit from it and how many sites that use 30GB of bandwidth can you put on a single server without the load going too high? So you'll have to either cut your profit or the quality of your service which includes server load to make it profitale enough. For a RackShack server, your prices are among the best I've seen around here, so I'm sure you're doing good. I never said there weren't any exceptions I'm trying to talk generally and I'm sure even you have noticed how many fly by night RackShack hosts there have been and still are. Again, this is not towards anyone specific or a host that has a few servers at RackShack and most elsewhere.
    (SH)Saeed

  29. #29
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    Originally posted by (SH)Saeed
    I'm sorry if anything I've said has offended you, that has not been my intention.
    I wasn't offended mate. You would have to tell me we were providing a poor service to offend me directly. You made a specific statement, and from what I'm seeing it's just become commonplace to use Rackshack as a low end measure, when in reality there are cheaper offers around. On networks that are slower to respond from our part of the world at least.

    When was the last time you saw an active discussion on *network* downtime from Rackshack? We've had more troubles with our other two main providers. That's still not a bad thing...and not something I would necessarily report here anyway.

    I wonder just what does the newcomer to a board like this think of our industry? You've got to admit, there's not much love around these parts right now.

    Regards

    Gary

  30. #30
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    But a script using forms that you could input information such as CPU speed, RAM, Hard Drive Space, etc. etc. and get a break even factor with a submit.............
    Excel is your best bet to do this.
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  31. #31
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    Originally posted by Editor
    You've got to admit, there's not much love around these parts right now.
    I miss all the love.....
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    lol
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    Re: QUALITY & CHEAP - Does it exist?

    Originally posted by (SH)Saeed
    Hi,

    What do you guys think? Is it possible to offer quality and cheap hosting and still make profit?


    Cheers.

    LO,

    Here's a rule of life.
    Write it in foot high letters and stick it on the wall.


    GOOD , FAST , CHEAP.
    PICK ANY TWO.


    (ie you can have good and fast, but it won't be cheap. etc)

    Regards,
    Eric G.
    "You can fool some of the people all the time. You can fool all the people some of the time. But you can't fool all the people all the time." --Abraham Lincoln.

  34. #34
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    my home PC is good fast and cheap, so's my coffee maker, my grass-cutter, my calculator and so on....
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    Hi Andrew,

    If hosting was a self contained, mass produced product like the items you mentioned, I'd tend to agree with you.

    However, as long as hosting requires constant monitoring, updates, and TLC from highly skilled professionals in order to make it work properly, then I think the above general rule applies.

    Of course good, cheap, and fast are relative terms, which will have different meanings for everyone. However, as a general principle I've found it to be a pretty good one.

    Regards,
    Eric G.
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  36. #36
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    I agree - I was just questioning the rule of life part

    But anyway - the main consensus in this thread I disagree with. I know that good hosts with solid businesses get understandably upset by an influx of cheap plans - but it's not going to change - it's going to get cheaper & cheaper as the market becomes more efficient. It's a case of adapt or die. Within a few years many will go out of business, but it won't be just the ones that have low prices, the prices will come down regardless, it will be the ones with not enough customers that die.
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    True Andrew, prices will come down as the costs of the infrastructure falls.

    However, theres one important trap that people trying to provide the cheapest hosting fall into. The same trap that catches most small businesses.

    They work their butts off trying to get things off the ground, and don't include the cost of their own time in their costings.

    When they start getting successful, they get into trouble because they have to PAY someone to do the things that they themselves used to to for free.

    At this point, they can increase their prices significantly drastically cut services, or more often pull the plug after wondering what went wrong.

    And the gap in the market is taken up by another hopeful who has yet to learn this lesson.

    Meanwhile, those who have not built their business on the basis of providing cheapest prices just smile at increases in business, hire someone else, and keep growing.

    Regards,
    Eric.
    Last edited by Blind Freddy; 09-09-2002 at 01:42 AM.
    "You can fool some of the people all the time. You can fool all the people some of the time. But you can't fool all the people all the time." --Abraham Lincoln.

  38. #38
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    Sorry Andrew, but I disagree with you.

    Unless the techs wage go down as well, this wont go to be cheaper and cheaper.

    As Eric said, at the long term they will need to hire to someone to help them in support, billing, etc, and with those ridiculous low prices, they wont be able to face it, even if they could, they wont get a penny at the end of the month, and I think that the purpose of any bussines its get money, am I right?
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  39. #39
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    We agree that the purpose of any business is to create money

    And also I agree that there must be many hosts in the market today that at the end of the day cannot be making much money and don't provide great support. They will disapear when they figure that out - it won't be interesting to them anymore.

    But, the market is basically segmented into 2 types of customers

    - Price sensitive, low end - non commerce (the overwhelming majority of the web)
    - High Support / Reliability sensitive, their site is a revenue stream or has major significance to them.

    Due to the nature of competition & markets - at the low end the winners will be the ones that have the most efficient utilization of fixed costs and have sufficient customers to cover fixed costs plus a low margin of profit over a large volume. No matter how you want to look at it - this is how commodity markets work in the end. The market will naturally pull prices down you can't fight it, especially as customers become more educated.

    Higher levels of personal service as percieved by the customer will command a premium to a certain segment of the market, but will also will create added fixed costs to provide and will still require volume to be a success.

    Unless the web hosting market falls into some new model of business economics & markets then it won't be any different to any other commodity - low margins, high volume, high efficiency.

    The market will really mature when customers don't have to deal with anything technical at all - when it just becomes nothing different than turning on cable TV. Technology advances at a fast pace.
    Andrew McMaster
    http://www.FindMyHosting.com
    Compare Prices, Consumer Reviews, Help, Guides and More.

  40. #40
    Join Date
    Nov 2001
    Location
    The South
    Posts
    5,403
    It's possible but there's a limit to everything. You have some good cheap hosts, you have some bad expensive hosts, and everything in between. A "cheap" host with a good setup and business plan can exist and even thrive but like most other businesses you're gonna have more failures than successes, I think that's quite evident here on WHT (whew some spectacular drama if you got time to read haha). Only time will tell. Though the fact that there doesn't seem to be many "old" cheap hosts might be something worth thinking about.
    Gary Harris - the artist formerly known as Dixiesys
    resident grumpy redneck

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