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  1. #1
    Join Date
    Mar 2002
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    704

    Question Prices INSANELY Low?

    I don't understand how some people here are offering INSANELY low prices like 1gb of space and 10gb bandwith for $4.99?! How can you possibly be making any profit?

    I'm just curious how you guys manage to do this while not compromising quality of service.

  2. #2
    Totally automated system and next to zero support for starters. Although it can be done on quality hardware and software, people-service on a day-to-day basis is probably weak.

    Also, keep in mind many hosts don't, nor really care to turn much of a profit as their model consists purely of build up a base and sell it off. At the sell off is when they make their money.

    Lastly, no matter how much you offer them, provided they are not warez traders and porn sites, most sites are only going to use a few megs of space and a few hundred mb of transfer.

    I mean, provided you are just using your hosting for a typical shared hosting type of site and not streaming media or downloading mp3's, 10GB is a lot of traffic to come up with!

  3. #3
    Join Date
    Sep 2002
    Location
    Oklahoma
    Posts
    825

    * I call them nickel-and-dimers..

    Plus people oversell themselves left and right.
    Devon Dunham (Owner, Sharpnet/DDoS Host)
    Advanced DDoS Mitigation and Server Management Solutions

    Protecting your online infrastructure.

    Est. 1998.

  4. #4
    I agree with everything in Ipguitars post except that on "can be done using quality hardware" - the cost of this quality hardware per month is simply too high - will people really go for a buy-out if the company they are buying is losing $10000/month because the hardware cost too much?

    The number of users per/standard server that I agree with is about 150. This is 150 small sites that use almost no resources, and keeps total load average below 0.1 (on a UNIX system.)

    When selling in the $4-8/month range you have to question how many people are really on that server. Find out what kind of hardware and network connections the host has, and try to determine their costs for just that alone (nevermind support and other overheads.) Take that amount and you will probably find that there are at least 500-1500 users/server.

    A server running with that much load, no matter what quality hardware, will be under a lot of stress. Even if it CAN handle it, it won't be able to handle it well and you will experience outages and poor response times.
    Travis Doherty
    Web Hosting Services
    http://www.referable.com/

  5. #5
    Greetings:

    "At the sell off is when they make their money."

    As a company that does acquire other companies and customers, I can share that we don't buy anything that is not of value <smile>.

    If we are competing on the basis of value and not price. Then those that compete on price will most likely not even fit on our radar screen for being purchased.

    Most business people are in business to make a fair profit. It is when profits are ignored that businesses crumble and are worthless... or only of value to the people running it.

  6. #6
    Join Date
    Dec 2001
    Location
    New Jersey
    Posts
    1,152
    Originally posted by refcom
    I agree with everything in Ipguitars post except that on "can be done using quality hardware" - the cost of this quality hardware per month is simply too high - will people really go for a buy-out if the company they are buying is losing $10000/month because the hardware cost too much?

    The number of users per/standard server that I agree with is about 150. This is 150 small sites that use almost no resources, and keeps total load average below 0.1 (on a UNIX system.)

    When selling in the $4-8/month range you have to question how many people are really on that server. Find out what kind of hardware and network connections the host has, and try to determine their costs for just that alone (nevermind support and other overheads.) Take that amount and you will probably find that there are at least 500-1500 users/server.

    A server running with that much load, no matter what quality hardware, will be under a lot of stress. Even if it CAN handle it, it won't be able to handle it well and you will experience outages and poor response times.
    Hi just want to interupt in your conversation.

    something that most people don't realize is that it's not the number of domains that are hosted but the amount of activity that is is hosted.

    At Adehost we tune the winservers to about 42% to 45% cpu utilization and drive utilization below 25%. This let's up place anywhere from 20 accounts ( that's one server that is real busy ) to 225 domains ( that one still does not even register more that a 12% average load ).

    Now would I take the risk of loading 300+ domains to one server, no because failure would cost a fortune to replace 300 account.

    Mike
    I am Mike From ADEHOST.Com, Multidomain Windows hosting with Cold Fusion and ASP and Dot.NET Also offering multi-domain Unix hosting. silently, each one should ask, Have I done my daily task. Have I kept my honor bright, can I sleep without guilt tonight. Have I done and have I did, everything, to be prepared. - our motto to maintain services.

  7. #7
    Join Date
    May 2002
    Location
    Michigan
    Posts
    1,799
    hmmm, A well recomended host I know of once had over 800 accounts on one of their servers. Prolly explains the 2 HD failures, 3 server changes, and one toasted router in 12 months.
    When somebody posted this bit of info on their forums, they didn't deny it. They responded said that the resellers had sold so many accounts, it was getting crowded and that one reseller was going ded, and they were going to move a couple of other resellers (totaling close to 140 accounts) off that server.
    Gee, that still left about 660!
    and they weren't cheap either.
    DANG DANG! DANG!!
    I know ***** ripped off everybody else, but they wouldn't do it to me.
    "When you use bottom feed for bait, you are only going to catch bottom feeders."
    "You do what you are, and you are what you do."

  8. #8
    Originally posted by ATST
    hmmm, A well recomended host I know of once had over 800 accounts on one of their servers. Prolly explains the 2 HD failures, 3 server changes, and one toasted router in 12 months.
    When somebody posted this bit of info on their forums, they didn't deny it. They responded said that the resellers had sold so many accounts, it was getting crowded and that one reseller was going ded, and they were going to move a couple of other resellers (totaling close to 140 accounts) off that server.
    Gee, that still left about 660!
    and they weren't cheap either.
    Lol, talk about hardware failure .

  9. #9
    Join Date
    Aug 2002
    Posts
    1,612
    hmmm, A well recomended host I know of once had over 800 accounts on one of their servers. Prolly explains the 2 HD failures, 3 server changes, and one toasted router in 12 months....
    Oh man! and i thought powweb was the master at this...

  10. #10
    When I say quality hardware and software, I am speaking relative to the type of site they are hosting - not redundant drives, load balancing, etc.

    Classic case - you can get a P4 Compaq with 512mb ram running the Ensim system with 400GB transfer from rackshack for like $130! It's not that hard to turn a profit in that deal, provided you target your niche properly.

    Now again - I am talking Budget hosting in that scenario and nothing else. A honda civic is no BMW, but can still be a darn good little car.

  11. #11
    Join Date
    May 2002
    Location
    Michigan
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    Well, they recently added multi domain hosting, so I would definately NOT go there.
    A good way to avoid this type of thing would be to search on ANY potenial hosts forums for the words: "accounts per server"
    While you're at it, look for "hard drive failure", "server crash", or even "data center move"
    Of course they could do like a couple of other hosts I know, and delete the threads.
    DANG DANG! DANG!!
    I know ***** ripped off everybody else, but they wouldn't do it to me.
    "When you use bottom feed for bait, you are only going to catch bottom feeders."
    "You do what you are, and you are what you do."

  12. #12
    Join Date
    Dec 2001
    Location
    New Jersey
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    1,152
    Originally posted by ATST
    Well, they recently added multi domain hosting, so I would definately NOT go there.
    A good way to avoid this type of thing would be to search on ANY potenial hosts forums for the words: "accounts per server"
    While you're at it, look for "hard drive failure", "server crash", or even "data center move"
    Of course they could do like a couple of other hosts I know, and delete the threads.
    I think I found them, but the crash they were referencing took them a long time to restore ( 12+ hours ) damm.

    mike
    I am Mike From ADEHOST.Com, Multidomain Windows hosting with Cold Fusion and ASP and Dot.NET Also offering multi-domain Unix hosting. silently, each one should ask, Have I done my daily task. Have I kept my honor bright, can I sleep without guilt tonight. Have I done and have I did, everything, to be prepared. - our motto to maintain services.

  13. #13
    Join Date
    Aug 2001
    Location
    Connecticut
    Posts
    242
    Keep adult sites off your servers, use crappy bandwidth *(IE Cogent), buy Celery (celeron) servers, and you can offer plans at $4.99 for 10gb/xfer

    I disagree with most on the lack of support however, I offer a plan for $10 and 7gb of xfer which is pretty close to the above, and I provide top notch service to all of my clients. Maybe some dont, but it goes both ways, i've been with really exxpensive hosts that dont provide support.

  14. #14
    I am sure you personally are great to your customers XTNet, but it's when you grow to the point that you can no longer personally be involved in all issues, which is really only at a couple - few hundred customers, IMO.

    That's when the real costs of quality support start kicking in.

  15. #15
    a lot of low cost, high space & high bandwidth hosts will not allow files more than 1Mb in size, no music or video, or archive files, meaning it will be virtually impossible to use more than a few MB.
    and with that much content on your site you'd be looking at the fat end of a million hits per month to use up 1GB bandwidth.

    most people dont need that much in the way of resources anyway.

  16. #16
    Join Date
    Dec 2001
    Location
    New Jersey
    Posts
    1,152
    Originally posted by lpguitars
    I am sure you personally are great to your customers XTNet, but it's when you grow to the point that you can no longer personally be involved in all issues, which is really only at a couple - few hundred customers, IMO.

    That's when the real costs of quality support start kicking in.
    for us the magic number was 650. then we got offshore help in solving Customer service help. I still get involved daily because it is a requirement to learn from your most vocal clients.

    Mike
    I am Mike From ADEHOST.Com, Multidomain Windows hosting with Cold Fusion and ASP and Dot.NET Also offering multi-domain Unix hosting. silently, each one should ask, Have I done my daily task. Have I kept my honor bright, can I sleep without guilt tonight. Have I done and have I did, everything, to be prepared. - our motto to maintain services.

  17. #17
    Join Date
    Mar 2002
    Posts
    704
    Thanks everyone, I think I know what to do next

  18. #18
    Join Date
    Aug 2001
    Posts
    735
    Originally posted by Desova
    . . .and with that much content on your site you'd be looking at the fat end of a million hits per month to use up 1GB bandwidth.

    most people dont need that much in the way of resources anyway.
    I think you slipped several digits on the number of hits but your basic point is correct. Many people think they need 5 gigs but actually need a tiny fraction of that for their ten visitors per day. That's how many hosts can oversell bandwidth and get away with it, so little is used by so many.

  19. #19
    Join Date
    Nov 2001
    Location
    London
    Posts
    4,856
    You get what you pay for. Chances are hosts offering everything for under $10 per month have a poorly thought out, or non existant business plan, and have no long term planning. Such a host will probably go out of business within a month or two.
    Matthew Russell | Namecheap
    Twitter: @mattdrussell

    www.namecheap.com - hosting from a registrar DONE RIGHT!

  20. #20
    Join Date
    Dec 2001
    Location
    New Jersey
    Posts
    1,152
    Originally posted by voxtreme-matt
    You get what you pay for. Chances are hosts offering everything for under $10 per month have a poorly thought out, or non existant business plan, and have no long term planning. Such a host will probably go out of business within a month or two.
    You are right, lower price host have a higher chance on being in default. good example was the classic CYBER .... and the resent guy that flew the coop on monday. all guys offering deal and what not's

    damm shame to see so many people get burned.

    Mike
    I am Mike From ADEHOST.Com, Multidomain Windows hosting with Cold Fusion and ASP and Dot.NET Also offering multi-domain Unix hosting. silently, each one should ask, Have I done my daily task. Have I kept my honor bright, can I sleep without guilt tonight. Have I done and have I did, everything, to be prepared. - our motto to maintain services.

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