Amazing Hosting Packages

[integraideas]

Matt,
a few customers are moving to another host supplier, due to price and space, here is a sample from one site, but you can check any hosting web page:

Deluxe Plan:
• 50 GB Space • 500 GB Transfer
• 1000 Email Accounts • FREE! Software
• 25 MySQL Databases • Unlimited Email Forwards
• Forums, Blogging, Photo Galleries • No ads
• FREE! $25 Google AdWords™ Credit
$3.99 per month.

Wow! I cannot compite with this.

From your point of view, How can I compite with these guys, even you (according to your packages)

Need your support and expertise to move and be a competetive business.

[Matt]

This is a prime example of what web hosts call "overselling."

This is the oldest trick in the business. If you have never used a host that makes these promises, I can see why it would be very tempting. However if you have used a host like this before, you would not be asking about how they can offer such "great" deals.

It's common practice among typically newer and less reliable hosts. Considering 50 GB is equivalent to a dedicated server that has a 80 GB primary hard disk, there is no way that you actually get 50 Gigs for $3.99/mo

I actually encourage you to sign up for them for some of your unimportant domains, and see what it means to get hosting for that price. Your server is going to be down for the majority of the time. There is going to be terrible support, if any. If you even come close to approaching the limits they give you, I can guarantee one of two things happening.

1. They tell you you need to upgrade to a "professional" hosting plan (or similar) which are going to be highly inflated prices, with the same level of ridiculous support / uptime / mismanagement.

2. They shut your sites off and blame it on a violation of their Terms of Service.

3. They charge for basic support options and features. Notice 25 MySQL databases. Please! Some sites use that on one account. How much are additional dbs? Probably $5.00 or something silly.

They are banking off the fact that most sites usually use very little resources on a server, and that 9 out of 10 sites will hardly load a server up at all.

However, if you have true ecommerce sites, anything mission critical, or anything on a site that does anything other than receive a few emails per week and doesn't matter if it is up or down for days at a time, then these are the hosts for you.

For the rest of us that require reliability, in *most* cases you will see that you get what you pay for in web hosting.

For $3.99 go ahead and try them out. Then upload all 50 gigs of MP3 or images or Mpegs or whatever you have that are large files and see how quickly they kick you off of their servers. And thats BEFORE you even started trying to serve web pages. You'll see the servers are extremely slow due to load, or connection speeds that are substandard. (or both)

Then try to download the same file from them and us, and see which download is faster.

Just make sure if you are considering a host like this that you read their terms of service and acceptable use policies, as well as their Service level Agreement. if they don't have any of these, run fast. Once you do read them, make sure you read the parts about resource limits, cpu utilization, and what it takes to mandate an "Upgrade" or getting kicked off their servers.

I think it would be highly unwise to use such a host after you have been building your business for such a long time. It would be a highly unnecessary risk.

I really would not call those types of Hosts "competition."

I consider them bottom feeders and it is perfectly fine by me that they exist because what ends up happening is the newer customers to hosting of course go to those hosts and pick up some knowledge along the way. And by the time they realize that it costs a little extra for reliability, they have already learned a little about building a web site, and hosting in general.

It is always nicer to have more experienced customers because they are less resource intensive, among other reasons. They are generally also more prone to stick with a reliable host after they have found one instead of flopping around from bargain basement to bargain basement which becomes excessively tiresome.

It is a win-win situation for the customer and the host if you charge more, but truly do offer a better service.
The customer gets better service and the host has a higher profit margin for more experience customers. Your servers do not get overloaded, and they are more reliable, which again, = Happy Customers + Happy Host.

Most people are willing to pay a bit more for reliability.

And keep in mind the other part that is once you lower your prices, there is no turning back. I watch these bargain hosts fold in most cases after a few months and a few ever make it an entire year. At some point though, they all fail or will fail at that level of pricing. Its absurd really, not to mention dishonest to offer something so ludacris as 50 gigs for $3.99/mo.

The only hosts that can truly make money on that business model are the huge ones that have thousands of servers in my opinion, and i think even some of the larger ones are starting to realize that their "bargain basement" models are not working and the small and medium size hosts that charge more and have better support, end up taking a lot of their customers.

Considering you want to have a dedicated server someday for your own customers, and considering that an entry level managed dedicated server at a reliable provider is going to cost no less than $200-$250/mo that means you have to have 100 customers on that unit paying $2.50/mo just to break even.

Now consider having your prices set at closer to $7 per month. You'd only need about 35 customers to pay for the server, which means less support, less chance of breakage on the server due to abuse, and now the remaining customers numbered 36-100 are now actually turning a profit for you, instead of causing a drain for you.

As for how to compete with the long time reliable hosts out there, the only way to do that is get a dedicated server, long hours, price yourself reasonably, and offer a great service, and you will find that you don't have to advertise much, if any, because your reputation as a host will bring the customers to you.

Hope that helps.

PS when your customers do tell you that they are moving to another supplier like that, you can almost certainly assume they will be leaving that supplier soon. And because of that, it would be a very good idea to remind them, that before they go, you are still around to host their sites and would be very happy to have them back if their new host, doesn't work out (which it wont). You might offer a coupon code or something to get them back as well, because they WILL be looking for a new host shortly after they switch and it is always nice to see your customers come back. It happens here all the time.

[integraideas]

Thanks Matt for your answer.

I don't want to try those hosts, but some hosts are in the ww*.hostreview.co* where you get the best hosting for Nov 2005. I want to think they are, as well you are excelent web hostings.

I ask you this, 'cause I want to understand how the market of web hosting is moving in the US. Here in Guadalajara there are a few (you can count them with your hands) truly web hostings, I'm one of them, and a lot of fake business specially marketing business, they charge to their customers the hosting very expensive and with no customer service.

Well, thanks a lot for your support.

[Matt]

Remember a lot of those "review" sites are owned by web hosts themselves and about 99% of them don't mean a thing. A lot of their "TOP 10" or whatever hosts are not based on service, but how much that host paid to advertise to have that spot on the supposed review site.

If you are one of the few legitimate hosts down there then you should be fine and people will start referring more and more customers your way once your name gets out. My advice is to focus on business sites down there that will be around for a while. Business owners talk about their web hosts often.

Birds of a feather flock together they say....

[infoserv]

Matt,

On your dedicated server options, do you offer custom designed systems? I may soon have a requirement for a hot swappable raid system for less downtime and performance boost. I want a zero, or 1 short downtime in the life of the machine. Do you offer anything similar to this?

[Matt]

Infoserv,

Yep we definitely offer custom hardware configurations including various RAID levels. (0, 1, 0+1 10, etc) and hot-swapable hard drives are certainly available, we run them on some of our own machines now.

Zero downtime is virtually impossible especially with only a singular machine. Even google itself has gone down in the past. You can cut downtime by using multiple machines to help deal with hardware issues.

We offer managed hardware load balancer services for people that need multiple servers to power their applications.