February 3, 2010

Hosting Price vs. Quality

There is an alarming trend in the hosting industry, one that has been building for quite some time but is now starting to accelerate and permeate all areas of the trade. Almost every industry rag you pick up today will cheer on the ‘commoditization’ of hosting, talking about how the cost of hosting is dropping steadily, almost to the point of being free. Unfortunately, no one is asking at what expense this trend is happening, and as competitors lower their prices, other hosting companies feel obligated to find areas where they too can shave some costs.
I remember a conference I attended in Washington, DC. two years ago, and I happened to have a chat with two representatives from a major US hosting provider. These ambassadors for their company were all too eager to brag to me about the many thousands of clients they were able to stuff on one machine, keeping their costs as low as possible. This virtual approach to cheek-by-jowl living hurts both the clients and the hosting companies in the long run, as thousands of clients are forced to share the meager resources of the cheapest servers the hosting provider could slide into a rack.
Another way companies try to save money is with cheap ‘white-label’ servers, which are not built with quality name-brand parts, carry no warranty, and break down far more frequently than their more expensive, name-brand counterparts. Google is famous for using such machines, but their setup is significantly different, as every machine is redundant to every other machine, and thus the failure of one server does not affect anyone.
Business clients looking for a place to host their website need to remember that price should be far down the list of things they look for. Compare hosting to the hiring of an employee. When searching for that new employee, you will first weed through a stack of submitted resumes, looking for a short list of suitable, qualified, professional looking candidates. This is much like the process of reading hosting providers’ websites for information on their services. Next, you will interview this short list, probing the candidate to see if he or she will be the best possible fit for your business. As you select an employee based first on her qualifications, so should you select a hosting provider based on their qualifications.
If a hosting provider is one of the cheapest providers in the industry, remember to ask what corners had to be cut to achieve that price level. It is somewhat disingenuous for a hosting provider to tell you that volume is what led to their price reductions, as volume generally means the company was able to stuff more clients per server than anyone else out there. In a future article I will tell you a few qualifications that you should look out for when choosing a new hosting provider for your business.

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