Some companies really try too hard. Often, they are doomed from the start. Even if they are “successful”, it’s usually attributed to nothing more than luck. Few operate or value experience and skills and appreciate their clients. Often, owners and managers that (poorly) run these companies will proclaim themselves “entrepreneurs” and “clever businessmen”, believing they are the reason for the company’s success, when it’s usually their staff that they ironically lack appreciation and respect for that really explains any small or large amount of success they might have. Yes, being a child of wealthy parents that are willing to shell out tons of cash to over expose their child’s web hosting business, doesn’t actually make you the reason for the company being a success.

Moreover, they outspend themselves for the sake of trying to impress “bigness” and “importance” upon potential clients, and even more sadly and ironic, other companies in the web hosting industry. They will stop at nothing to stay “on the top” of lists, paying affiliates 10 to 50 times what a client would pay them for hosting even if that client stayed on them for many years, just to get the client in the first place. Further to this, then toss in a free domain for life. Even more crazy, they will promise unrealistic and impossible hosting plan limits, in the hundreds of gigs to many terabytes of both disk space and bandwidth, or even claim there is “no limit” (unlimited). They offer these unrealistic limits for only a few dollars per month, even though their entire server they host a 100 or more clients on, costs them $1,000 per month, and only holds 1/10th of the space they promise for just one single client’s account.

Let’s face it, stuff costs money. There’s no way around it. You don’t pay a thousand dollars per month for a dedicated server that has 1 (one) Terabyte of disk space and 5 terabytes of bandwidth and then sell 2 terabytes of space and 15 terabytes of bandwidth for $5/mo. You don’t have to have a degree in mathematics or physics to understand that they would lose hundreds of dollars per month to host that one $5/mo. account, if they actually intended to live up to their promise and provide the disk space and bandwidth the client paid for.

They rely on extreme overselling to “average” out the usage, claiming that if 100 clients on the server only use 100 megs of disk space and 1 Gig of bandwidth, that they can offer the other “high usage” clients their promised limits. This isn’t true, at all. This still means that they don’t have enough physical disk space to meet that single client’s needs if that client did use anywhere near their promised limit. I personally know of a very popular, very large and known web hosting provider that promises huge limits and unlimited, yet I know for a fact that they can’t deliver what they promise, so they find reasons to kick users for not using too much CPU or memory resources, but because they are presenting a risk of financial loss (because they can’t give away that much resources).

That company claims to have large disk arrays so each server can offer that much. Well, they actually don’t. Their disks (in total) on the servers range from 250 gigs to 750 gigs, with only one or two available, or in a raid array to total about 1.5 terabytes. Yet, even then, without any other users and without any OS install, logs, etc., not disk usage at all, it’s still not physically possible. They then changed their story to say all sorts of things about using different technologies to cluster servers and their disk space to “overall” average out the total across the server farm. They have no such method implemented and regardless of how you view it, those disks and that bandwidth still cost money (a lot of money), and once again, once a single client poses a risk to the usage of the server’s disk space or bandwidth, they are now a financial burden, because their extreme overselling tactics backfired on them.

They have an easy out though, and often use it, claiming the site was getting too many accesses, using too much CPU time or too much memory. Sometimes this is true and a legitimate cause, and this is a case that any web host, extreme overseller or not, will have to take corrective action to protect the server, its services and the other clients (assuming it’s a shared or reseller server). However, in these cases, it’s often not true and is claimed because it’s an easy excuse to kick the client without having to face public ridicule if the client could prove they were kicked off the host because they tried to use their promised resources that they paid for! The theory by extreme oversellers is flawed and is essentially saying that “if a site used that much disk space and/or that much bandwidth, they will use up too much CPU and/or memory on the system before they ever became a financial threat and we’d kick/suspend them anyway”. This isn’t always the case, but you can bet that it’s the case claimed when they suspend/kick them.

In all fairness, some hosts might have some type of affiliation or sponsorship with the high usage client, because a well trafficked site that provides ads for your hosting service, can benefit both parties. Such as a “hosting site index”, which sadly will usually overexpose their vested interest “sponsor” by putting their ads more prominently and even make it appear on a “top 10 list” as if their sponsor has the better ranking or quality, which is even more unfair to the other hosts that (sadly, too) have to pay to be on that top 10 hosting site list, because their services are less appealing to the naive web user looking at those lists for the best, top 10 web hosting providers. Of course, those are all essentially portals where someone has affiliate links and gets paid per client, and puts up a list of the 10 highest paying referral programs and makes it appear as though all hosts on the list are high quality, well ranked (by votes of happy clients), when in fact, they are nothing more than a trick to get themselves money and the affiliate couldn’t care less if the host was any good, or even a legal operation for that matter.

This issue is broad and varied, and it’s difficult for a client to find honest, real hosts, and hosts that have experience, skills and really know what they are doing (from running the company, to offering support and keeping a secure and stable hosting environment). The competitiveness goes to what I was speaking of originally, above, where these companies literally outspend themselves, creating excessive and unnecessary overhead, where just to stay on top and saturate the market, they’ll pay more for advertising than they have coming in. Everything from getting the top spots on certain web hosting forums and web hosting centric sites, to paying $10, $20, $40+ per click on their ad link (where only 5-10% of the users will actually order service anyway, and the one’s that do, will only be paying a couple of dollars per month). These people are happy to hemorrhage money just to look bigger, and therefore, in their minds, appear better.

With this sort of mentality, no one wins. Not them, not their clients, not their staff, no one. Their staff have no job security, and the methods used to run and manage the company by unqualified owners and managers only drive the qualified staff to leave and seek employment at a company that has a better head on their corporate shoulders. They have no future, unless they revert back to normal plans where they stop trying to only undersell the competition by lowering prices and offering more, when it’s not a truthful limit they claim to offer (they can be very generous and still be realistic and make the same amount of money). The fact is, companies that operate like this, regardless of how much they believe they are marketing geniuses, are only staying afloat, because they are managing to keep enough new clients coming in due to overexposure, for now. When that stops, new marketing money goes away, people get laid off, more clients start getting kicked and the company eventually folds.

No matter how you cut it, no matter what irrelevant and poor examples companies give about cell phones, airlines and the generic word “overselling”, this is a completely other animal altogether. Common sense and very little or even no education about the hosting industry dictates that certain things aren’t possible. With a cell phone, you and thousands of others can leave them on a call 24/7, all day long, all month long and be within the contracts’ terms. Airlines, while they might bump passengers from a flight, will still get you on a flight and still give you the service promised, even if you have to wait several hours. Neither of those examples try and overload circuits from a single client’s use, or overload the weight limit on a plane and claim it’s safe. It’s economically foolish and reckless, and it’s a terrible business model with no future.

Companies will continue to skirt around the laws of physics, because it’s hard to prove that they won’t offer what they claim, when they claim a client abused the system’s resources and kick them when they start to cost more than the client pays them for hosting. If they want to play that game and disrespect their existing and potential clients, and just try and impress people with the biggest numbers for the lowest price, fine. However, let’s not pretend it’s possible. The fact is, they undersell because they have no real service to sell people on. If you offer quality and honest service, people will flock to you, you’ll earn their business and they will be happy. Companies like that only have happy clients, because those clients haven’t had a need for truly exceptional service and probably have never experienced it and have nothing to base their opinions on in comparison. If the client is happy enough, that’s great…. until they get bitten in the end for using a reckless, irresponsible company that has no business in this industry. However, then they will look for the quality, legitimate and honest hosts, whom still offer great service and generous limits (more than they’d need anyway, without making up ridiculous limits that can’t be met), and things balance out in the industry. Unlike those that are overselling to some extreme level that just destroys the integrity of the web hosting industry, because they aren’t helping to make things better at all.

Tags: affiliates, desperation and underhanded tactics, egos, fair play, hosting hype, Hosting Industry, irrelevant, it had to be said, openness and honesty, overselling, poor math skills, realistic, top 10 hosting lists, truth, Web Hosting

This entry was posted on Saturday, October 4th, 2008 at 2:16 am and is filed under Hosting Industry, Uncategorized, Web Hosting. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.