The true cost of budget hosting

Written by:
Lucie Sadler
Date Posted:
26 June 2019

How do budget hosts make money?

Choosing a provider
When it comes to choosing a hosting provider, the decision usually comes down to the customer’s budget, as opposed to what kind of service they really need.

Some consumers question why they should pay more for a server when some hosting packages cost the same as a cup of coffee. The reality is that budget hosting costs more in the long run – if you are paying a few pounds for your hosting package, then don’t be surprised if it fails.

Saving money?
Budget hosting packages are usually marketed as being reliable, high performance and with 24/7 support. Customers think that they are saving money, but there are bound to be issues further along the line.

What budget hosts don’t advertise is that customers are sharing their infrastructure with potentially hundreds or even thousands of other customers on the same server.  Shared environments run the risk of services being compromised in the form of security flaws or Malware. Any sites that share the same server could also be victim to a DDoS attack on a customer, especially if the sites are targeted as they contain sensitive content or material.

In August 2016 a leading budget host experienced a catastrophic crisis when a script error deleted tens of thousands of websites. The company did not have a backup copy of all customer data and it took some companies several days and even weeks to restore their sites. Only customers with offsite backups were able to restore their websites with an alternative host, but others were not as lucky.

How budget hosting really works
So, how can budget hosts offer extremely low prices and still make money?

The main thing to consider is that budget providers have a business model which means that they host lots of customers, charging very low monthly or yearly costs. This means that due to the cost of training and employing staff, each Systems Administrator needs to be responsible for hundreds or even thousands of customers in order for the company to make money. This is after the costs of running the business, marketing budgets etc.

When you think about it in detail, how can one Systems Administrator successfully manage a thousand customers’ technical problems? This support ratio is definitely not in the customer’s favour and will affect the level of service that you receive.  It is very common to hear reports of customers not being able to contact support teams, receiving bad service, as well as continuous downtime and performance issues.

Budget hosting providers also tend to offer ‘unlimited’ services, but usually, have hidden costs that mean that they can suspend or charge customers if they overuse services such as bandwidth. Similarly, there are other hidden fees and chances for the provider to upsell on the initial package, for things such as website migrations, domain registrations, dedicated IP addresses etc.

The providers in this market know that they are charging too little for their service and that their customer support isn’t the best that it could be. They will most probably prepare for the fact that they will lose a certain amount of customers per quarter but have a business model which means that they can easily replace customers.

Managed is best
Paying nearly the same price as a cup of coffee (in Brighton, anyway!) for a service that keeps your website online and stores your data is a risky option, especially as you are sharing the server with so many other businesses. Paying so little for a service that is integral to your business means that you will definitely be compromising on something.

With a hosting provider, customers need responsive support and access to engineers with extensive knowledge of how their systems work. Managed hosts can offer this level of service and also have much smaller support ratios, meaning that the engineers often get to know the customer’s platform and can make informed decisions.

The true cost of budget hosting really becomes clear when websites grow in size and complexity, and the customer needs a high level of technical support. Management does come at an additional cost, but the savings, in the long run, are hugely beneficial, especially when it comes to the security of your website.

Need a managed hosting provider that can support your business? Get in touch with our sales team today on 0800 612 2524.

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