Recently, i have a lunch with a friend who is a web hosting provider. He told me that the web hosting busiess is extremely competitive nowadays. It is because there are many web hosting providers offer high hosting space with low price. He showed me an advertisement from a local provider : 3GB space, 15 GB bandwidth with only RM 180 (USD 50) per year.
I asked him, "can this provider survive or earn profit with such low price ? "
He told me, " Well, I don't know, but for myself, if I offer more than 500 MB with bandwidth 5 GB for RM 180 (USD 50) per year, i actually making lost -- if the client fully utilize the 500 MB space and 5GB bandwidth, I said that because i take into account of data centre rental fee, server maintenance cost, adiministration cost etc..."
It means many web hosting providers are playing a dangerous game - Offer huge space, low price , but at the same time "expect" the client will not utilize full space and bandwidth.
It this circumstance, can you expect good servces from the hosting provider that offer with such low price ? It is also a potential risk that suddenly the hosting users upload huge files and utilized fully space and bandwidth which may cause the server overload. Meanwhile, it is also easy for the competitors to pretent as a client to sabotage the hosting provider, by sign up the 3GB space, fully utilize the bandwidth and space with only RM 180.00 (USD 50) , What a low cost to saborage a competitor !
(How about other countries' web hosting industry trends ? welcomed to reply. ) 
This article is written by myself , source from http://malaysiawebdesign.blogspot.com/
__________________
James
Malaysia bedroom set manufacturer
Singapore used cars dealers
Busy posted this at 10:10 — 19th March 2006.
He has: 6,157 posts
Joined: May 2001
Some webhosts oversell, these hosts are frowned upon.
a normal package these days is about 20gb for $100 US a year, which is a good income for them. They rent space in a datacenter, brought in bulk its cheaper.
USA seems to have the cheapest hosting, in New Zealand for example we could pay 3 to 10 times the prices quoted so is cheaper to go off shore. Also off shore enables tax breaks - ie you dont pay any because the service is not in the country
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jamestcs posted this at 06:34 — 20th March 2006.
They have: 24 posts
Joined: Sep 2005
Wow, i received quite number of feedbacks and PMs about my post and blog. Some agreed and some disagreed with what my friend's said in the post.
well, it is true that on average, most website doesn't take more than 50MB space, but offer 3 GB and expect them not utilize fully is actually a myth !
why i said that ? because it forgot to take into account one important element - the EMAIL !
most web hosting providers offer the GB space combined email space and web space. If the website taken huge space, for example , 2GB (probably some big files to be downloaded) and the bandwidth limit is 15 GB/month, then the provider can expect charge the users in case of exceed the bandwidth quota.
But don't forget EMAIL will consume space ! if the user setup about 10 email accounts for his staffs, if all the users use webmail, or using outlook express with the option " leave a copy in the server" , and some of them like to keep files, attachment in the webmail, then you do a simple math :
10 users x 30 MB of emails per month (include attachment) store in server = 300 MB/month
300 MB x 12 month = 3600 MB per year !
You see, it is obviously very easy for a user to reach 3 GB space with NOT EXCEEEDING The bandwidth quota per month.
I have many friends who like to keep jpeg files, movies clips in the GMAIL or Yahoo mail, and now their email space already reach 700 MB ( for less than 1 year) ! just imagine if they use the normal POP email what will happen ........
Thanks
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James
Malaysia bedroom set manufacturer
Singapore used cars dealers
Busy posted this at 10:02 — 20th March 2006.
He has: 6,157 posts
Joined: May 2001
Also backups, databases, log files ....
James posted this at 00:05 — 27th March 2006.
He has: 139 posts
Joined: Dec 2005
From my experience in the hosting pit for several years now,
I don't think it's simple as your friend put it.
Overselling is a common, clever business practise. It's only unethical and ridiculous when it's not controlled properly and blown way out of proportion. Many of the biggest and most reputable hosts - oversell, but they do it in such way that their server resources and performance is not compromised.
High resources for low prices is a big selling point unfortunately even though the potential buyer does not need it. What I tell you is unethical - selling high space/bandwidth packages for peanuts and making sure the clients can't actually use the resources allowed by limiting their queries/connections and various other resources capped. This is good as con. But the hosts don't care as once the client buys (after being lured by the high space/bw plans) they've got money.
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