Brent Oxley of HostGator has recently written an article explaining their hosting plan change, which gives their $9.95/month “Baby” plan 6,000GB/month data transfer and $12.95/month “Swamp” plan unlimited monthly data transfer — they are Selling Out.
How do all us shared web hosting companies sell more disk space and bandwidth for ten bucks then the dedicated server providers sell for hundreds?
Its an easy concept really. Every web host has a terms of service with CPU and memory limits. If your website consumed too much of its share of CPU or memory then most web hosts will require you to upgrade. When you purchase a dedicated server you cant get shut down for CPU or memory abuse so they have to sell you a plan based on what your site could use with less restrictions.
Together with responses in this WHT discussion thread, it is great to see Brent/HostGator being very honest about it. This comment sums up well:
To sum it up…
Cause downtime = in trouble
Not causing downtime = eat your heart out
That is pretty much the policy with all the mega shared hosting oversellers with hundreds or thousands of servers and almost unlimited disk space and bandwidth at their disposal. Disk space and bandwidth are no longer the metrics for web hosting plans. Use as much as you can, except when your dynamic websites started to use too much CPU/disk IO resources.
So, why don’t we stop using data transfer and storage for hosting plans, but measurable CPU units? It is all about marketing — after all to grow in astronomical speed in shared hosting business, you need to attract clients to fork out a lump sum for yearly plans so you get enough cashflow to build infrastructure ahead of time. Easiest way to do it? Promise them the unlimited (guarded by strict ToS) for a price cheaper than your competitors (if you pre-pay for 2-3 years).
I have seen HostGator mentioned it somewhere (damn, can’t find my reference) that they have observed sign up slowed down when their competitors increased their plan offerings. A counter-offering seems to be the best weapon here. They have also added 2/3 year hosting plans with reduced equivalent monthly price so they can look good on hosting review affiliation sites.
Yes. It is all marketing.
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I truly find it sad that a company like HostGator could not find something to separate themselves in an ever expending industry. Instead the treat your service based company like a commodity. Believe me this will NOT strengthen your business nor will it help your customers at all.
Yes they are a big host but instead of taking the less imaginative approach of increasing packages why not do something truly outstanding?
If they were to look at Amazon’s S3 service I am sure you would agree that they pushing the envelope on what hosting can be. Why are they not pusing that envelope?
I am sure the have a lot of great talent working for them. I suggest they pull on that talent and find something that will separate themselves in the industry.
I am sure they think you provide fast servers, great support at a competitive price but so does everyone else.
Marketing or not these moves are not helping the hosting industry at all.
Funny that you mentioned Amazon S3. With S3, they are selling it in a way that hosting IS commodity :)
Exactly but S3 have picked a niche and are doing it right.
Hostgator can find a niche but choose not to.
Marketing or not these moves are not helping the hosting industry at all.
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