Do you need 100 gigabytes of disk space to house your web site? How about 150 gigs? Even if you'll never need that much space, hosting providers are offering it in the hope that super-sized specs will win new customers.
Hostway's "Superpowered Web Hosting" promotion is offering plans featuring 150 gigs of disk space, 1,500 gigs of data transfer and 3,000 email accounts for $9.95 per month. 1&1 Internet now offers 100 gigs of disk space and 1,000 gigs of transfer with its $9.95 a month business plan, while Go Daddy offers identical specs for $14.99 a month.
"There's obviously this arms race going on, with people offering absurd amounts of disk space and bandwidth," said Derek Vaughan. chief marketing officer of TechPad Agency.
The latest mega-specs illustrate the fierce competition in the hosting industry, where growth-hungry providers seek any available marketing advantage over key rivals. As prices for shared hosting plunged in 2003-04, storage was becoming significantly cheaper, and specs for disk space and bandwidth emerged as a favorite marketing tool, allowing hosts to add value to their plans without cutting prices and squeezing profit margins. In August 2004 hosting companies began offering the first shared hosting accounts with more than 1 gigabyte of space. By the fall of 2005, 5 gigabyte allowances became commonplace among the largest hosting companies. Less than nine months later, 100 gig hosting is here.
Will shared hosting customers ever need or use this much space? Many hosting executives and industry observers believe the mega-specs are a new take on the concept of "unlimited hosting" - promising customers unlimited resources at a fixed price."
"It's tough for a lot of us," said Lou Honick, CEO of HostMySite.com. "Our philosophy says that if you pay for it, you get to use it. When people are rolling up business by offering more than they can really give, it catches up to them. There's no such thing as unlimited."
The hosting prospect who makes decisions based on cheap pricing and super-sized features may not be that desirable anyway, according to Vaughan. "All that guy wants is the cheapest email and bandwidth he can find," he said. "You need to ask yourself - is that the guy you want as a customer. The first time someone comes along with a better and cheaper offer, he'll ditch you for another provider."
Posted by Rich Miller in Hosting
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