Price Competition Emerges in Grid Hosting

This year's hot trend in web hosting is grid computing, which employs server clusters to bring the advantages of enterprise-level infrastructure to affordable web hosting plans. As with any trend in web hosting, it hasn't taken long for a price war to break out.

On Tuesday Los Angeles hosting firm Media Temple unveiled GridServer, offering industrial-strength specs for just $20 a month. The account comes with 100 gigabytes of disk space, 1 terabyte of monthly data transfer and the ability to host up to 100 domains. Two other prominent grid initiatives launched this year by dedicated hosting companies, ServePath's UtilityServe and Rackspace-backed Mosso, price their grid hosting plans at $99 a month. Media Temple's pricing could also prove disruptive to shared hosting providers with clustered hosting plans, including NetFirms and Cartika Hosting, which offer cheaper monthly pricing ($9.99 and $14.99, respectively) but much lower allowances for disk space and bandwidth.

Other hosting providers with grid offerings include Concentric and Data Return. The field could become more crowded soon, as several dozen providers are said to be test-driving a "grid operating system" developed by 3tera.

Media Temple got a major visibility boost when GridServer's launch was featured on TechCrunch, perhaps the most widely-read blog tracking the development of "Web 2.0" companies. TechCrunch hosts with Media Temple, and boasts an audience of A-list bloggers and startups offering software as a service (SaaS).

Those readers are a key target market for grid hosting providers, who can accommodate bursts of traffic commonly seen from links at Digg or Slashdot. With dedicated servers, web site operators must buy enough horsepower to handle the high end of their expected traffic loads, even if those levels are temporary. Grid hosting offers utility computing, allowing customers to start at a lower base price and pay for additional resources only as needed

GridServer, a proprietary system designed by MediaTemple, offers huge allowances for disk space and bandwidth but has overage fees for heavy resource usage based on grid performance units (GPUs). "Since the grid is essentially a 'pay for what you use' system the lower barrier of entry for utility hosting works out," said Media Temple CEO Demian Sellfors. "(Media Temple) attracts a fairly demanding level of customer. Many of these customers will end up exceeding their GPUs and have a higher monthly bill. However, the mass majority of our customers will cruise along fine at $20 a month."

Media Temple recently moved much of its infrastructure to a new data center after power outages at its previous facility over the summer.