Ridiculously low prices

[webling]

I've been crunching the numbers as I've checked out some hosting companies that actually offer web hosting even lower than $3.00 a month. I was puzzled as to how they do it. I know I can't do it using VPS. But, when I considered colocation with a machine that has a 1 TB SSD or HD then the reality became possible. I saw one hosting company offering web hosting as low as $2.69 a month. I thought, that's just plain crazy but then as I considered doing colocation I realized you can still actually make money. One company offers it for up to 48 months (4 years). Then the price goes up to 7 dollars and some odd cents. With a box running a 1 TB HD you should still be able to bring in around $1200/mo on each machine. You would have a lot of time handling support however. And to earn a full time living you'll need to keep building your client base and adding servers regularly.

The competition has gotten so fierce it makes it harder for the little guy running VPS. But it's not impossible for the little guy to grow. He just has to get as fierce as the companies who are more established. Now, granted, the company offering 100GB of space for $2.69 a month is lying. You can't give that much space on that little bit of money and actually make money. They are overselling big time. My biggest websites that have subdomains with blogs and more use less than 10GB of space, about 5300 MB to be precise. Which means, offering 10GB plans is more of a reality than 100GB plans at such a low cost.

 

[Mivocloud]

It's interesting how you described everything. In general, such a business is quite possible, but it feels like a business of this kind is very difficult to run and it can be incredibly hard work. On the other hand, if you work with a bigger company, then everything will be cool.

 

[SharedGrid]

I considered doing colocation I realized you can still actually make money

Yes, this makes sense. A datacenter needs to make profit on the space they sell, then the dedicated server provider needs to make a profit on their servers, then the VPS provider needs to make a profit on their VPS' - You have 3 different people needing to make a profit in this chain, which bumps up with price each time.

Going direct to a DC and colocating your own hardware will generally cost you less. Although sometimes it's not as simple as that, as dedicated server providers may get bulk discount etc, but you get the general idea.

Bigger SSD's/NVMe drives are also cheaper per GB so due to economies of scale, this also reduces your expenses.

 

[OnTheCloud.co]

The other thing to consider is this: Is there more to their business than the one brand? Think of hotels, typically an owner has more than one brand bringing different amounts of money. For us, we have a brand that sells packages less than $3. Does it make much money? No, but it helped pay for our cPanel Partner minimum contract at one point with additional cPanel accounts!

 

[Greenhost.cloud]

It's wild how the hosting market has shifted, right? I mean, seeing prices like $2.69 a month makes you wonder what's really behind the curtain. It’s possible to make a profit with colocation, but it’s a tough game especially when you have to juggle client support and keep growing your server base to stay competitive.

 

[webling]

Yes, this makes sense. A datacenter needs to make profit on the space they sell, then the dedicated server provider needs to make a profit on their servers, then the VPS provider needs to make a profit on their VPS' - You have 3 different people needing to make a profit in this chain, which bumps up with price each time.

Going direct to a DC and colocating your own hardware will generally cost you less. Although sometimes it's not as simple as that, as dedicated server providers may get bulk discount etc, but you get the general idea.

Bigger SSD's/NVMe drives are also cheaper per GB so due to economies of scale, this also reduces your expenses.

That's the way I see it also. Although I'm not sure I want to maintain hardware because of the time I know it takes. I did find a provider what offers VPS with 450GB on SSD so that is getting my attention. I only have to maintain the software and things associated.