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The High Cost Of Cheap Hosting

By June 3, 2013February 1st, 2018Website Design & Marketing
The High Cost Of Cheap Hosting

Every business with a website has to decide where to host it.  Searching for “website hosting” yields 282 million results in Google. With so many options, what’s the right choice? And how much should hosting your website cost?

This discussion isn’t just about price, but also value. Hosting can range from free to a few bucks a month to tens or hundreds of dollars a month. That’s an extraordinarily large range. How do you know which service and price level is right for you?

Web hosting isn’t as commoditized as many people think. While on the outside all hosting seems similar, the way hosting providers do things behind the scenes can be radically different. These differences are the factors that could make or break your business’s success and make the hosting of your business’s website trouble-free or a complete nightmare.

Website hosting should not be shopped on cost alone. This discussion should serve as a guide to understanding the hosting landscape so that you can make a smart decision to purchase hosting that matches your needs as opposed to simply buying the cheapest hosting.

Cheap Hosting: What’s In It For The Provider?

As a matter of economics, companies that offer very cheap hosting rely on a critical mass of subscribers. A lot of hosting accounts bringing in a little bit of money adds up to a lot of cash.

However, some hosting companies are more unscrupulous than others.

Some providers offer cheap or free hosting and then intercept client pages to inject advertising, badges or affiliate links. While most of these providers disclose this information in the fine print, most consumers don’t bother to read the fine print.

Some providers inject invisible information in order to measure the performance of their system. While this is not strictly unethical, it’s reasonable to ask up front if this is something your provider does so you’ll know whether your website is being altered in any way as it is served to your audience.

How bad can this get? A company in recent news found that when they performed a Google search using their company name as a keyword, their hosting provider’s links would appear as a subsection. The provider was injecting links into each page as it was served and although it had disclosed its actions in its terms, the customer had not read them.

This type of injection can have negative SEO consequences, especially as Google is cracking down on unrelated links and anything appearing to be spam. It can also create adverse perceptions for the brand, as searchers find the company website confusingly associated with a hosting provider’s links.

Injection of this type has other potential pitfalls. If the provider is injecting content into your site and they get infected, that infection could present itself as malware on your site. This could have the longer repercussion of having your site blocked by browsers or worse by search engines.

So what should you do? Before you’re enticed by words like cheap or free, read the fine print.

Is There A Difference Between Website Hosting And Email Hosting?

Yes. Website and email hosting have almost nothing in common. They use different technologies, different types of software servers, different types of delivery mechanisms, and different types of consumption mechanisms.

Most people believe that web and email hosting are interconnected because usually both are packaged and marketed together. These services do not need to be tied or purchased together. As an example, my company uses Google Apps for email hosting and Rackspace for website hosting.

It’s ok to have your email and website hosted at the same place, unless your provider happens to be good at one and not the other. Often times, I hear people suffering through bad service because they have the perception that they can’t move one of the services.

I always recommend to clients that they get the best email hosting for their needs and the best site hosting for their needs; even if that means two different companies. There is an increasing number of email-only providers; Google Apps and Microsoft are two examples. Both services provide rich cloud-based email service that can be accessed anywhere from any type of device.

Does Unlimited Really Mean Unlimited?

Many cheap hosting companies offer unlimited storage, unlimited bandwidth, or both, making the cost that much more enticing. However, most sites don’t need unlimited storage or bandwidth. Most web sites are small so the provider has nothing to lose by offering large volumes of storage. It’s a balancing act; some sites will use a lot of storage and bandwidth but most won’t.

Think of it this way: if you work in a ten story building you have the illusion that you have unrestricted and unlimited access to your phone. After all, every time you pick it up, you can make a call. The catch comes when every person in that ten story building picks up the phone at the same time. Then it becomes apparent that the building has limited capacity.

It’s the same thing with bandwidth. There is no such thing as unlimited bandwidth. Every server has a threshold, but every provider knows that most sites won’t come anywhere meeting that threshold.

So what’s the catch? The catch is that web hosting doesn’t consist of only storage and bandwidth.

Another element of hosting is computing power – generally a combination of processor speed and memory. The more processing power a server has, the more it can do. Better processing means more expensive servers for the hosting provider. As a result, many hosting providers have smaller processing capabilities for shared environments where many sites are hosted on one physical server.

Your business website may become slow or unresponsive if the server has limited computing power regardless of storage or bandwidth. Your website may also be affected if another site on the same server is utilizing a disproportionate amount of computing power.

Sometimes hosting providers do not disclose their processing capacity and almost never disclose how many sites share the same server as yours. If you’re doing math in your head right now and coming to the realization that the more sites there are on a server, the less computing power yours is getting, then you’re beginning to see the point.

So what should you do? Monitor and analyze your site analytics. If your site’s traffic grows, but the performance degrades, then your problem may not be storage or bandwidth. It may be computing power.

And remember that site speed and performance not only has consequences for your visitor’s experience and your ability to convert sales and leads, but also for your SEO.

When Are Backups Not Backups?

Backups and disaster recovery are common topics that are usually discussed and then promptly ignored. Unfortunately most people don’t know what makes a good backup and disaster recovery plan. Not all backups are created equal. Sometimes backups aren’t backups at all.

Recently, a client asked me to evaluate a hosting provider that claimed to have “Full Mirrored Backups”. To most people that sounds great. It implies that there is a “mirror” of their data available in case of a disaster. As it turns out, this is clever word play.

After reading the fine print, I found that the provider’s servers have mirrored hard drives. This means that every hard drive is paired with a second hard drive that maintains a real-time copy of all data. If one drive fails, the server keeps chugging along as if nothing happened and the bad hard drive can be replaced. Once replaced, the data is immediately “mirrored” again and life goes on.

This is good for uptime, so that one hard drive failure will not take your site down, but mirroring a drive is not a backup. What happens if the server fails or both drives fail? What happens in the case of human error when you accidentally delete or overwrite a file, or in the case of a natural disaster that takes out a facility, as happened recently during hurricane Sandy? Where do you restore your data from? In this case; nowhere.

I see a lot of variations on this where a “backup” is implied in the language, but no true backups exist.

For the record, a backup is considered valid if the data being preserved is stored onto a different location than the server where it is hosted. This is key because if you are backing up your data onto the same server and that server fails, you’ve lost everything.

Another aspect of backups is retention; your data should be preserved for a period of time such as two weeks. For example, if you overwrite a file on your hard drive, but don’t realize it until a few days later, you should be able to go back in time to retrieve that file at a specific point prior.

If you don’t have these two things at a minimum, then you don’t have backups.

Finally, the best backups not only store a copy of your data on a separate server, but at a separate location. If your backups are on two servers in the same building and that building burns down, or again, if there is a natural disaster like the one witnessed recently, then you will still lose everything.

What About Self-Managed Hosting?

One of the most common ways that hosting providers lower their costs is by providing self-managed hosting. Self-managed means that the provider will give you space on a server and you handle the rest.

For people who know what they are doing, this can be a tremendous cost savings, but for the vast majority this leads to unintended consequences. The most common one that I see is when people who don’t know what they are doing install a site and assume that everything is working when it isn’t.

I have seen countless companies come to me and report that their sites are not generating leads only to find that their forms weren’t set up properly and weren’t being delivered. Broken forms mean no leads and creates the perception for your prospects that you simply failed to respond.

Aside from errors and omissions, there is also the ongoing maintenance to consider. If you have a content management system that uses plugins, themes or templates, eventually that software will need to be maintained. In a self-managed environment, the burden falls entirely on you.

Another potential pitfall of self-managed services is that providers typically draw a hard line on support. They will provide support on their infrastructure and perhaps offer some additional support as a courtesy, but for the most part, you will be on your own.

Hi, My Name Is Steve. How Can I Help You?

While we’re on the topic of support, not all support is the same. Some companies have good support, some don’t.

A common strategy that providers use to reduce costs is to outsource their support.

Sorry non-American readers, I know that may imply that “outsourced” means “not in America”, but that’s not what I mean. I mean that the support is being provided by an organization that is outside the hosting provider’s company; even if both are geographically in the same region.

Outsourced support is usually not as connected to the day-to-day machinations of the hosting provider. They also tend to be script-based. We’ve all had that experience where you call tech support only to find that the person on the other end of the phone is reading from a script and nothing on that script is helpful to you.

The end result is that you may not get the support you need; at least not without investing a lot of time on the phone.

That’s A Nice Domain You Have There. Is It Yours?

Your domain is your property. Or is it?

If you go to any name brand registrar, you can purchase a domain yourself. However, almost all hosting providers have domain purchasing integrated into their services.

It all sounds great until you discover that some providers purchase domains on your behalf, but register those domains to themselves. In that case, they own the domain and license its use to you.

Typically, this doesn’t become an issue until a business wants to move its site to another hosting provider. At that point the business is presented with a bill for the purchase of the domain that is typically a premium charge.

To avoid such catastrophes, I always recommend buying a domain with a reputable domain vendor and bringing it with you to a hosting provider. This guarantees your ownership of the domain.

You Can Edit Your Site For Free. Isn’t That Great?


If you use a platform such as WordPress or Drupal, content management is built in. However, some hosting providers offer their own homegrown content management systems and tie you to those systems.

I’ve seen a few and have been impressed, but I rarely recommend them. The problem with homegrown content management systems is that your data may be stored in a proprietary way that doesn’t allow the site to be moved. When you want to switch to another hosting provider, web developer or generally revamp your site, you may find yourself locked in with no way out but to start from scratch and rebuild everything.

With a system such as WordPress or Drupal, if you don’t like your hosting provider, you can simply move your site to another facility that supports that technology.

If you are going to host your site with a provider that offers a proprietary content management system, inquire about the portability of your data. Can it be exported and what will that export look like? Armed with better information you’ll be able to make better decisions.

So What Else?

There are countless other factors that can distinguish the right hosting platform from the wrong one such as security and the impact of speed on search marketing.

The most important thing any business can do is reasonably insulate its domain, site hosting, email hosting and content from creating a roadblock to the overall marketing of the business.

The best course of action may be to work with a good and reliable web developer who can advise on the right course.

So How Much Should You Expect To Pay For Web Hosting?

Cost = Free

If you just don’t care go with free hosting and may God have mercy on your soul. But in general, no business should be using free hosting.

Cost = Less than $10/month

If you have a competent developer who can maintain a copy of your site and your site requires infrequent changes. Go with one of the “few bucks a month” providers that offer solid service but little business continuity. In the event of a failure, your web developer can push a backup copy to the hosting provider. Your risk is then tied to the developer’s ability to maintain a good backup. You can also run and manage backups yourself using a third-party tool or plugin, but remember the burden still falls on you, and most effective backup solutions aren’t free, so add that to the cost of your hosting.

Cost = $30 to $100

Now this gets tricky.

Your web developer may need to maintain your site periodically. For example, if you are running a CMS such as WordPress or Drupal, your developer should be updating the software and plugins as well as maintaining the overall health of the site. In this case, the basics may result in a hosting fee plus a fee from your developer for maintenance. For most business websites, this is where you should be unless you have someone on staff knowledgeable enough to perform the maintenance.

Cost = $100+to $A Billion Zillion

Once you get into a range where you have sophisticated needs in any category (bandwidth, processing power, etc.), you’ve got a custom need and should really be talking to your developer. Large ecommerce sites, sites with intensive database needs or high-traffic sites will likely need a dedicated and fully managed hosting environment.

And The Grand Finale… So what’s the right answer? Ultimately there is no right answer. Every business has unique needs. Hosting should be structured around those needs.

Have you had hosting nightmares? Do you have hosting questions? Feel free to fire away in the comments section below. I promise to answer each one.

And if you have a friend or colleague who is struggling with any of the topics above, please pass this article along to them. Hopefully it will help.

Update: sometimes the comments spur additional thoughts. Here are some bonus considerations…

Do You Buy Hosting From A Reseller?

This is an all too frequent occurrence; you pay your hosting bill on time and wake up one morning to find your email, website or both gone. If you are buying your hosting from a reseller, you should have a reasonable guarantee of service that not only includes the technical aspects, but also includes an assurance that your reseller’s account is current with the hosting provider.

I don’t want to steer you away from resellers because there are good reasons to hire a reseller instead of hosting with a provider directly. For example, there are lots of companies that resell Amazon Web Services. AWS is a fantastic service, but not for the non-technical. AWS is an ideal scenario for hiring a reseller because AWS provides the infrastructure and the reseller takes care of your service and technical needs.

But if the reseller fails to pay the bill to the provider, then it’s you who are out of luck.

Many thanks to Sharon Hurley Hall (@SHurleyHall) for bringing this up.

Join the discussion 15 Comments

  • Lisa Buben says:

    Oh yes, I learned early on, you get what you pay for Ralph. I started with a reseller and it was hard to reach her being in different time zones. I quickly switched to direct with Hostgator and love their 23/7 service. I believe I have a baby package and recently did not have enough space for a backup, I had to delete old backups and do a new one. Does that mean I should upgrade soon?
    Great topic here and great information, I don’t see many posts on this subject 🙂

    • “You get what you pay for.” That’s what I should have named the article. 🙂

      Backups should work on an un-maned cycle that doesn’t require human intervention except in the case of a problem. In other words, you shouldn’t have to delete backups. This is usually known as retention. Let’s say you have a retention period of two weeks; your data will be backed up normally on a day to day basis, but any archived data older than two weeks will be deleted automatically. Retention is what allows reasonable storage limitations. The retention period can be increased at the expense of more storage.

      Let’s look at that practically…

      Let’s say you have a file called “daily.jpg” and that file changes every day. As part of your normal backups, that image will be backed up every day. In a 2 week retention cycle, you will have 14 copies of that image plus the current one. if you ever need to go backwards and retrieve a copy, you can do so from any day up to the retention limit.

      If the file never changes, then it will only be backed up once. Normally backup programs do not keep multiple copies of unchanged files, only changed ones.

  • You get what you pay for is so true. And I’d add, from bitter personal experience, always be sure that if you buy from a reseller he’s paid his hosting fees. Otherwise you could wake up one day without a site.

  • SMM says:

    As a reseller for 18 years, I have had to deal with the cheap companies when a frustrated client comes to me for help. My worst nightmares are that company that has that woman race their cars. I have had more than a couple of clients have to hire attorneys to get their domain name back from them, for instance. It’s all about reliability and support. I commend you, Ralph, for a clear concise and to the point article about what I’ve been explaining to clients for many years. Ultimately “You get what you pay for.”

    • It breaks my heart to hear those stories. Especially when the client doesn’t see it coming.

      Thanks for the comment and for visiting. We hope you’ll come back.

  • Hendrik-Jan Francke says:

    Nice article. You make some good points. I like the 10 story metaphor for explaining bandwidth.

    After 7 years of having a web design company, we have seen great hosting companies become average. Usually attribute to growth. They incur growing pains as they scale up. Web servers that used to deliver blazing fast sites begin to slow down. We usually begin to move our client sites when we realize support to address the slower sites is also slow.

    • Virtualization and scalability have become our two favorite words for our hosting platform. Always build for growth and for flexibility.

      Thanks for visiting and commenting.

  • Do you have any mid-range hosting companies you could recommend? We are thinking about switching from bluehost. They have gotten really slow and google speed tests back up this fact.

    • I’m a big fan of determining the hosting based on the site or app you are deploying. You should look at the technical requirements, the analytics as well as the storage and bandwidth requirements and go from there. The first question to answer is what scale of service do you need; for small requirements shared hosting might suffice. For bigger requirements, you may need to go with a virtual platform or a dedicated server on the high end. Can you describe your requirements?

      • Right now I am hosting three wordpress sites on shared hosting. All sites are built on the genesis framework. Two of them get
        less then 200 visitors a month per site. For Long Island Marketing company the
        site is only a few months old but gets the most traffic. Its still a
        small number think 600-1000 unique visitors a month. Each month traffic
        is increasing but in no way do I anticipate it being at the point where
        shared hosting would not be a viable option going forward over the next
        12 months. I don’t plan on hosting any video on site or any other massive files. The question is more which shared hosting is going to provide
        the most bang for the buck and at the very least provide decent loading

        • Take a look at Media Temple’s DV shared virtual hosting product. I’ve run 60 sites on a single DV program. The big hole in this program is the “bring-your-own” backup methodology. They claim a “managed” service, but I would argue that’s not a reasonable description (read my article on cheap hosting). Despite this, if you can get the backups sorted out, Media Temple is a great service. There’s an affiliate link on the right sidebar of this page to get you to the DV program.

          In my mind, it’s worth the $50. I’ve used Bluehost and Media Temple and Media Temple is a stronger service with better support.