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.”