If a Web Hosting Company offers you 1,000GB of space, you can bet they're hoping that they will get themselves a sucker. The biggest HD these days is 500GB's but even then you need to ask yourself a question - they will give me and each of the next 500 customers space on HD that cost $200.00 and all I have to pay them is $5.00 per month?
Hmmm... What is wrong with this picture?
Or maybe something like:
how BIG is the computer that house all those Hard Drives?
Now, lets not forget the Monthly Transfer of 1,000GB’s, which cost them (that is if they ever bought that amount themselves) $5,000.00 per month and they offer that to every client? Give me a break! I'm not even mentioning the cost of a server at about $1,000.00 each and Administrative and Tech Support cost etc.
Now, lets grab a calculator and start adding.
They will need at least 4 (3 is a must) technicians to run 24x7 service.
Add 24hrx$15.00x30 days = $10,800
Customer service around the clock - $7,200 per month
Sales Rep./Marketing. Lets pay this person $3,000 per month
Running the books is another $2,000 to pay a bookkeeper
Data center, office, $5,000 more
So far it costs them $28,000/month.
To payout that amount they will need 5,600 customers paying $5.00 per month.
Assuming one server can handle 500 accounts, they will need 100 servers.
1 server costs $1,000 x100 =$100,000. If the company takes back $1,000.00/month on that investment then they will need 40 more clients.
But here is where the problem comes.
To handle 5,600 they need at least 3 technicians, 12 around the clock. The best technician can physically answer only 12 - 16 emails per hour thus a second technician must fix the problems and third to constantly monitor the servers.
So, we need to add another $21,600 for salaries.
Again, we need another 4,300 customers and 80 more servers.
Wow, 10,000 customers and we never even paid any money yet for advertising, TAXES, twice more of support staff to handle an extra 4,000 customers and lets not forget the Company owner and we are looking for another 10,000 clients to cover the cost of operation and of course more servers, technicians, a bigger data center and more money to pay to the upstream providers and so on.
Oh man, I have to catch my breath.
Sure, they will offer you a Cadillac whereas in reality you will be lucky if you get from them a bicycle. They have to cut the costs and the only place they can do that is by sacrificing Quality of their services by cutting Tech Support and Customer Service Departments.
500Mbs of space and 20Gbs of transfer per month will satisfy 99.9% of users but most importantly is you will know that you are going to deal with an honest Company that won't take you for a fool and will not treat you as such
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