Web Hosting Companies: The Price War

If you’ve ever wondered how shared web hosts can afford their steadily decreasing monthly fees, then you’re not alone. In an industry with standardized feature sets, price is one of the only features that can be changed to attract new customers. But with monthly fees already down to as low as $7.00, can hosts afford to drop any further? And if you’re a potential customer, how do you select the best web host for you with such similar features for the same price amongst the thousands of hosts out there?

First, remember that there are still some web hosting companies out there that are not aiming for the low-cost customer. The key features every new customer is looking for are price, bandwidth, features, reliability, and support. In the beginning, however, hosts only focused on space, bandwidth, and features. As technology developed to support unlimited bandwidth and storage, web hosts were forced to look for other ways to compete. One of those new areas was technical support. Only the larger hosting centers are able to support toll-free, 24/7 support centers. Calling a potential host during peak hours may be a quick way of determining their capabilities and overall advantage as a host. However as the industry’s evolved, most hosts are aware that this standard is necessary nowadays to be successful.

Second, hosts can only focus on certain areas. A cursory glance at the front page of a potential host should be all it takes to determine which areas it promotes as strengths. Again, the services are pretty similar, which is why shared hosts are being forced into a price war. While in the short run, such a war is great for customers, eventually reducing monthly fees as a strategy will not be possible.

Third, ask the hosting company how they can afford offering their users such a low monthly cost. The answer in most cases will be that without setup fees, such low prices can only be afforded if customers have a long-life span with the host. Web hosts depend upon customer longevity as well as loyalty. Most hosts only need their clients to stick with them for a year or more to make it worth it. Even more cost effective are the clients who purchase additional accounts, leaving older accounts dormant, using few resources.

Finally, where does this leave the customer? The price wars are only intensifying as hosts drop their prices lower and lower. But how will it all end? As hosting continues to evolve with the up-and-coming technology, the “new” feature or service will be found and offered by aggressive marketing before the rest of the competition finds it. That is one way the price wars may end, if only temporarily. Of one thing we’re certain is that dropping rates and rising features can only be good for the customer. If you’ve been waiting for the “right time” to get your own website, it’s now.