Unlimited space and bandwidth equals unlimited risks
For end users that host with web hosting providers offering unlimited space and bandwidth, have you ever wondered how many shared accounts these providers stack on each of their servers? Probably not if your site is always up, but if you have a problem, could be the CPU and RAM resources on the server your account resides on is being sliced too thin.
Will that provider tell you how many accounts they divvy per server? Probably NOT. There’s no industry standard, but my guess would be between 100 to 600, with an average around 300. I’ve heard estimates over one thousand though.
Cost Analysis
Doing a sample cost analysis – if your provider is leasing a dedicated server from a data center for $179/month, that cost plus overhead like support and backup add up to their overall cost to maintain that server. Let’s say it’s roughly $275/month (hard and soft dollar expense). In this scenario, charging $3.95/month for unlimited space and bandwidth, a provider could break even at roughly 70 accounts.
But wait!
What about costs to acquire clients, employee payroll, vacations, health care, liability insurance, taxes, bandwidth overage charges and so on? Being conservative, this could drive that cost to $500 or higher. Have you checked recently what it costs to bid on keywords with Google Adwords?
Some specs
A Quad Core Server with 2GB RAM should be able to host 200 accounts (depends). Most dedicated servers share 100Mbps uplink ports, so the maximum bandwidth of all accounts combined cap out at 33 terabytes. Let’s see – 33 terabytes divided by 300 users equals an average of 0.11 terabytes per account (110GB).
But wait, that’s the maximum transfer!
Most data centers only include up to 10Mbs bandwidth in that $179.00/month lease. Hmm … if we factor in included bandwidth, now we’re looking at 3.3 terabytes divided by 300, or 11GB per user. Sure, most static sites will never use more than 11GB bandwidth monthly, but if you have a growing site, and start using resources beyond these specs, your account will normally get flagged for termination.
Looking at unlimited from another angle
Let’s look at this from a different angle. Most dedicated servers are spec’d with 80 to 250GB SATA hard drives. Divide 250GB by 300 accounts. Hmm … that’s 833MB each. Of course, the average size of sites is much lower than 833MB, but should your site exceed this threshold, what happens? Does your provider’s unlimited policy kick in, allowing you to have more of someone else’s resources on that server. I think NOT. Again, your account will probably get flagged for termination. OUCH.
Why should you opt for plans with limits versus unlimited
First, plans with published space and bandwidth limits are a known quantity to measure against, versus some vague policy of CPU and RAM allocation left to the providers discretion. This allows you to match the resources you anticipate using versus those offered. More often than not, if your unlimited account is terminated for exceeding these provider’s usage policies, you’ll also lose your data (unless you’re doing remote backups), plus risk losing your clients. How valuable is your site to your business?
Web hosting expense from a business perspective
Price comparing the $4/month unlimited plan to a $7 limited plan (let’s say 10GB space and 2TB bandwidth) – seems disproportionate on the surface ($48/year versus $84). If I’m an end user posting an informational site for my non-profit, that $36 variance might make a difference. But if I’m a business, that $36 wouldn’t cover one hour of downtime, or the loss of one prospect or client. As a business owner myself, I’ll take some risks test marketing, but web sites are an extension of who and what you are as a business. When ad space alone can cost a few hundred dollars, by comparison, unlimited web hosting plans seem closely related to unlimited risks.
I would say that unlimited space and bandwidth is just a marketing trick. So don’t allow hosts to fool you.