I’ve always wondered if most hosting companies even care about supporting their customers when traffic surges hit. A recently Dugg article “How Not To Deal With A Digg” makes it worth revisting those thoughts and putting up a bit of math to support that shared hosting companies are concealing a lot behind the bandwidth they offer in their packages.

Just like most gyms sell memberships to more people than could fit into the workout area if all those members showed up once per day, many hosting companies price their packages at levels that are only profittable if traffic stays very low. In the Seminal’s article, referenced above, they started with a shared web hosting package from iPowerWeb. That package offers 2,000 GB of bandwidth for $8/month - and I’m going to stay focused on that number because bandwidth is the number one place where shared web hosting companies fail to deliver on their promises (plus an 800mhz Pentium 3 with 1 GB RAM webserver that I run at work delivers 10-15 GB/day of web traffic for an application we only use internally, so the meagre specs on that hardware work fine for 275 GB/month [conservatively, 12.5 GB/day for 22 work days each month] over 100 mbps & 1 gbps network connections). A good price for bandwidth, for a hosting company leasing multiple OCx-class connections, is about $0.06/GB. That means that 2,000 GB of bandwidth works out to $120/month. In fact, your $8/month is only enough to pay for about 133 GB of bandwidth before the hosting company starts dropping into the red.

Yikes! The truth is there’s no way those lower-end hosting companies can make money from basic web hosting packages if even a small percentage of their clients are using a good chunk of the allotted bandwidth. It’s true that the numbers presented in the hosting package descriptions are typically loss-leaders, but the packages and services offered by any hosting company should be capable of reaching what they’re rated to. And, if the high bandwidth usage is a problem thsn companies should either ask users causing them a loss to leave (which sure would get those companies a lot of attention on Slashdot and Digg) or they should also institute and disclose a rate-cap of how much bandwidth/second can be used (for example: 2,000 GB/month over 2,592,000 seconds for a max rate of ~768 KBps).

In my experience of content sites’ daily traffic patterns, most non-rich media websites see averaged daily traffic rates that are only 5-15% of their peak daily rate. Let’s assume that a front page link from Digg will only triple your normal peak rate of visits (unlikely) and then work backward from 768 KBps to see what a realistic monthly usage would be from one of those shared hosting packages. One third of 768 KBps is 256 KBps, which represents our peak daily traffic rate when not featured on a big, linking site. Take 10% of that and get 25.6 KBps, or 26 KBps if we round to keep things clean. 26 KBps times the 2,592,000 seconds in a 30 day month is 67,392,000 KB of data, or ~67.4 GB/month when we’re talking in the same terms as those hosting plan providers. That seems more reasonable at a rate of $0.06/GB for an $8/month web hosting plan. Now only about $4/month goes to pay for bandwidth and the rest can pay for the hosting providers servers and staff.

Before we forget the whole point of this, 768 KBps means that an average content site with a 250 KB front page, JS, CSS, and images will take about 1/3rd of a second to transfer. Add another half second of latency, I know average latency isn’t that high but the server and browser take a little while to deal with each individual HTML, CSS, JS, and image to be transferred, and the total page load time is about 5/6ths of a second. Now grab this Browser statistics Firefox extenstion and check your own shared host website. This site has a 156 KB page load, is happily hosted on a 1and1 shared server, and has a 4.5 sec. average page load time and 1.8 sec. minimum page load time according to Google’s webmaseter tools and the large number of page loads their spider does of this site. Odds are you’re looking at a download time a lot higher than 5/6ths of a second. If that’s the case then how can your shared webserver ever stand up to the traffic experienced when being Dugg or Slashdotted?

Plain and simple, that shared web server won’t cut it when you’re Dugg or Slashdotted. The artificial statistics I’m using above, of 768 KBps peak and 26 KBps sustained, make it clear that shared host webservers aren’t capable of profittably delivering the 1,000+ GB/month that most of them advertise. Real world page load times indicate that most shared hosting companies can’t realistically sustain a 768 KBps peak rate or 67 GB/month of traffic to your site. All the caching and HTML/CSS-tweaking in the world won’t save a website when it still has to get squeezed through a skinny pipe.

Sadly, many shared hosting companies are generally happy save money offering poor service and then by allowing higher bandwidth users (costing them $0.06/GB) to move elsewhere. I really hope this practice goes the way of selling CRT monitors based on the tube size instead of the viewable size. Since I’m not a fan of government regulation, I hope some of the bigger or higher-quality shared hosting companies start offering throughput guarantees to compete with the cheap shared hosting packages that can’t deliver.

4 Responses to “Dugg or Slashdotted: Why Shared Web Hosting is a Scam”

1. J-Ro, on April 3rd, 2007 at 8:46 am, said:
   

   Nice post! When you work out the math like that it all starts to make sense…

   Certainly our first shared host was a mistake. Of course you can’t have a popular site and get away with $7/month hosting fees. I’m hoping the new host we’re with described in my post holds up to the challenge…

2. bwb, on May 26th, 2007 at 12:47 am, said:
   

   Very true, we have written about this several times on www.webhostingunleashed.com, the real limits are hidden in the AUP/TOS and are the cpu and memory usage.

   People who use shared hosting need to know that its just for small sites that don’t get much traffic, people seem to think they get the world for $10 bucks a month. The truth is you will be fine if your site is not busy but otherwise you need to go to a hosting service that offers clear plans that only put X number of people per server or a VPS or dedicated server.

   Bandwidth and diskspace are just marketing at this point in shared hosting, soon the market will realize that and you will see X clients per server advertised as the new standard or some type of CPU/Memory usage rules more public.

   Nice article,
   thanks, Ben

3. Scam Related News (05/27/2007) : Scam Alerts, on May 29th, 2007 at 8:44 am, said:
   

   […] Dugg or Slashdotted: Why Shared Web Hosting is a Scam I’ve always wondered if most hosting companies even care about supporting their customers when traffic surges hit. A recently Dugg article “How Not To Deal With A Digg” makes it worth revisting those thoughts and putting up a bit of … […]

4. RAP, on August 9th, 2007 at 4:05 am, said:
   

   While it’s great you focus strictly on bandwidth, you completely ignored what everyone seems to ignore: server resources.

   Shared hosting means you share the resources. Hosting companies know you can’t use x-amount of bandwidth in a month, and they also know that anyone who uses even something like 50GB/month of bandwidth (which is a lot) are probably on a VPS or dedicated environment already, and are not going to spend a measly $5-10/month on shared hosting.

   You also give hosting customers a lot of credit, 99.9% of the people on a server are not even using 1% of their disk space and bandwidth. Hosting companies know this, so the bandwidth and disk space amount becomes a “who’s the biggest” game.

   If you honestly have to worry about your disk space and bandwidth (let’s say anything over 10GB/month in bandwidth) you should be spending more than $5-10/month on shared hosting, and start looking at a $20-60/month VPS environment (because let’s face it, if you’re pushing 10GB+/month bandwidth, you better be making some money from whatever your site is offering, if you’re not, you should probably rethink some things).

   >> the real limits are hidden in the AUP/TOS and are the cpu and memory usage.

   They aren’t hidden. You’re required to read and agree to the AUP/TOS/RAP when ordering hosting. Is it the company’s fault that hosting customers don’t read these things?

   Simply put, shared hosting in the $5-14/month range is great for family sites, personal blogs, testing things out, and smaller things like that. If you’re online to make money, offer a service, or anything else business-related, then treat your hosting like a business and actually spend a couple more bucks on real hosting. VPS is a great, affordable way for small businesses to get their feet wet.

   >> Bandwidth and diskspace are just marketing at this point in shared hosting, soon the market will realize that and you will see X clients per server advertised as the new standard or some type of CPU/Memory usage rules more public.

   Yup, just marketing. There’s certainly a glass ceiling for shared hosting, and your average user would be lucky to see even 500 MB of disk space being put to use. That’s who benefits from shared hosting.

   Will customers realize this? Probably not, bigger is better, right? V8 beats a V6 even though most people will never utilize all that power. The cheaper the price, the more bandwidth, and the more disk space, will always be sellers (and they have to be practical).

   But as you said, it’s all about the CPU and memory usage, nothing more.

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