What is Shared Hosting?

Shared website hosting is when a hosting company hosts multiple websites on a single machine. This is a very common practice in the industry — almost every hosting company does it. Here’s why: if a server costs $1,800 (a very low price for one, but it works for this example) and the hosting company requires a 1-year return on investment, they’d need to charge $150 per month for that machine. So if a shared hosting package sells for, say, $2 a month, they’d need at least 75 clients on that hardware just to break even.

There are two ways to make money in this scenario. The first is to keep those 75 clients at $2 per month, and over a year you’ll turn a profit on that hardware. The second — the way most companies operate — is to buy cheap hosting hardware, pack 300 or more clients onto it (some cram a thousand or more onto one box) at $4 a month, and you’ve paid off the equipment in the first two months. Everything after that is pure profit, at the cost of customer satisfaction. These companies aren’t worried about retention; to them, it’s a revolving door — they can easily replace a departing client with a little advertising.

If you don’t care about your customers, that’s not a bad business model. Sign them up for a year, run some ads every 3-4 months, and repeat. Every few months brings a fresh wave of new sign-ups, plenty of profit, and when a customer wants to leave, you just let them go.

Simply Web Services is committed to retaining our clients, so we do things differently. You won’t find 300 accounts crammed onto one machine, inflated hosting fees, or bargain-bin hardware with us. We invest in our clients, just as they invest in us.