Why is Hosted Disk Space So Expensive?

dhclab49 asks: "Recently, I wrote a data-driven web application for a customer, and when it came time for them to select a hosting company, what I found was that most hosting companies charge a LOT for disk space. Most of them have accounts for $10-$30 per month, a bit more if you add in a database account. However, they almost all limit you to around 250MB of disk space, with extra space costing like $1/month per additional MB of storage. The app I wrote manages the customer's workflow and is meant to allow them to generate PDF documents and store them online, so I really need a few gigs. In an era where hard disks cost about a buck a gig and are getting cheaper by the day, how can hosting companies charge $1000 per gigabyte per YEAR?! And are there any alternatives out there for hosting a data-driven website at a reliable datacenter with a few GB of space for under $500/mo?"

Comments

One option

[Omega Hacker]

A friend of mine and I are starting up a company called PDXcolo.net. We're using User-mode Linux to host virtual machines, where you get your own copy of the distro, your own RAM, etc., on a shared machine. You get full root access to the machine, and can (within reason) do anything you want with it. Our base packge (for $20/mo) includes ~64MHz of proc, 64MB of RAM, 2GB of disk (your distro is *not* part of that unless you make significant changes), and 10GB of transfer per month. Additional disk is only $1/GB/mo, and bandwidth is $1.50/GB. 'Machines' are available in power-of-two multiples of that basic config, so far up to 8 'slots', or 512/512/16/80. More can be arranged special-case.

If you're interested, email beta@pdxcolo.net and we'll get you set up soon (merchant account troubles are our main slowdown right now) on our initial machine. That box has 2x 200GB disks in a RAID-1 config. We're planning on doing something on the order of a 3x RAID-5 arrangement on all new hardware, and/or a significant SAN setup.

Our machines are located in a well-respected datacenter in downtown Portland (hence 'pdx', our airport code), and as we build up our infrastructure daily backups will be available over and above the RAID on the hosts. We've got one circuit so far that we've pushed to 25Mbps, an d will be adding more circuits as we get our first customers.

So, if what you're doing doesn't require mega processor or RAM usage, but lots of disk, you might consider using one of our virtual machines to host your app.

United Hosting

[Landaras]

I'm sure that everyone will be submitting their favorite hosts, so here's mine.

United Hosting

18 bucks a month for a gig of space, 34 bucks a month for 5 gig, and all sorts of other plans. You also get unlimited MySQL databases. Although they don't offer telephone tech support (they're based in the UK, and most of their clients are in the US) their support has been great! They have fast turnaround time on their ticket system, and are quite responsive through IM clients.

I've been so impressed, I even advertise them for free on my company's site.

If you want the IM name of one of their owners (who I talked with pre-sale and who has personally handled some of my tech support issues), just email me at userid:neil domain:wehneman.com and I'll pass it along to you (with his permission of course).

United Hosting is also pretty much an exclusively Linux shop, for those added brownie points.

The Ads man

[Drakon]

heh, ever thought of reading the ads on slashdot? They're right there across the top of the screen!
well some of the advertizers, ServerBeach comes to mind, will give you a complete machine, with a 60 gig drive for 99 dollars per month (450 gb transfer)
this machine can also be used for things like mail, ftp, or whatever
99x12=1188/60=19.8 per gb per year
and that's not just disk space

Because they go ya...

[dasmegabyte]

The web hosting market space leaves little room for profitability in default configurations. The problem is, you HAVE to get a low price or people will ignore you. I've seen absurd offerings like 50 gig of bandwidth and 300 meg of space for $5 per month. There's no way this is cost effective...50 gigabytes of bandwidth is the equivalent of 154 kbit per second. Get 7 people actually pushing at that level and you'd have the equivalent of a T1's bandwidth for $35 in revue, which at least around here is a $565 loss.

So you oversell. Of course you oversell...chances are 95% of your users will never hit that level. If they do, you make sure your service agreement has a "drop you at any time we like" clause. No problem. It's sleazy, but people never pay their bandwidth bills...shit, i owe my old co loc something like $500 and they never even bothered to send a bill, they knew I wouldn't pay it.

Disk space is another issue entirely. People will definitely hit their disk space limit, so you can't oversell it. And the people doing it will be content creators -- just the people likely to pay for additional play. Charge them up the ass, offer then your "second tier" service, and you've got a single client stuck on your service AND paying you more money for roughly the same support costs.

Of course, you *COULD* just buck the whole thing and charge what you like, or a percentage above what things actually cost you and your company. You can do sophisticated math on how much your time is worth vs. how much time you spend doing tasks and assign a value based on that. You're not going to have much success, but if you have quality service you'll get a few people anyway.