Selling Out
Written by Brent Oxley on October 6, 2007 – 1:14 am -Is HostGator “selling out”?
As many of you may already know, we have updated our shared hosting and reseller hosting plans yesterday. The plans went from crazy to just downright insane in terms of us adding HUGE amounts of disk space and bandwidth without increasing the price. I’m going to do my best to explain the whole situation and assure you that the new plans aren’t going to put HostGator out of business.
We have many customers who are going hysterical from being so happy about the plan increases. These are the same customers with whom the majority were using less then 1% of the old plan. It’s like going into an all you can eat buffet and being told you can eat more. I really don’t understand why everyone gets so excited because all we really did was go from unlimited to more unlimited.
Yes I said unlimited! The forbidden word we use to worn potential hosting customers to stay away from, and now HostGator has officially sold out and joined the competition with offering scam plans (we actually did this the last time when we increased our plans, but shhhh).
What exactly is unlimited? Well, I just got done going to the top 5 largest web hosting companies I could think of and the lowest plan I could find was for a few 100 gigs of disk space with thousands of gigs of bandwidth for less then $10 a month. These are all scam plans because like most hosts we have something called a Terms of Service that mentions CPU and memory limits. It is close to impossible to use what we are all selling you without being suspended for going over CPU and memory.
Of course many of you reading this will be shocked and rush off to one of our competitors to ask them if you can really use all the disk space and bandwidth without being suspended, and I’m positive they’ll tell you yes. In fact, my employees would have told you the same thing if they didn’t read this blog post.
Just ask yourself one thing…
How do all us shared web hosting companies sell more disk space and bandwidth for ten bucks then the dedicated server providers sell for hundreds?
It’s an easy concept really. Every web host has a terms of service with CPU and memory limits. If your website consumed too much of its share of CPU or memory then most web hosts will require you to upgrade. When you purchase a dedicated server you can’t get shut down for CPU or memory abuse so they have to sell you a plan based on what your site could use with less restrictions. At HostGator, we pretty much get an unlimited amount of bandwidth from our provider thanks to having thousands of servers. We also have 10,000’s of gigs disk space not being used. Giving away unlimited disk space and bandwidth doesn’t really cost us anything. It’s the CPU and memory that has a real value. A server will usually become extremely overloaded way before you ever get close to using the amount of disk quota and bandwidth it comes with.
If you plan on reading a hosting companies TOS to find out if they have CPU and memory limits it’s usually going to be a waste of time. We are all going to put some CPU and memory limit in there that can’t truly be tracked. However all us hosts have to provide a mystical usage number in order to answer a customers question which is… “how much CPU and memory can I use.” It really is as simple as if you crash a server or slow it down you will be suspended. At HostGator we put 200′ish customers per box and if the server load increases, it can generally be attributed to just one person on that server causing 90% of the problem. Sure, we have ways to track but in the end boils down to not wanting to sacrifice every other users’ experience on that same sever for just one or two websites using all the resources.
The number ends up being less then half a percent of customers per box that get suspended. I know this sounds terrible but if we didn’t suspend the .5% of customers that are a problem the other 99.5% would have many outages and slow load times. The .5% we suspend usually are the ones that even if they were on the server by them self they would still be crashing it. They are the ones that truly need dedicated servers.
Yeah I know how screwed up everything I just said is, but unfortunately this is the cut-throat marketplace that Hostgator is playing in. Take a look at our old hosting tips page written many years ago. Things have definitely changed since then. We’ve held out longer then any of the other larger hosts with offering these scam plans that I can think of, but in the end trying to educate potential customers has failed. It was either follow the trend to stay competitive or start shrinking as a company.
This is my plan for becoming so scummy…
Anyone we find crashing a server will be moved onto a server with only twenty accounts on it for the same monthly hosting price, instead of being suspended. Twenty customers will be paying us just shy of $200 a month on a server which at our cost has a $1,200 setup and about $250 a month leasing fee. You heard me… We are going to be giving abusers hosting below our cost. I’m not even factoring in merchant fees, support costs, or server administration time! If this isn’t good enough for the less then .5% of customers that crash our servers then there just isn’t any pleasing them.
I guarantee if HostGator starts sucking it’s not going to have anything to do with the crazy plans we are offering. Our new offering is no different then the last due to the TOS limiting the CPU and memory which is what truly affects performance. The reason most hosting companies start going downhill after a plan increase is a result from sales skyrocketing and the lack of man power to keep up with growth. If HostGator starts having this problem I’ll switch the site back to the old plans in a heartbeat. There’s no way I’m going to risk everything we built in exchange for a few more sales.
I could have lied as most hosting company blogs and CEO’s do by saying something along the lines of… “We are very excited that our growth has allowed us to negotiate better pricing which we are passing on to our customers in the form of larger plans.” HostGator is one of biggest hosting companies in the world so I know a statement like this is BS. I’m sure many of you will be upset with me writing this as the truth hurts, and I’m sure some of you would even prefer I lie to you, but really in the end honesty is the best way to go.
Posted in Brent Oxley, Gator Politics | 46 Comments »
46 Responses
to “Selling Out”
10 Trackback(s)
- Oct 6, 2007: It is time to make a comment : freeversing
- Oct 7, 2007: HostGator on Overselling - It is All Marketing | HostingFu
- Oct 20, 2007: HostGator Greatly Upgrades Plans - Becoming Sell Outs?
- Nov 27, 2007: Roundup of the best of low-cost webhosting solutions (and common honeytraps) | Tummblr
- Dec 8, 2007: Selling Out at The Eye
- Feb 22, 2008: Oversold? A Guide to Overselling in Web Hosting | Bestofthebestwebhosting.com
- Apr 18, 2008: DrakNet Web Hosting
- Aug 18, 2008: A look at web hosting companies | DoesWhat.com
- Oct 20, 2008: HostGator Blog | Gator Crossing » Blog Archive » All You Can Eat Hosting
- Feb 3, 2009: All You Can Eat Hosting | Genuine Web Space
By Yawn on Oct 6, 2007 | Reply
I truly find it sad that a company like HostGator could not find something to separate himself in an ever expending industry. Instead you treat your service based company like a commodity. Believe me this will NOT strengthen your business nor will it help your customers at all.
Yes you are a big host but instead of taking the less imaginative approach of increasing packages why not do something truly outstanding?
If you look at Amazon’s S3 service I am sure you would agree that they pushing the envelope on what hosting can be. Why are you not pusing that envelope?
I am sure you have a lot of great talent working for you. I suggest you pull on that talent and find something that will separate yourself in the industry.
I am sure you think you provide fast servers, great support at a competitive price but so does everyone else.
By Evgeny on Oct 6, 2007 | Reply
Thanks for you honesty Brent.
p.s. you surely needs to remove this line
from you webpage source:
this gives a bug when I try to subscribe via feed reader.
By Jean Boudreau on Oct 6, 2007 | Reply
Excellent explications Brent!
I still approve HG 110% with the new plans. We will continue to make business with you and support HG the same way they support us.
By Imran on Oct 6, 2007 | Reply
Brent, in addition to your updated bandwidth and space limits – you will sign up more clients if you start to offer other value added services like choice of billing software (whmcs, clientexec) and end-user support (even if you charge extra for it). Many people like me end up selecting other hosts who offer these add-on services, even though we want to sign-up with hostgator.
By zylack on Oct 6, 2007 | Reply
Imran makes a good point, I was going to go with another host just b/c they offered whmcs with the plan but then i read you’ll be offering it soon. I really hope so, cuase you guys are awesome. Thanks for ur honesty btw.
By brent oxley on Oct 6, 2007 | Reply
The extras is something we are always working on. We just worked out a deal with whmcs and will be offering it any day for free with any plan.
By Bruno on Oct 7, 2007 | Reply
Thank you for your explication Brent.
HG is an Excellent Web Hosting Company.
By Steve on Oct 7, 2007 | Reply
Hi Brent, thanks for your honesty. I like how you sound like a real person when you’re writing and not a company drone/robot just following a script.
By To bad on Oct 8, 2007 | Reply
No wonder you have so much “Free” space sitting their when you prevent anyone form even trying to use the space. Oh yeah you talked about resource limits and memory but never once did you talk about file limits of 50,000, which unless you upload illegal content like movies and tv shows, you never get close to using what you use to offer with the file limit.
By ghpk on Oct 8, 2007 | Reply
imran,
WHMCS is now free with hosting plans at hostgator too, thanks to our caring provider, Brent.
By Brent Oxley on Oct 8, 2007 | Reply
Yawn I agree with you to a degree which is why we are always working on adding features that would set us a part, but at the same time when it’s all said and done most people are simply going to look at how much disk space and bandwidth a plan comes with.
To bad we are updating this part of the tos because we don’t have an actual 50k inode limit. The inode part of the tos is for people who crash the server from 24/7 deleting and writing of 10k’s inodes at a time.
By BJ on Oct 9, 2007 | Reply
Very impressive. Thanks for telling it like it is. I just hope my service continues to be as good as it has been.
By Nikolay Blaskov on Oct 10, 2007 | Reply
Thumbs-up! The policy of truth is the best one around.
When I have asked the CEO of HostMySite, Web.com and CI Host on HostingCon 2006 in Las Vegas why the hosting companies are cheating the potential and the real clients with such unreal numbers in their packages, they have never answered anything valuable… I do not even remember their answers at this moment. Who cares…
It is good that someone from HostGator is brave to admit the truth. Congratulations for doing this!
We at ResellersPanel, being a small company compared to HostaGator have not changed our packages from almost a year from now and I guess we will not change them soon…
Our sales went down for a while, but now they are strongly recovering, still selling something that is more close to the reality. I hope this info can help you somehow in the future.
Why I am posting here?
1. Because Brent Oxley is the first guy from a big hosting company who is really honest in times when the meaning of the word HONESTY inside the hosting business is almost lost (from quite a long time ago).
2. Because the marketing managers of the biggest companies are lazy or out of ideas maybe. This is why they cannot think anything better than increasing the package numbers… Thanks to them, the marketing approach to the clients can be different and some small companies can make a break-through and join the party of the big ones (in matter of sales and quick services).
3. Nowadays popular hosting is far-far away of being intuitive and easy to use for the average Joe. There is so much to be done, that I am scared to share my thoughts with you on this topic here…
Sorry for the long tread folks.
We can make some kind of rebellion coalition for more honest hosting environment where we can compete and feel joy out of that…
Nikolay Blaskov
By Pedro on Oct 11, 2007 | Reply
I am very happy with Hostgator services and very pleased to hear about the new disk and bandwidth allowances, but I would like to raise a point, related to services in a broad sense. I am not sure if this is the right place to talk about this, but here I go: I have been working with HG for some years now and always seemed to me that communicaction policy from HG to custumers is weak. Forums are –in my opinion– not the right way to address company to customer relationship. For example, I never received an email message from customer support telling about server maintenances, server upgrading, hosting plans upgrading… just the Cpanel usual “out of disk space” ones.
Despite HG stresses the community aspect of his customer base, I can not aford to be checking forums every now and then, just to check if there are some news.
I learnt about the new improved hosting plans through RSS feed. Shouldn’t a customer to directly know about what is happening to their accounts / servers / plans directly from HG, instead of having to continuously check for news?
I really miss a more proactive HG-to-customer communication channel, like many other hosting companies do.
By goddess_dix on Oct 15, 2007 | Reply
I do appreciate the directness of communication, which is one of the reasons I am with HG.
I have mixed feelings about what essentially amounts to overselling, in the sense that it adds to client’s often unrealistic expectations of what a reasonable for hosting plans in the end consumer market. It doesn’t hurt the bigger hosting companies, but it does hurt the resellers on a shared server, in that they can’t compete except with value-added services. The arguement could be made that shared reselling is just a small area, but most dedicated clients are the ones that “graduate” from shared reselling accounts.
However, I do understand that bigger plans sell, so there it is. At the very least, it’s important to be honest about what you’re doing and why. And that I do appreicate.
By Mihai on Oct 16, 2007 | Reply
Dear Hostgator,I have recomanded you on my blog and to ther users.But please,cut it out with the overselling.I am sure no user can spend something near the band and disk space you’ve promised and that’s why you are makeing the plans bigger
By FUNKist on Oct 20, 2007 | Reply
Hi Brent, you were right, most people see figures with theirs stomach (as we used to say back home :-|) and don’t realise that they’re using about 10% of the figures offered. I was looking for a host with fair offer and mainly a very high uptime, and this is exactly what I found on HostGator. The service is one of the best on the worldwide hosting industry and I’m proud to be part of it.
Wish you all the best and thanks for keeping us UP.
By Curt Sampson on Oct 24, 2007 | Reply
Hey, if CPU usage is the main restriction on bandwidth, even for static sites, why not offer the option of using lighttpd instead of Apache for those sorts of sites? Or is your Apache so well tuned for those right now anyway that it would make little or no difference?
cjs@starling-software.com
By Jason on Oct 24, 2007 | Reply
Great work!!
Ignore the negative comments, honesty is the best way to work. The fact that you are not banning people who on any other server would be banned is a huge gift to some of us and if anyone on here that is bashing this choice or any of this blog thinks they can get the service and support and FREE goodies that HG supplies constantly, they need to do a lot more googling. My close friend hosts a design company with one of the 300gb sellers and just his out of pocket cost alone for a domain reseller account, reliable billing, and any customer service is blinding to me when i see how much i’ve spent in comparison using HG.
I thank you again as i try to do at each and every support ticket mailing :)
Great work
By patrick on Oct 30, 2007 | Reply
One word.. WEAK. but hey atleast you admit it.
By one19 on Oct 30, 2007 | Reply
I have been with HG for over 3 years now and I agree with Brent’s “selling out.” Although I only use 10% of my plan’s resources (reseller account), I’ve always had to tweak each account’s resources because overselling was disabled.
I trust that Brent is aware of his actions and will continue to provide us with the best uptime and reliability in the industry.
By PAontheweb on Nov 3, 2007 | Reply
Brent is one of the few guys I know that actually responds to these comments. We’ve chatted a few times on the phone and he’s a regular guy. Lighten up and enjoy his honesty.
We’ve built our business using his servers and with the same focus on service and honesty. Our companies will be here long after we’re gone. I’ll be pointing some people to this article for an example of honesty in hosting. Good job Brent.
By hussain on Nov 5, 2007 | Reply
i appreciate this honesty, and although technical guys should have figured out this already, i am sure it make more sense to lay people too now having stated 10% of the offer might not be reached and terms of resource abuse control their site suspension.
my question, how do you measure the abuse?
am not asking for a specific number or limit, just the way to decide when to suspend an account.
what tools do you use?
thanks
By 6pie on Nov 18, 2007 | Reply
Thanks for not pee***g in my face and trying to tell me it’s raining. I decided to open an account with you guys.
Thanks
That’s what all these corporate collage kid(Destroy my country) CEO’s are doing now.
By SWilson on Nov 20, 2007 | Reply
Just when I about made my mind up on a new host for a client, I come across this. You guys make it tough to make a decision.
I will say this though, from research on WHT, your forums, this blog and others your honesty is refreshing. Where my client is hosted presently? Honesty has resorted to deception and cover-up.
I’ll be calling your sales team once more to try to make up my mind.
By Jim on Nov 22, 2007 | Reply
Hi Brent and HG,
I love your service and support. I love your honesty too in this post.
Your companies support, server connections and uptime is the highest that I have ever seen, and I have used many providers until I came and stayed with you guys in the end.
So when some of the people out there bitch and say “oh another hosting company is providing more for less money”, they don’t realize that those other host providers suck.
By Jerome on Dec 10, 2007 | Reply
So basically you admit it is impossible to provide what you advertise (false advertising and deceptive business practices) and yet you justify it because everyone else does it.
If you’re so into being honest then why don’t you provide a link to this blog on all of your plans?
By kaeldaven on Dec 14, 2007 | Reply
I’m thrilled with Brent’s Honesty, I’d like to see another Host company, Oh btw we are screwing you. Hell, hostgator says, here’s the deal, here’s the numbers we are offering you, now… we will probably ban you before you come close to using this number but have fun trying and you know what, if you do use our resource, accpet this other service free of charge. You people are crazy, Hostgator’s TRUTH policy is amazing. I wish other companies would do this personally. Could you see Wal-Mart saying, hey… you know the reason why we are so much cheaper is because we screw all our employees and outsource as much labor as possible, but sleep easy at night, you are saving money, cause after all, we pass the savings on to you :)
By Andrew Stevens on Jan 15, 2008 | Reply
One of things i love most about Hostgator is their honesty. It is very rare indeed to find a host willing to say “You can have this but if you use too much resources then you are in trouble”.
One thing i would like to comment on is Brent’s quote; “At HostGator we put 200′ish customers per box”, it seems there are over 400 customers on the server im on BUT the server is still lightning fast with only 6 minutes downtime in the last year. That itself is quite incredible.
The fact that Brent himself cares enough about his customers to contact them personally whenever they have a problem says a great deal about the man behind HG.
Keep up the good work Brent, you really are the best ;-)
By Linda on Feb 13, 2008 | Reply
Brent and the rest at HG:
You guys are awesome!! I really like the honesty, it4 really is refreshing after being hosed by your competition for so many years.
I have had the issues over bandwidth with my former hosts. There were times when I needed to find out what the problem was when my bandwidth didn’t go over and my sites were unaccessible and could not reach anyone after 5p.m.
I have only had to contact support once and customer service once since changing hosts and I am really, really ecstatic with the lever of service I have received. Not only were people available to talk to me after “normal hours” but they were knowledgeable, courteous and prompt with the help.
I love the service so much I am in the process of moving over my reseller accounts from other hosts to put them here on HG servers under my new reseller account.
Just an FYI: I am NOT satisfied or placated easily. I am very picky about where I am going to spend my money to host my sites and my customers sites. I think I have finally found a good host I can work with for years to come. Thanks a million and one for the great service and honest information about how you will treat your customers.
By Joseph Becher on Jul 29, 2008 | Reply
Brent:
Thank you. I didn’t even know this blog existed until someone some linked to it in the INODE thread, a thread that a year and a half later people are still ranting on.
People HAVE to know that they are not getting unlimited space and bandwidth, anyone who thinks they are is an …
Thank you for your honestly in this post. It’s one of the many reasons I love HG and came back after trying others, because you do care and you do treat your customers with respect.
–Joe
By phototristan on Aug 25, 2008 | Reply
“if you do use our resource, accept this other service free of charge”
It’s not free of charge. If you have to get moved to a server with 20 people on it, Brent states in his post that you’d need to pay $200. per month.
By himagain on Oct 25, 2008 | Reply
Well, I don’t know if Brent will ever see this – (I just got here ) :-)
But I think it was brave. *I* think I will plug this company just for that alone.
HOWEVER:
Not sure if I read the point about what happens to over-users right!
Seems like a very good option to me….
Cheers!
I’ll link here as part of our education programme!
By LaptopFreak on Oct 25, 2008 | Reply
Nothing worth more than honesty.
By Andrew on Oct 28, 2008 | Reply
In response to:
“It’s not free of charge. If you have to get moved to a server with 20 people on it, Brent states in his post that you’d need to pay $200. per month.”
That’s what I though at first, but upon re-reading, it’s pretty clear that he’s saying HG only gets $200 total from those 20 people – so the people are still paying $10 a month EACH.
By Diego on Nov 18, 2009 | Reply
Ye ha! thanks by the bucket load from one chapped reader.