Web Host Blog

Early last year, DreamHost made a mistake that cost them both financially during the refund process and from the loss of customers. Other web hosting companies would do well to learn from their mistake.

In January 2008, the genius in charge of DreamHost’s billing made a typo. This typo would lead to millions of dollars in extra charges. And while perhaps this could of not been foreseen, DreamHost would make some easily preventable blunders in the coming 24 hours for which they would have to apologize moreso than for the incident itself.

Perhaps it all stemmed from DreamHost’s mantra, which was to emulate a “casual” and personable work atmosphere and relate that to the customers to make them seem more friendly and accessible. As a part of this image, DreamHost would make jokes and have a more laid back attitude.

After the billing mistake, thousands of customers suffered hundreds of dollars in extra charges. When talking about the issue on their blog, DreamHost used a big picture of Homer Simpson with the words “Do’h”, and generally poking a bit of fun at the whole experience.

For thousands of DreamHost customers, this was no laughing matter. DreamHost management failed to foresee the barrage of negative comments that would ensue. Enraged customers often demanded apologies and had experienced problems related to the billing charges that a simple refund could not remedy.

Hundreds of customers did not have the money in their bank for an unpredicted billing charge. This would lead to overdraft charges that were not covered with the refund. Also, many customers who had their web hosting billed to credit cards would suffer the extra hundreds in charges, which would incur new debt, possibly at higher interest rates, which the refunds always cover the lowest interest rates first. Both of those situations lead to extra losses for thousands of their customers.

A simple brainstorming session after the event could of lead DreamHost management to foresee these types of immediate repercussions from the debacle to their customers. DreamHost’s “insensitive” response as some percieved it would have been avoided, and a more professional apology given, as was seen days later after the customer fury had fireballed. Competitor LunarPages even made overtures to DreamHost customers with a special discount for “DreamHost Refugees”. The whole event was a disaster, and a lesson that a laid back and personable environment in business should never lose touch with professional business planning or concerned customer service.

A good web host is might not be cheap. Yet the reverse may be true as well, an expensive web host might not be good. In the web hosting field especially, there seems to be little correlation between the price of the web host, and the quality. The only exception being supposedly “free” web hosting services which usually employ some underhanded advertising on your pages.

So how do you find a quality web host on a budget? You may be surprised, some of the best web hosting services, universally praised for their customer service and features, are among the cheapest as well. Companies such as Hostgator, DreamHost, and JustHost have reputable services that offer abundant web hosting features.

Going for a cheap host alone is not the way to save money. After all, signing up for a nefarious service that ends up with extra added fees or bad customer service may end up costing the customer. Good customer service is critical, and most of the time, web hosting prices are relatively comparable to each other.

Only once customers reach the dedicated hosting arena do prices start to have a tremendous impact on the decision process. As far as the consistently cheap go, 1&1 hosting leads the way. With over 7 million customers voting with their dollars, 1&1 is the most popular web host by that measure.

As far as customer service however, the internet’s opinions on 1&1 range from the lukewarm, the bad, and the ugly. Keeping in mind that if 1&1 displeases only 1% of their customers that means 70,000 angry ex-customers, it may be right to give them some slack. But other large web hosting services have quite the opposite reaction on the web.

That’s where Hostgator comes in. With a nearly universal praise of their services, Hostgator has taken the web by storm. Their CEO Brent Oxley has taken a very customer focused approach, paying customer service reps based on how well customers rate their responses, as well as personally intervening in special cases often times. Hostgator is quite reasonably priced as well, similar to 1&1, albeit perhaps a dollar or two more.

But the difference can be staggering, and can mean the difference between waiting an hour on the phone to talk to an outsourced customer service rep, as some suspect of 1&1 or other large hosts on occasion, or finding a genuinely informed and courteous support team with web hosts such as Hostgator, JustHost, or DreamHost.

More and more web hosting services are “going green”, so to speak. What is the secret behind this new trend? It may be darker than you know. In fact, it may have all been the idea of one company who intended to get paid handsome consulting fees with the promise to many web hosting services of providing a profitable “environmental” solution.

So what is this environmental solution, exactly? Most of it involves the web hosting company paying a form of tribute to their energy companies in the form of RECs, or “Renewable Energy Credits”. These credits can be purchase quite cheaply for any web host. A typical mid-sized web hosting company will generate millions in revenue, but the cost of the RECs for their servers is at most the same cost as say, buying a company car for the employees.

To keep it all in perspective, first Yahoo, which runs web hosting services, announced the move to become “carbon neutral”. In a bit of irony, within the article announcing that move, Yahoo linked to a website mentioning how carbon credits may be a scam on par with paying Papal “indulgences” to forgive sins, in the same way allowing polluters to pay for “carbon credits” to allow people to feel environmental while still polluting. All the while, the carbon credit companies themselves, run by opportunists such as Al Gore who could make billions off of the invisible carbon credits his company sells, look to make a profitable enterprise out of thin air.

The key word being profitable. So who is this profit-minded company that got the smaller web hosting companies to go “green”? Integrated Ecosystem Market Services.  In fact, this company is behind multiple web hosts “going green” such as the web hosting giants Hostgator, whom they wrote the entire article announcing the move to green for, as well as possibly DreamHost, who does not mention the specific company who proposed the switch for them, which seems most certainly to be Integrated Ecosystem Market Services. Even the logos that were designed for Hostgator and Dreamhost almost seem duplicate.

This IEMS’ stated mission is to “provide clients with comprehensive carbon solutions that yield high rates of return and global environmental benefits”. High rates of return? Pay close attention to that. How can it be profitable to go green? Because the tribute expected to claim “carbon neutrality” is tiny, while what is earned from marketing their businesses as “green” is a massive public image boost and subsequent sales boost.

ThinkHost is one of the up and coming web hosting services today. Being relatively obscure up until more recently, ThinkHost has been operating since 1999. What has lead ThinkHost to such an overwhelming growth rate?

Simple. Green Marketing. It’s the latest trend in Web Hosting, every web host from Hostgator to DreamHost has been “going green”. At the speed many web hosts are suddenly deciding to be environmentalists, one might even suspect that “going green” has simply become a smart business decision that leads to greater profits, rather than an attempt at a good deed.

Not so with ThinkHost. ThinkHost prides themselves on their stewardship of the environment, even going so far as to call their company “progressive”. ThinkHost donates to many other causes they believe to forward their same ideals.

ThinKHost even has a new marketing approach for their green web hosting service that other web hosts can’t compete with. ThinkHost claims to have no debts or shareholders to pay. The significance? First, while some other web hosting companies might have “gone green”, the “corporate fat cats” who fund those competitors are most often are not environmentally concerned. They may be running other companies that pollute, or they may simply not care. Other web hosting companies may have been decided to go green simply for a marketing edge and to boost their profits.

Not so with ThinkHost, the profits are divided among the employees or given to charitable organizations. To quote one of ThinkHost’s press releases directly, “Essentially, all of [ThinkHost's] profits are poured into social change work, rather than advertising or lavish perks”. ThinkHost claims to be a web hosting company which’s goal is not just to make a profit, but to make the world a better place.

To that end, ThinkHost goes further than any other web hosting company, rolling up their sleeves and getting involved in environmental and social issues. Aside from donating the majority of their profits into efforts for environmental and social change, the employees at ThinkHost themselves are expected to follow those same ideals. For example, for every customer who signs up with them, ThinkHost employees will personally plant a tree.

With such a bizarre marketing approach, rather a non-approach, can ThinkHost carve up a slice of the web hosting market? Only time will tell if letting their sincerity, hard work, and charity self-market itself can defeat the traditional marketing and business methods in the web hosting industry.

As the United States economy plunges into recession, many businesses across the country have been forced to scale back their operations. The web hosting industry for the most part has avoided the large-scale layoffs due to consistent growth. That may change for any number of reasons. Net Neutrality might be lost leading to many websites going out of business, or perhaps American clients will begin cutting back on their web hosting services as the economy takes a further turn for the worse.

At any rate, the economic downturn seems here to stay, and any competive web hosting serivce will have to make adjustments. It may no longer be prudent to keep only a domestic strategy for long term growth. Web Hosting is in an opportune position, in that expansion into foreign markets may be far easier than expected.

For example, Hostgator noticed that they were recieving a large portion of their customers from Brazil, so Hostgator developed a brazilian website with language support for that large customer base.

In order to make the most of the booming international market for web hosting during the american economic slump, it is key for web hosting providers to identify these trends before a competitor capitalizes on it. Checking the usage logs of a web host’s frontpage, it may in fact be quite simple to identify foreign countries that have a greater demand for hosting and possibly that company in particular appeals to that region. It is important to make sure whether it is a fluke or a consistent trend. Web hosting is one of the markets that is easier to expand internationally with. There are various consulting groups in many countries to consider discussing the issue with.

Another key area to focus on is currencies. It is important to observe whether the dollar is gaining strength or losing strength relative to foreign currencies in the markets the company would expand into. It may be important to peg the price to the dollar, during deflationary times such as the one the United States is in, and put the local currency rate in paranthesis next to it for convenience’s sake. The instability in foreign markets would make it a problem in the event that their local currency destabilizes or collapses. Should the global economy stabilize, and the dollar begin a march to inflation again, pegging it to a local currency in a high export country that is looking to make gains against the dollar may not be a bad idea and provide an extra increase in income. Should the dollar begin hyperinflating after any economic collapse or in the event the president should decide to prop up the multi-trillion dollar housing bubble, those foreign currencies would begin to look vastly more appealing.

The traditional American market for web hosting may not always last, and a diversified customer base can provide stability and help companies identify key areas for growth.

Hostgator has risen to become a behemoth among the web hosting giants. The different approach of CEO Brent Oxley to get hands on with his company has paid off extreme dividends. The positive spin on Hostgator on the internet is remarkable, and almost no other web hosting company enjoys such positive word of mouth and publicity on the internet.

In fact, if one travels the popular web hosting forums on the net, or searches for Hostgator complaints long enough, one will certainly discover this phenomenon. For every complaint, a dozen positive rebuttals ensue. In the event of a legitimate problem, Brent himself has often appeared on forums, and dealt with the situation in an above and beyond manner.

Brent also gets very personable on his blog. Not afraid to speak his mind, Brent will actually delve into serious issues, such as politics or the events of the day. Some clients warn him of being too human, claiming customers may leave if they disagree with him. Instead, it seems to have the opposite effect. It has humanized Brent in such a way that endears him to his customers. No other web hosting CEO is as visible or earned as much favor with customers as Mr. Oxley.

Overall the approach Brent has taken has earned him many fans, and few enemies. His genuinely concerned nature with the satisfaction of his customers is unmatched.

In an industry where customer service is everything, the Brent Oxley strategy, if it can be called anything other than a genuine concern for customers, is supremely effective. Hostgator is growing at such leaps and bounds that there is in Brent’s own words, perhaps little need at all for a marketing budget, as positive word of mouth is substantial. During these economic times, Mr. Oxley mentioned on his blog that Hostgator is growing too fast, and whereas everyone else is worried about getting jobs, Hostgator is in desperate need of workers!

In fact, in an even greater act of generousity, Mr. Oxley has a referral program offering a full $2,000 in commission to anyone who refers a systems administrator who then gets hired as an employee at Hostgator. To top it off, Mr. Oxley mentioned futher on the blog that up to $5,000 in relocation costs would be covered. The fact he mentioned his need for workers on his blog, and then went on to criticize welfare for those who could be working but are not, at such a critical time in our economy, stands miles apart from any counterparts in the industry.

It is hard enough to find any CEO of any large corporation who speaks their mind so visibly and is so accessible to his customers. This shows that Brent is a man who says what he means and stands for his own principles and values regardless of the business implications. In the business world, that is a rarity indeed. For Brent, it is a way of life, and it has lead to a prospering business.

There are certain times of year that web hosting simply seems to be more affordable. There are many questions if someone wants to buy web hosting. Who? Where? Why? Once a decision has been made on which web hosting service to go with, and which package to buy, perhaps “when?” is a question to also be asked.

For multiple reasons. Web hosting is usually recurringly billed, as most people don’t want their websites to go offline. If unable to find a great offer at the web host of choice, depending on the host, some may offer promotional offers at certain times of the year such as Christmas or New Year’s Day. Most web hosting companies were seen offering special discounts at that “special time of year”.

Another consideration is the economy. Most economic forecasters are predicting deflation. The reason this is relevant to even web hosting buyers is that in the event of deflation, the dollar becomes worth more. Consequentially, the average person has less dollars because of their increased value. This is because employers will either fire or cut the salaries of many people as they seek to cut the ever-rising costs of their employees’ salaries. Even if the number has stayed the same the value has not. In that situation, locking in at $10 a month may seem great now, but if deflation triples the value of the dollar, it would be the equivalent of locking at $30 a month.

On the reverse, if the President decides to launch an even greater ambitious spending plan than the current one to prop up the multi-trillion dollar housing bubble, hyper-inflation could occur, at which point locking in at a low price would be a prudent decision, as web hosts would raise prices to meet rising costs.

That alone may not be enough reason to hold off on purchasing web hosting. In the more likely event of deflation, web hosting companies may lower their prices. In the event that they do, be prepared to jump ship to another web host. If the web hosting company has been good, call up their customer service and ask for a price match so you can stay onboard.

In conclusion, the prices of web hosting services are very much affected by the times. When to buy can be a big question, but ultimately it should only be a small factor. By taking note of the seasonal deals offered by each web hosting service, and the inflationary or deflationary trends it is possible to find the best deals. This presumes that web hosting is a big expenditure such as it can be with dedicated hosting costing thousands a year. If purchasing shared hosting, the price differences are so insignificant that there is little reason to be so prudent when prices are already so low.

Many web hosting services offer similar features. Unlimited bandwidth, disk space, for the most part similar features. So how can anyone find the right web hosting service?

For advanced users, this is a more simple task if they have specific needs like Ruby on Rails, Fantastico, or some other desired feature. This helps limit it down to a fewer amount of web hosts. Other things to look out for, are how many FTP accounts each web host allows with their various packages, and what the limits on their MYSQL databases is, as far as number and size of the databases allowed.

For the average user on the other hand, the main thing will be customer service. Almost every web hosting service will claim to offer the top in class, and best service to their customers. It is unprofitable for them to suggest otherwise.

The key then for every potential customer is to hunt the web, finding web hosting forums, reviews, and any other indication of how good a web host may be. Keep in mind, however, that the largest web hosting services often have tens of thousands, if not millions of users. So even if only 1% of their users has an unpleasant experience, for a company such as 1&1 hosting, who has roughly 7 million users, that would mean 70,000 angry customers! On the internet, that 1% of 70,000 can kick up quite a storm.

So ultimately, it is important to review the quantity of complaints levied against each web hosting service, as well as the substance of the complaints. Praise on the other hand, should often be viewed suspiciously, as it can be from employees of the company or other underhanded methods. The larger web hosting forums may provide more honest opinions from a larger pool of users, but there are the occasional employees lurking around on the more popular places on the web, writing positive reviews, mentioning their service positively, or even tarnishing the competition’s name.

Sites with user-input reviews may be at special risk. Various web hosting services have been caught inputting positive reviews to their services on many of the larger consumer review sites. But the way they got caught was blatant, using their own companies IP addresses. If a more covert method, using proxies or doing it from home computers rather than computers at the office, were used, it may be almost impossible for those sites to differentiate between the two.

In conclusion, it’s best to gather evidence from various sources across the web, complaints, reviews, forums, and other methods to get a feel for how a web host is truly rated, and determine if they are the right web hosting service.

Price. Features. Customer service. Disk space. Bandwidth. There are many factors to consider with web hosting. Many of the web hosting services competitive efforts often make it hard to distinguish between them. Bandwidth and disk space are a prime example. As some web hosts began to offer ridiculous amounts of bandwidth or disk space, recognizing that the vast majority of shared hosting users will never use up that much. Not to lose out on this profitable proclamation, the other web hosting services would quickly follow suit and raise their bandwidth or disk space offers to beat out their competitor. Eventually the figures were reaching so high, they reached infinity.

Infinity being “unlimited”, as many hosts now claimed “unlimited” disk space and bandwidth, quickly followed by a note in their terms of service that gives them the right to cancel or otherwise deal with users who exceed a “reasonable” amount of usage. In many terms of service for various hosts who offer “unlimited” disk space or bandwidth, they claim it is unlimited until it causes disruptions of service for other users.

Such vagueness gives them the right to cancel users for even the smallest infractions. Charges have been levied against almost all “unlimited” web hosts for cancelling users they said were using too much. Too much of something supposedly unlimited. That means they indeed have limits. One voice of reason among the “unlimited” offerers seems to be Hostgator, who, has visible monitors for clients in their cPanels of how much bandwidth and processing they are using, and has it “recommend” that they stay under 25% usage of the server’s resources. However, upon reaching it, their staff does not take the approach of many other web hosts and just cancel the package, instead they try to negotiate and reason with the offending user. After all, it is a bit ridiculous to use half of a high-powered server for a mere ten dollars a month, and at that point if their business is not generating enough revenue to afford a dedicated server to manage the traffic, that business model would definitely not have the level of profitability to be sustainable in the long run.

In conclusion, this madness of the “unlimited” claims in the industry has led to many confusing situations. A few voices of reason can be heard, but for the most part, the web hosts who claim to offer such things have been caught up in “bandwidth wars” in the style of the price wars of old.

Switching web hosting services can be a long and troubling process. That is why it is critical to make sure to have the best possible web hosting service from the very beginning. But, mistakes can happen, and many web hosting services do not deliver on their promises, or simply deliver shoddy services that can cause any small business significant harm.

For example: downtime. Many companies promise 99% uptime and may even be keeping that promise, yet it might be fooling many. After all there are 365 days in a year, and 1% of that would be 3.6 days, or roughly 87 hours. That’s more than 7 hours a month of downtime, an average of an hour or two per week. That can really hurt the bottom line of a business. Worse yet, many of those companies  may deliver only 95% uptime, but if the majority of the downtime occurs in the early hours of the morning, many customers simply don’t notice.

Above all, customer service. If a web hosting service’s support lines take hours before anyone responds and the customer finds themselves talking to an outsourced staffer from overseas, there may be a significant problem with that company, and customers should jump ship in as orderly a fashion as possible. Response times are always a good indication of how concerned the company is with customers, though there are off days and the rare exceptions to that rule.

Next, features and the staff’s level of knowledge. These walk hand in hand. Many web hosting services offer “unlimited” disk space or bandwidth, only to punish those users who use a significant portion of resources. Other companies may not have desired features, or worse may have a staff unfamiliar or unable to provide true support on their own services. Depending on the company, the tech support may not be properly trained to handle the more advanced problems. In many cases they have a team that handles only the most basic of problems and forward on the big problems to their one or two knowledgeable employees to handle later on. This can make waiting times extremely long.

In conclusion, it is important to evaluate each web hosting service, and be prepared to cut ties if necessary. Above all, make sure to research complaints about each service and verify that it is easy to cut ties. Paying in smaller billing cycles also gives customers more freedom to cut ties, in the event a web hosting service does not offer a full refund, or in some cases does not even offer a prorated refund.