The end of shared hosting?

I’ve received these days two offers for lifetime shared hosting and I realized that they were much cheaper than expected.

The first one was from the folks at cloudatcost.com who are already offering lifetime VPS/cloud plans and the pricing grid can be reviewed below:

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The second one is a newly launched service from lifetime.hosting and which has an introductory offer as follows:

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Now there’s a major difference between the two offers, but it’s worth considering that the specs are different too.

Cloudatcost.com are known for their no-SLA/no-guarantee policy when it comes to their lifetime cloud plans which are recommended for staging purposes only so I would not expect much of a guarantee on their lifetime webhosting plans either (despite having bought one of their lifetime cloud plans last year and realizing that it’s been pretty stable).

The second offer from lifetime.hosting landed in my inbox as an early bird $14.95 offer but as it turns out, that pricing was for their so called “bronze plan” which includes one website with 250MB of SSD hosting.

Obviously the second offer is worth much more than the 1st one simply because from the specs you realize that them folks got their act together because they offer Litespeed webserver (and this ain’t cheap) with SSD, Cloud Linux, RAID and hot-swap.

A lot of folks might say that it’s a bad business model which could get them bankrupt fast, but I say that it’s the future of shared hosting because when it comes to today’s resource usage needs the shared hosting starts to become irrelevant.

When shared hosting was introduced there was no WordPress or Joomla, there were some very light CMS scripts such as e107 or Mambo and the resource usage needs were very low. In fact back when shared hosting was truly a thing the vast majority of sites were built using plain HTML spiced with a little of JS and CSS. There was hardly any PHP in them either.

As years went by the technology evolved and the resource usage needs increased, but shared hosting remained at the very same level and with the very same limitations. Back in the good days you could host any site with more than 1000 daily uniques on shared hosting, nowadays there are sites that can’t even handle 500 uniques under a shared environment without having some of the functionality chopped.

Furthermore, with the years the shared hosting plans got cheaper and cheaper and companies are throwing such plans away like candy sometimes at less than $1/month. But it all comes with a hidden price and that’s the resource usage limitations. A lot of people still prefer to host their site on a shared environment instead of the cloud services simply because the shared environment comes bundled with support and easy to use control panels, while on cloud support is paid separately and has it’s costs.

Some companies have reinvented the notion of shared hosting and added the concept of “managed” to it making it much more attractive to folks that were not computer literate and needed assistance beyond the basic support level. This was and still is a great idea, but with the growing need for resources it may soon wear out as well.

So the next big thing will be focused on making the shared hosting what it used to be, a great place to store low profile, static websites while moving the dynamic ones over to the cloud which has started to be offered as managed cloud too.

I’m pretty sure a lot of people ask how could a company selling lifetime hosting plans could survive in today’s market and the answer is in their fine print. They are selling lifetime hosting only for sites that can comply with the limitations they impose. The age of unlimited shared hosting is coming to an end as well simply because it was virtually unlimited and technically limited. So by selling the real thing these providers will only attract the customers that are fit for their limitations.

In the case of lifetime.hosting with the right hardware their costs would never exceed $200/month (including software licensing) and they could cover one month’s costs with the payment of just four customers. A very powerful server could host up to 3000 websites within the requirements made by these lifetime hosting providers in their fine print. 3000 websites could roughly mean 1000 customers and divided by four that’s 250 months of covering costs which in theory breaks down to 20 years.

Clearly my estimate is a decent one, because the providers might just as well be overselling and could easily host the double on a server with the same specs which would saturate it’s resources pretty quick, but it would still represent big bucks for them. Bottom line is that getting 5 new customers per month means a very low profit margin, but it’s still a profit margin.

Lifetime shared hosting is for customers as attractive as the unlimited shared hosting once was. It may not last long, it may not end up as profitable as one thinks, but it’s a new trend, one that’s pushing the medium sized, dynamically generated websites towards the cloud.

P.S. I did my homework before writing this article, which is why I didn’t purchase any of the plans offered although I received introductory/early bird offers. Cloudatcost.com have a great pricing, but they will most likely oversell the hell out of those servers and tell you that you get what you pay for just like their do with their lifetime cloud plans. Lifetime.hosting have good pricing versus specs, but their IP traces back to Digitalfyre and their plan specifications match in full those of the reseller plans sold by Digitalfyre so they are not using their own hardware or their very own leased dedicated servers, but actually reselling existing services, but under a completely different approach. Doing this brings their costs down to 1/3 of my previous estimates and makes them less trustworthy.

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