Cheap Web Hosting Overdrive!

My friend Mike was the king of Cheap Web hosting. About 5 years ago, during the boom years of the Internet, my best friend’s brother, Mike, opened a Web design and Web hosting company. We thought he was crazy, because Mike’s forte was sales, not Web design. Frankly, we thought
he was just following us into the realm of the tech industry because Mike was very competitive about everything.

In Mike’s first year he turned over more money than the three of us had made in our lifetime. He had so much business, he couldn’t find contractors to fulfill his deals. We stopped laughing and contracted to him. This allowed Mike to focus on selling cheap Web hosting
services. That was his downfall.

The Cheap Web Hosting Rainbow

At first, Mike had outsourced all of his hosting needs, but with the Web designing being handled by us, and since he was cash rich, he turned a downtown Milwaukee 2nd floor warehouse into a server farm. It was a lot of fun helping him set it up! It was even more fun walking
among the humming racks afterwards. There was a warehouse and computer smell intermixing in that space, and the light coming in from the street, cascading down across the technology, gave me a kind of warm, futuristic feeling.

I remember it well. It lacked that feeling of claustrophobia one gets inside a networking department at a big company. It represented a new and exciting age of freedom to me. Little did I know I was feeling the hype of the Internet boom.

Mike was the man. He provided free space to several non-profits and special causes. He added local businesses by the handful every day. Unlike today, Mike sold going from local business to local business.

Eventually, he had local competition. So Mike also out priced everyone by offering dirt cheap Web hosting.

He’d never even written a business plan, and he was riding the Internet rainbow….

Cheap Web Hosting - Over the Rainbow

Today, it is common knowledge that cheap Web hosts oversell their space. Back then, Mike’s competitive nature arrived at this conclusion naturally, as he analyzed his usage statistics. You might sell someone a package that provides them with 300MB of storage space, but only a
few will actually ever use even close to that amount!

Mike was able to pack 150-200% more clients onto each server than it would normally handle.(This is still a cheap Web host common practice! )

His brother and I started getting comments from our Web design clients. Their sites were bogging down with slow response times, and frequent down time. We mentioned this to Mike and lost access to the server farm space. From there on out it was war. We had no choice but to
quit subcontracting with Mike. Feeling for many of his customers, who we communicated with a lot more than Mr. Sales - who was constantly pursuing new business, rather than serving the business he had - we began migrating his largest clients to hosting services that could support
them.

Conclusion

In the wild west frontier of the still relatively new Internet, you may get swept up in doing business. But don’t make our mistake and do business just because you can. Be sure to check every business you associate with for a mature business plan and a code of ethics. You
can’t depend on there being people of good conscience in any business that will help you flee when they do!

Sometimes rushing for the pot of gold can land you somewhere OVER the rainbow! Maybe even way past….