Fun with Math at GoDaddy

I was the fastest adder of numbers in my third grade class in Taipei. There's a plaque in my mother's attic that says so. Back then, 15 < 109. But now? That's not always the case any more.

Have you seen GoDaddy's shared hosting prices? $15/month gets you 200 GB of storage with a 2000 GB data transfer limit. Not to mention a free .info domain. On the other hand, a $109 dedicated server includes only a 120 GB hard drive and 500 GB of bandwidth. Plus that .info domain costs $1.99 extra.

It's not easy being GoDaddy. Or any other shared hosting provider, for that matter. A list of 93 online storage companies made it to the front page of Digg today; many offer free service. TechCrunch notes that XDrive, in particular, is giving AOL/AIM members 5GB of storage at no cost. Photobucket continues to sign up 65,000 users per day. And Netcraft's latest web server survey shows that Microsoft's Windows Live Spaces and Google's Blogger together added 1.4 million new accounts in July. There's also Ning, where you can clone all sorts of nifty apps in under 30 seconds - and host it for free.

Of course, many users would rather pay $15 for GoDaddy's 2000 GB bandwidth offer than $0 for any of the above. The bad news is, such customers could cost GoDaddy a great deal more than their monthly fee. And they'd have no upgrade path. It'd be tough to sell them on a 7x cost increase for 25% of their data transfer limit and 60% of their current storage space.

Matt Bross, British Telecom's CTO, said in a Business 2.0 interview that it's a software world; we've got stop thinking hardware. The folks at GoDaddy should listen to the guy. There's got to be better hosting strategies than keeping their fingers crossed that customers won't actually need all that oversold capacity.

Comments

[Jason Gulledge]

Google (mail) and Yahoo (mail) do it as well. At least with those tow companies, they've hopefully done the math and ran the statistical analysis to determine the average amount of space a user consumes, and used standard deviation to determine how much their results might fluctuate.

[Isabel Wang]

I'm wondering if Google/Yahoo/others might be better off giving away <5GB than GoDaddy is selling 200GB for $15? Curiously, if you bought any kind of functional hosting (podcast, blog, website template) from GoDaddy, the amount of storage space you get goes waaaay down (1GB, 300MB and 50MB, respective). In other words, the 200 GB offer seems to be specifically aimed at those who need the super-sized capacity. In which case, wouldn't they be more likely to have higher usage?

[heynorton]

I'm confused as to your point here. I know this is an OLD article, but a shared hosting account versus a dedicated server are not even close comparisons, so your point is moot. Yes, you get more bandwidth out of a shared hosting plan. But an all you can eat $5 buffet, and a $60 filet mignon aren't the same thing.