(Why) hosting cost more in China
Many things are cheap in China unfortunately web hosting is not one of them.
I not saying this so that we can get our customer to pay more. (And we will never do that, ever.)
Before we became a hosting company in China ourselves, we tried to find hosting with rock-bottom price like those American hosters (for like $5 a month, unlimited everything!). After talking to people and understanding the market, we learnt that the are factors with make cheap hosting very unlikely.
On critical factor is IP scarcity (more on this topic another time). Economic 101, scarcity increase, demand increase, price increase. There are just too few IP to go around. I recall a source mentioning the whole of China has as many IP address allocated as Stanford University.
Monopoly of infrastructure. Again Econ 101, monopoly or oligopoly props up prices. Datacenters, backbones are owned by a few powerful players. There isn’t any real competition to drive down price or push up service level.
Finally, surprise, surprise, server hardwares are not cheaper (and often more expensive) in China. For example, check out Dell’s price for the PowerEdge 860 in US and in China.
So with a high base cost, the price can only go so low. As price goes lower, service and reliability suffered.
Our journey to drive down cost and improve reliability for our own hosting usage led to the decision to set up a new hosting company and share our effort with customers.
As we grow, we are committed to find innovatives way to push the standard and value of hosting services.
2 comments March 2nd, 2007