I don't see why this is such a big deal.
You're attracted to an offer due to it's advertised resources. You may not need all of these resources today, but you may in the future. Either way, it is assumed that these resources exist and are yours to utilize so long as your usage falls within the TOS/AUP of the provider (not pounding on CPU, basically). Afterall, it was advertised that you'd receive access to X amount of resources for Y amount of money per month (or year, or whatever lured you in).
Different providers have different costs of operation yet they continue to compete on price. Those who own their hardware or make special deals with colocation providers are often much better suited to provide you what you actually pay for with reduced overselling and reduced costs. Those who are stuck renting servers and continue to compete based on price with those other companies who have a lower operating cost are doing it wrong. But they do it anyways and oversell to break even and then oversell more to make the venture worthwhile for them.
And what most of you fail to realize is the simple fact there are a ton of people who will not touch the lowend market. They see a $7/mo 1, 2, 3GB VPS and laugh. They understand value, and they're not strapped for cash. They feel that they'll get better service and quality paying $30/mo for a service some of you complain about if it is $8/mo. Whether the service is actually 'better' or not, that's debatable, but it gives businesses and other professionals peace of mind with the thoughts that they're spending decent money for a decent service from a provider they feel to be professional. It's like comparing a $25 pair of sneakers from Wal-Mart and a $100 pair of sneakers from anywhere else. Both keep your feet covered, both are comfortable, but some people would prefer the higher-end one due to thinking it's better quality.
In all honesty, if I were to start a new company I would stay far from the low end market as possible. I'd not cater to this market. I'd have prices deemed 'expensive' by most of you here and I'd much rather have half as many clients paying twice as much for their services as compared to the next guy. Easier to manage, easier to provide support for, resources that always exist for them and idle resources available in the event someone wants to upgrade so I don't have to shuffle them node to node to 'fit them in' somewhere.
You're attracted to an offer due to it's advertised resources. You may not need all of these resources today, but you may in the future. Either way, it is assumed that these resources exist and are yours to utilize so long as your usage falls within the TOS/AUP of the provider (not pounding on CPU, basically). Afterall, it was advertised that you'd receive access to X amount of resources for Y amount of money per month (or year, or whatever lured you in).
Different providers have different costs of operation yet they continue to compete on price. Those who own their hardware or make special deals with colocation providers are often much better suited to provide you what you actually pay for with reduced overselling and reduced costs. Those who are stuck renting servers and continue to compete based on price with those other companies who have a lower operating cost are doing it wrong. But they do it anyways and oversell to break even and then oversell more to make the venture worthwhile for them.
And what most of you fail to realize is the simple fact there are a ton of people who will not touch the lowend market. They see a $7/mo 1, 2, 3GB VPS and laugh. They understand value, and they're not strapped for cash. They feel that they'll get better service and quality paying $30/mo for a service some of you complain about if it is $8/mo. Whether the service is actually 'better' or not, that's debatable, but it gives businesses and other professionals peace of mind with the thoughts that they're spending decent money for a decent service from a provider they feel to be professional. It's like comparing a $25 pair of sneakers from Wal-Mart and a $100 pair of sneakers from anywhere else. Both keep your feet covered, both are comfortable, but some people would prefer the higher-end one due to thinking it's better quality.
In all honesty, if I were to start a new company I would stay far from the low end market as possible. I'd not cater to this market. I'd have prices deemed 'expensive' by most of you here and I'd much rather have half as many clients paying twice as much for their services as compared to the next guy. Easier to manage, easier to provide support for, resources that always exist for them and idle resources available in the event someone wants to upgrade so I don't have to shuffle them node to node to 'fit them in' somewhere.
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