Originally Posted by KrisKross

No, it's not bandwith usage that matters. It's server resources that matter.

This is called overselling. The host crams tons of customers on to one server and hopes that not everyone will use what their package offers them.

I'll put this is really simple numbers. Say you're on a server with 99 other customers. Each customer is using 1% of the server's resources. A really popular site links to your 1KB homepage and suddenly, your traffic jumps from 1000 hits to 100K hits. Suddenly, your site is using 3% of the resources on the server. The server crashes. The host closes your account.

Hosting companies pay their bandwith providers somewhere between 10 and 25 cents per GB of bandwith (depending on quality of bandwith and volume purchased). How can they afford to give to 2100 GB for only $9.75 when it costs them at least $210 for that bandwith? And don't forget to factor in cost of hardware, rental fees, licenses, electricity, employees, etc.

There's a reason why a company like Phatservers only gives you 25 GB of bandwith on a shared account for $9.95/month.

If it sounds too good to be true, that's because it is.