Searching the Internet returns a long list of cheap budget host providers, all offering hosting plans with prices ranging from free to under ten dollars a month.

The two most noticeable features of these plans are the large amounts of storage space and data transfer included in each plan. Consequently, these three items, price, storage and data transfer, then become the criteria the novice buyer uses to evaluate the various hosting plans; and they usually select the plan that provides the most storage and data transfer for the least amount of money.

What the novice buyer fails to realize is that there is another list of criteria that have far more impact on the true value of these hosting plans. These criteria are kept hidden deep inside these companies "Terms of Service (TOS)" and/or "Abuse of Service (AOS)" policies that greatly restrict how the storage and data transfer may be used, and greatly diminishing the value of the services offered at the budget price.

So what might the first-time buyer find if they were to search for and read the TOS or AOS? The two biggest restrictions usually imposed on these budget plans are the amount of computer processor time your site can use and the number of connections that can be made to your web site at the same time.

The processor or CPU time is basically the amount of time applications running on your site use on the server. Most people have observed on their own personal computers that the more programs opened cause the computer to run more slowly with each open program. Each program is calling on a portion of the CPU's processing power, which is a finite resource. Consequently, too many programs running at the same time can slow down performance and even bring the computer (server) to a total halt.

The number of simultaneous connections (or the number of people viewing your web site at the same time) goes hand in hand with CPU usage. Each page viewed by a single user causes a number of connections to occur--each image viewed is a separate connection, if the page is linked to a database, then each piece of data or information pulled from the database and displayed on the page creates a new connection. Consequently, it does not take a site very long to exceed the connection limits imposed by budget hosting companies with only a few people viewing the site at the same time.

Let's think of the hosting server as a pie with the main ingredients being the CPU processing time, the amount of connections, the space for files on the server, and the bandwidth to view the pages on the Internet. Each web site that is hosted on the server is like a piece of the pie. So, say the pie is cut into 10 pieces, each piece would represent 10% of the server's resources (Hard Drive Storage, Memory, Bandwidth, etc.). With today's technology the pie can be divided into even smaller pieces and not have the performance noticeably effected even if all of the sites are being accessed at the same time. But budget hosting companies divide the pie into over 5,000 pieces. Consequently, if even 10% of the sites are accessed at the same time, service is degraded. And using the pie analogy, it is easy to see that no pie can be cut into 5,000 pieces and have any one piece be big enough for anyone--so what they are really doing is selling the same 8 or 10 pieces of the pie they have to 5,000 people over and over again, hoping that not more than 8 or 10 people will want a piece of the available pie at the same time. This practice is referred to as "overselling".

In short, cheap hosting companies over-sell their services expecting you to use very little of what they offer and suspend your account when you do.

The same hidden restrictions hold true for email accounts, but in a slightly different way. Many of these plans offer 100 or more (some unlimited) email accounts. Sounds like more than any small business would ever need. Let's consider what the average person expects from their email account: The first and most important expectation is that they can send email to whoever they want. Most all providers will meet this criteria. The second is that they want to send copies of an email to a group of people, whether it be family members, a company mailing list, etc. The third expectation is to be able to send attachments with their email, whether it be family pictures, documents zip files, etc.

Budget hosting accounts almost always fall short on the second and third expectation. Most budget hosting companies limit the number of people a single email can be sent to, usually under 20 people per email. Not good if you have to send an email announcement to a large client list or you have more than 20 family members or friends on your contact list.

Should you have several pictures you want to send in your email, or any other large file, in most cases you will find your emails blocked because the attachment size has exceeded the limits of the service they provide.

Additionally, email is the most frequently used portion of a hosting plan; and it also tends to be the most support intensive. The budget for support for these companies is so limited that they barely give acceptable support to web related questions. Consequently there is a growing trend to encourage their clients to use a free email service rather than use the email service provided in their budget plan.

One of the worst effects stemming from these ultra-cheap hosting packages is that they influence non-technically educated customers general perception about hosting and make them believe, erroneously, that the cost of hosting a web site should be cheap, very cheap and very-very cheap.

This skewed perception of what the real costs are in the hosting industry serves to make dedicated and semi-dedicated servers seem very expensive when that is not the case at all. The fact is that most sites using hundreds of Gigabytes of monthly data transfer belong on a dedicated server. However, it has come to the point where a $10 shared hosting package can come with say 10GB of disk space and 1TB of data transfer and this can easily make even a cheap $100/month dedicated server with an ~80GB disk and ~1TB data transfer allowance, look like a rip off; when in fact, it is closer to the actual cost of providing professional hosting services to business clients. 

Finally, once you discover the level of service with whatever company you might have selected, the process of moving away from such a host will be a manual and tedious endeavor. This will probably make you think twice when it comes to moving out of such a host which might make you stick with them (at least for a while) despite being less than satisfied with the service.