Here’s a bit of common sense that you’ve probably heard at least once or twice: You get what you pay for.

Sounds logical, doesn’t it? If you pay more, you’re bound to get more. The problem with common sense is that, though it’s certainly common by definition, it doesn’t always make good business sense.
In other words, paying less doesn’t always mean getting less, particularly when it comes to technologies like dedicated servers. So how can some dedicated server providers offer prices as low as $30 per month, while others charge two, or even three, times as much? To understand that, you need to understand economies of scale. Here’s a snippet from Econ 101.

Econ 101

A nationwide discount grocery chain buys its coffee and donuts by the ton. The mom-and-pop grocery store down the street purchases them by the pound. When it comes time to negotiate the price for these morning delicacies, the chain store since it buys so much coffee and so many donuts, is able to demand a lower price per unit and pass the savings on to its customers.
Customers, who always want to pay as little as possible, respond to those low prices and purchase more and more of their coffee and donuts from the discount chain, which, in turn, allows the chain to lower prices even further. And that, dear students, is an economy of scale.
Simply put, the big guys get all the breaks. If we replace “discount grocery chain?? with “dedicated server provider?? and “coffee and donuts?? with “bandwidth and hardware,?? we’ll begin to see where those $30 per month servers really come from.

No mystery here…

Dedicated server providers take advantage of economies of scale when they buy bandwidth in large blocks. They take advantage of it when they scoop up loads of powerful hardware in big batches. As the provider grows, it can afford to hire the best and brightest staff to maintain and support its servers, which leads to stellar uptime – as much as 99.999% in the best cases.
This, of course, creates greater and greater satisfaction among the dedicated server provider’s customers, and, as word spreads, more and more customers in total. As the roster of happy clients grows, the provider can afford to drop its prices even lower.
So how can the low-cost dedicated server providers offer powerful hardware, superior support and near-perfect uptime for less than the price of a daily coffee and donut, you ask?
It’s really just common sense.

ServerPronto offers affordable and secure dedicated servers and cloud hosting service packages.

Comments are closed.