HostGator Founder and CEO admitted “Unlimited” plans are just a marketing ploy – and they REALLY are

On the previous post we talked about how GoDaddy’s web hosting plans advertise as being “Unlimited disk space” and “Unlimited bandwidth” when clearly they are not.   So why does GoDaddy and other web hosting companies do it?  Marketing strategy, tactic, ploy, some would even call it unfair advertising, cheating, or a scam… whatever you want to call it, the end point is to attract more buyers, cinch the sale, and increase sales.  HostGator Founder and then CEO Brent Oxley was *kind of* straight forward about this web hosting company pr move for his company, back in 2008 when this “Unlimited” craze came to full swing.

…The “new” unlimited plan is the same plan we were offering a year ago, but now we label it as unlimited.

I wanted to call the plans unlimited last time around. However, due to staffing constraints, we wouldn’t have been able to keep up with the expected growth. A year later, we are finally OVERSTAFFED and ready to change the plan. Up until now, I’ve been slowing sales down on purpose in order for our support to catch up. If history repeats itself, renaming the plan from essentially unlimited to actually “unlimited” will increase our sales by at least 30%.

It’s really that simple.

We change an unlimited plan to say “unlimited” and bam — sales increase 30%, if not more. Many people will argue that “overselling” is evil and that it’s the cause of poor hosting service. This is not the case when it’s managed correctly and the proper staffing is in place. When a hosting company hops on the overselling bandwagon, their sales usually increase exponentially. Since very few companies actually have the capacity to handle a major surge in growth, their quality of service is almost guaranteed to deteriorate….
(via HostGator, All You Can Eat Hosting)

Oxely touched briefly on the fact that HostGator is offering the same plans and just labeling them differently, but his argument is that the plans have always actually been “unlimited”.  As he says, “We change an unlimited plan to say “unlimited” and bam — sales increase 30%, if not more.”.  But no, they REALLY aren’t unlimited, then or now.  The cartoon accompanying the blog post news release reveals the real truth behind web hosting “unlimited” plans a lot clearer…

You don’t find restaurants  advertising “ALL YOU CAN EAT BUFFET” with the restriction “YOU MUST BE THIS WIDE TO ENTER RESTAURANT”, with the sign showing about a size 0, or perhaps even smaller.  It sounds ridiculous but it is so true about how the unlimited web hosting plans really work.  Not sure why Oxley or the editors chose to have this cartoon accompany his article given that Oxley compares HostGator’s new unlimited plans to all you can eat web hosting.   It can be so easily inferred that this then means that yes, there ARE restrictions and limits in these “unlimited” plans.

In summary, you can’t have a large website – large in content or traffic – and host it on these so-called “unlimited” web hosting plans.  You have to be a small website, and not have such an appetite to eat up the server resources – or you are not welcome to an “unlimited” plan.  That’s actually the case with ALL “unlimited” web hosting plans.  How would they stay in business?  Or why would they even need to offer more than one plan, and why does their higher level and more expensive plans have limits on disk space and bandwidth?  The truth is that you don’t really get more of anything with the “unlimited” plans – and in fact you might even be getting less because of their fine print restrictions and limitations outlined in their web hosting agreements.  We are talking about hidden ways of limiting disk space by limiting database size and file number count, a.k.a inodes. And hidden ways of limiting bandwidth by using different wording to control the data transfer coming/going out of your website, and even limiting the amount of traffic/users your website is allowed to have at any given point of time.

HostGator inode limit explained on their Terms of Use agreement:

7b.) INODES 
The use of more than 250,000 inodes on any shared account may potentially result in a warning first, and if no action is taken future suspension. Accounts found to be exceeding the 100,000 inode limit will automatically be removed from our backup system to avoid over-usage, however databases will still be backed up. Every file (a webpage, image file, email, etc) on your account uses up 1 inode.

Sites that slightly exceed our inode limits are unlikely to be suspended; however, accounts that constantly create and delete large numbers of files on a regular basis, have hundreds of thousands of files, or cause file system damage may be flagged for review and/or suspension. The primary cause of excessive inodes seems to be due to users leaving their catchall address enabled, but never checking their primary account mailbox. Over time, tens of thousands of messages (or more) build up, eventually pushing the account past our inode limit. To disable your default mailbox, login to cPanel and choose “Mail”, then “Default Address”, “Set Default Address”, and then type in: :fail: No such user here.

In case the inode – or file count – limits aren’t sufficient, they include disk space restrictions on retaining an account that is backed up, file system and database:

7c.) Backup Limit 
Any shared account using more than 20 gigs of disk space will be removed from our off site weekly backup with the exception of Databases continuing to be backed up. All data will continue to be mirrored to a secondary drive which helps protect against data loss in the event of a drive failure.

HostGator next covers the bandwidth limit issue in their tos – it is obvious that bandwidth does matter and that there are not unlimited resources on servers available:

8.) Bandwidth Usage
You are allocated a monthly bandwidth allowance. This allowance varies depending on the hosting package you purchase. Should your account pass the allocated amount we reserve the right to suspend the account until the start of the next allocation, suspend the account until more bandwidth is purchased at an additional fee, suspend the account until you upgrade to a higher level of package, terminate the account and/or charge you an additional fee for the overages. Unused transfer in one month cannot be carried over to the next month.

Limited bandwidth means limited traffic, because the more visitors you get to your website, the more bandwidth your website will use.  You just don’t get the luxury of knowing what this bandwidth limit is for your unlimited bandwidth plan.  It is not even “Unmetered bandwidth” – they do meter it very closely, like other web hosting companies, bandwidth is money.  It is more like “Undisclosed bandwidth limits”.

Is HostGator a good host?  It can possibly be for you if you have a small website and don’t expect a lot of traffic.  You can choose your own web hosting when you use UltimateWB software, but you don’t have to choose an unlimited plan if you don’t want to, in order to save money.  Check out UltimateWB Web Hosting! Packages – you can get your own web hosting account starting at only a few dollars a month!