I have recently been in the position to "rescue" a couple of people from poor hosting, i'm not bragging here or anything - the fault lies as much with the clients as the previous host...

Cheap hosting has it's place on today's internet - I do not however agree with it or condone it as I think it's just an excuse to offer a sub-standard service to people.

In order to understand why some host's are so cheap and others (like ourselves) are not, you need to understand how prices are worked out and a host's profit margins...

The majority of webhost's (but not all) own their own servers - most of the time however they will NOT own the datacenter that houses these servers, this is for 2 reasons... One is that most hosting companies are not big enough to fund the building or a multi million pound facility and secondly those companies that do own datacenter's are not interested in becoming webhosts.

So let's take some examples, we will call the cheap webhost "Company A" and the expensive one (like us) "Company B". Both company A and company B pay the same amount for a mid range dedicated server, they pay monthly to their upstream provider which covers the rent of the server, the bandwidth, the electricity and other asociated costs... We will call this figure for arguements sake £100 / Month

We then have to take into account the host's other costs which may (or may not) include - software licences, general office costs (heating, lighting, internet access etc) the list goes on and on, so the actual cost price of a server probably exceeds £200 / month.

So... Company A sells hosting accounts for £2 / Month - WOW that's a great deal you think, but if you step back a second you will realise that this company has to put 100 accounts on this single server just to break even! They then need to make a profit, so depending on how much profit the company wants to make on a single server they could actually be putting over 200 accounts on this single mid-range server.

 Company B on the other hand sells accounts for £10 per month - this means that they only have to put 20 accounts on the server to break even and 40 accounts on it to make the same profit as company A.

Now do you see how much better off company B is? By not trying to compete with these budget hosting companies they can offer a fast and reliable service... a mid range server will be able to handle 40 website's no problems but 200 (especially with more and more database powered scripts being used) is pushing the server way past what it was designed to handle.