Look. This isn't all doom and gloom. Let me make it clear that I applaud some of these guys for coming to the market with a differentiated solution. That's what we need for some healthy competition. But if you look deeper, this cheap local hosting (or mass resold oversees hosting) isn't all it's cracked up to be.
First trick is the 200mb bandwidth cap - or at least some bandwidth cap on most of these cheap options. About 1000-1500 visitors a month is usually enough to kick your bandwidth over 200mb. This threshold can be considerably smaller if you're looking to host a blog - because the front page can be up to 5 times as large as a standard website (10+ posts on one page plus a preponderance of widgets!).
And then... the coup de grace.
What you're seeing above is called a PING test. The top window shows a ping to a "cheap hosting server", while the bottom window shows a ping to one of the servers in our rack at IS. Cough. Cough. Pat on back.
For those readers not completely up on the geek speak - a ping test is simply like shouting out to another server across the Internet - and seeing how quickly they shout back.
Cheap hosting HELOOO = 353 milliseconds.
Good local hosting HELOOO = 25 milliseconds.
MILLIseconds you say? Bah. Doesn't sound like much? BUT... if you're writing complex hosted apps or even simple Web 2.0 apps that do a lot of AJAX'ing (and other acronyms I would hate to get wrong) - you're doing THOUSANDS of shout-outs every session. So normalise it out - and your apps are running 11 times slower for local users if you host cheaply / oversees.
And yet, our bandwidth crises is so bad - most bloggers and startups are forced to host oversees anyway. Pity.
What are your PING rates looking like for your blog hosting? Drop us a comment. It's a PING OFF.
(Thanks to Brett, for actually having the nouse - great word, click for definition - to check when I accused him of paying too much for our server rack!).