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This past summer SquareSpace got $38 million in second round financing. Recently they unveiled new plans which include unlimited storage and bandwidth. Apparently they are using the bandwidth and storage as a loss leader in order to attract new business. My guess is that the majority of websites they host use relatively low amounts of disk space and traffic which would offset the usage of large high-traffic sites. And if their storage and bandwidth costs exceed revenues, they can just dip into their $38 million sitting in the bank.

I wonder how wise it would be for smaller web hosts without similar funding to offer plans with unlimited bandwidth and storage. Probably not very wise.

As consumers come to expect unlimited storage and bandwidth, heavily financed web hosts will squeeze smaller hosts out of the market unless they bundle their service with unique features not found elsewhere.

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Read the AUP. "Unlimited" will be rarely, if ever, truly unlimited. Bandwidth may be unlimited, but traffic will be limited (or vice versa), but rarely, if ever, it will be both bandwdith (Mb/s) and traffic (GB/m) both unlimited. For disk space, there are likely provisions in the AUP also to shut down or restrict disk space usage for clients who use it for "improper" purposes, or otherwise there is surely a way to shut down clients who use excessive space under other pretenses.

So has been always the case in the industry. It is only unlimited as long as you don't use too much. Unlimited, but only "within reasonable bounds."

Just because there is a lot of others' money to burn doesn't mean that there is no accountability and that it can be all squandered - you can bet that the investors would not take kindly to that.

If this was really truly so, then Google (and other such big, data and traffic heavy sites) would shut down all its data centres and operations and simply move google.com, gmail.com, and all of its sites to this unlimited bandwidth and storage plan. But, they won't. Why not? The answer is in the AUP. There are limits to unlimited. There always are.
Sadly you don't even have to dig into the AUP to find that "Unlimited" isn't exactly Unlimited:

"Squarespace's Advanced and Business packages do not have resource limits for normal usage. As per our Terms of Service, sites can not exist for the sole purpose of file sharing. Further, files uploaded to Squarespace can currently be a maximum of 20MB in size."
(emphasis mine)

Try and identify what "normal usage" classifies as. Then imagine being slashdotted and finding SquareSpace takes your site down because thats not "Normal Usage" :)

That said with the kind of hosting environment SquareSpace is providing the storage isn't that big a deal for joe average business as to the best of my knowledge that database usage is free (SquareSpace is one large fancy CMS/Blog), and with no e-mail hosting there either you're essentially talking any media files you wish to host, PDFs etc. 20Mb file limit should be good for most purposes except video with which you might as well host from Youtube / Vimeo and embed anyway.
I think that customers will be a bit turned off with these types of bait and switch tactics. In the end, you really do get what you pay for.
How do these web hosting companies do it? I found another one. JaguarPC offers unlimited storage and bandwidth for $10 per month.

Regarding the stipulations for use, I think that prohibiting usage of their storage for remote file sharing or limiting the size of individual files is perfectly legitimate for a web host, especially one based around a site builder and doesn't also offer FTP and email. I don't see it as a bait-and-switch tactic; unless they decide one year later to limit storage and bandwidth after all. In any case, it's a wait-and-see game now as to whether customer service or bandwidth speed can be maintained over the long run.


Truman Leung said:
Regarding the stipulations for use, I think that prohibiting usage of their storage for remote file sharing or limiting the size of individual files is perfectly legitimate for a web host, especially one based around a site builder and doesn't also offer FTP and email. I don't see it as a bait-and-switch tactic; unless they decide one year later to limit storage and bandwidth after all. In any case, it's a wait-and-see game now as to whether customer service or bandwidth speed can be maintained over the long run.

I agree on the file sharing etc. stuff, but I have to take umbrage with vague wording "for normal usage".
Define normal usage for me? I can define what I perceive normal usage to be and I'll be willing to bet it's different to what you would define it as, purely based on our different experiences in and out of the hosting world. That difference could be what a user would see as "bait and switch". So I take up their service with my expectation of normal and find a few months later that it doesn't match theirs and its a question of cough up or go elsewhere.

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