In this blog, I am sharing a terrible experience I had after purchasing yearly VPS plan. I recently found that scores of VPS providers are selling unmanaged VPS plans at the price of shared hosting plans, sometimes cheaper than a quality shared hosting plan. The catch is all these providers ask you to pay up front for a year and their refund windows are 3-15 days. If you want to see the list of such providers, you can visit www.lowendbox.com. Some of the providers who sell at dirt cheap rate, like $8/year or $10/year, are woothosting, alpharacks and nfphosting. Every week, about 1-2 such providers will put their VPS plans on sell on www.lowendbox.com. VPS account at the price of shared hosting account will definitely grab eyeballs.
Now the questions are: can VPS plan be sold at such cheaper rate? If yes, how do the companies make money to survive?
The answer to first question is YES and it can be done by overcrowding the node, using the obsolete CPU for node, DDR2 RAM, and old HDDs. In case of shared hosting, 100s of accounts are created on the same machine to keep the price low. With litespeed webserver and SSD storage, the websites hosted on shared hosting server are able to perform decently. The same trick is applied to the cheap VPS accounts. The providers host 100s of VPS accounts on the same node to make those VPS plans cheap like shared hosting plans. But the problem lies in their refund policy. The typical DNS propagation time is 24-72 hours, so if the refund window is 3 days (the companies I have mentioned above have 3 days refund policy), it means you do not have even a minute to test your website after full propagation. After 3 days, if your server goes down or website becomes too slow, these providers are not going to help you and then the blame game starts. You will blame their node and they will blame your script for the poor performance. Your website may remain down for days – it’s true for even some well known companies like ssdnodes. Once refund window is over, you are put at the last position in their priority queue. If things do not improve, you will leave your cheap VPS and will migrate to a new host with a poor experience from cheap VPS plans.
I do not know the profit-making strategies of these providers, but the following is my personal assumption. Suppose 100 customers purchased $8/year VPS plan from a provider. The provider will host most of them on the same node, which means the provider earned $800 within a few days. As these VPS will definitely not work for any website, many customers will leave within 1-2 months (if website speed is their top priority) thinking $8 is not a big amount. Once old customers leave, these companies again put new customers on the same node without refunding even a penny to the old customers. Thus, in a year, these VPS companies can make huge money by selling junk to the customers.
I am also one of such customers who got attracted to these cheap plans and purchased cheap VPS from woothosting, alpharacks, and nfphosting. The VPS I got from these companies were useless and my website, where I have only static files, was taking 5-10 seconds to respond. Everyone knows if your webpage takes more than 0.2 seconds to respond, the search engines will kick your webpage out in no time. Even after raising numerous tickets, nothing changed and performance kept degrading day by day. Finally, I migrated my website to a new provider with monthly plan. I did not lose any money with nfphosting becuase alpharacks and woothosting had given me a good lesson. On the very second day, I found that my VPS at nfphosting’s node had server load more than 5, I did not take even a minute to cancel my account. But, I lost money with alpharacks because their server started misbehaving after 10 days. I am still with woothosing as I decided to host an obsolete website on their server. Anyway, I learnt a big lesson from these cheap offers and am not going to buy yearly plan even if it’s $0.00/year. Also, I am NEVER going to buy anything from woothosting, alpharacks, and nfphosting. Regarding alpharacks, you can google to know how bad this company is. For me, alpharacks is the biggest fraud hosting company I have ever known.
The conclusion is: the cheap VPS is just a trap to cheat customers, it does not work at all and you might have to buy a new VPS within 1-2 months. So, it’s always advisable to choose monthly plan if you are buying an unmanaged VPS.