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May 11th, 2012
Tanya said that it costs $60 per month to operate the server for the site. There are hosting services that charge double that for an entire year. Have you considered a less expensive option?
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May 13th, 2012
TL;DR: That type of hosting is not suitable for what we need, which is why we're paying considerably more.
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May 14th, 2012
That type of hosting gives you access to a web server and a database server. It's good for people who have a low traffic website that doesn't get a lot of interaction and need for server side scripting. We have our own server which costs more. It's possible that we might be allowed to operate on a web hosting platform, but I believe that the site would be slow and unreliable. Web hosts will kick you off and then try to upsell you once your site starts getting too much traffic or too much database storage.
One of the problems with web hosting is all of your scripts are public on the web, which is a problem if you need anything to be private. I use a lot of scripts that contain sensitive information that simplify the process of running the site. Some web hosts also don't offer command line access, which is necessary for certain tasks.
With web hosting, you're also stuck with whatever server software the host feels like installing. If an application or library isn't installed, then your options for your website are limited because you can't install software yourself.
It's a bit of an odd topic for a thread but I hope that clears things up because I realize it might seem weird if you don't understand web hosting but see extremely cheap hosting and expensive plans.
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May 14th, 2012
So is the massive increase in cost related to performance or simply having your own server? How much harder is it to operate your own server?
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May 15th, 2012
The short explanation is that cheap "web hosting" has fairly poor performance because you're sharing resources with dozens of other sites. As they name suggests, you can only have "web" sites. If you need a service that's not a website, you're out of luck.
Running a server from a virtual machine isn't all that hard depending on how you configure it. There's a few security enhancements you'll want to do. You'll need to update software, but that can be done easily by installing as much as you can through packages and honestly the hardest part of that applies to web hosting since website software and scripts generally aren't installed through packages.