Australian or USA Hosting?

The Overselling business model
October 3, 2009

The faster your webpage loads the happier your viewers will be. There are 2 factors here: 1) The viewers internet speed – This factor is out of your control 2) The Hosting Companies Bandwidth and Server speed –

This factor you can control by choosing a hosting company with the fastest speeds available. Have you ever looked at the same video on 2 different websites and found 1 of them loaded much slower than the other? This is because the bandwidth speed was lower with the slower server. So if you have a website that will have photos, images or videos or other speed intensive items then it’s important to find a hosting company with high bandwidth speeds. If most of your viewers will be from Australia then choose a fast Australian hosting company, but be prepared to pay for it.

When in Australia your internet can access Australian hosting servers slightly faster. For many the difference is barely noticeable as we are talking about fractions of a second, but it can be annoying to have a website load too slowly. The cause may well be attributed to the site being hosted in another country, however well designed and optimized websites (without excessive pictures, videos etc) will often often be the major bottleneck.

There are a few things to take into consideration when choosing a website host.


I consider this more important than price. The service difference can be huge. If something goes wrong with your site you need to be able to contact your hosting company quickly and get it remedied fast. Things will go down from time to time as this is a fact of life. Your hosting company needs to treat downtime as a priority ahead of sales.

Disk Space

As a general rule, a single website page should not be more than about 100KB, including all images. Remember that most people who visit your site will be using a modem to connect to the Internet and if your pages take too long to load, they will simply leave and go to another site. Whilst there are, obviously, exceptions for sites aimed specifically at broadband users, most web sites do not fit into this niche category.

Working with 100KB as guide, a 10-page website would require approximately 1MB of disk space.

The cost of disk space does not vary on where your site is hosted. This is because hosting hardware costs are fairly similar around the world. Watch out for hosting providers that do not specify this and may charge you per web page. On the other hand, watch out for providers who offer unlimited disk space. They usually have acceptable usage policies that over-ride this, i.e if you use more disk space that is considered reasonable (whatever that is) your account will get suspended or terminated.


In the most simple of terms an analogy using water flowing through pipes gives the easiest explanation of bandwidth, the wider the pipes (i.e. higher bandwidth) the more water can be moved per second (or data).

So Bandwidth is the amount of data passage per second and is generally measured in Gbps (Gigabits per second).

It is easy to confuse bandwidth, i.e. the speed of your connection with data allowance, which is the amount of data that can be transferred to and from your server or web site per month and is measured in Gb. Most web hosts actually incorrectly use the term bandwidth in place of data transfer allowance, and it is important when choosing a web host, or a web hosting plan that you have a rough idea of the amount data transfer you will require.

Put simply each time somebody looks at a page from your site they download that page from your server, using up some of your data transfer allowance, if your average page size is 100kb and each of your 100 visitors a day looks at say 4 pages then per day you are using 40Mb which equates to a data transfer of 1.2Gb per month. Unfortunately customers visiting your site are not the only ones to use up your data transfer, sending and receiving email, uploading new pages to your server, and believe it or not GoogleBot, MSN Bot and the Yahoo! Robot to name but a few of the countless spiders out there, all use up a portion of your data transfer depending on how many of your pages they spider. In-fact the various web spiders out there can use up a significant amount of your data transfer especially when it is in it’s infancy as they attempt to categorise it for production in organic search results sometimes spidering your web site up to 10 times a day. It is possible to tell these spiders not to crawl your site, not to crawl specific pages or not to follow specific links but that is beyond the scope of this discussion, and generally they are your friends because it is these spiders which will get you listed in the major search engines and ultimately drive customers to your site.

For really cheap hosting providers the trick of the trade here is called Over Selling. Think of it like providing a 1 inch thick water pipe to a small number of people in a town, lets say 10 people. Through this 1 inch thick water pipe a maximum flow 1 litre per second is possible determined by the bandwidth. When only 10 people are connected to your water pipe the water will be flowing fast most of the time. When you then sell this to another 100 people, imagine what happens during the morning shower rush. They get some water, but it will be flowing very slowly.

The same analogy can be used for ADSL in Australia. You may order an 1.5MB ADSL line from Telstra. Telstra describes this 1.5Mb ADSL as super fast, while the rest of the developed world uses around 24MB. Yet even on this super fast 1.5M ADSL you will get nowhere near this speed 99% of the time because they put many subscribers on the same circuit, known as overselling.

Bandwidth costs money for providers. And in Australia Bandwidth costs over 20 times more compared to USA. We largely have our monolpoly telecommunications provider Telstra to thank for this. Despite their huge profits, the investment in the network bandwidth has been minimal. The wholesale costs have beed steady over the last 10 years, while in the USA they fall substantially year on year.

This forces many hosting providers to limit bandwidth and data allowances.

The lower your Bandwidth provided by your web hosting provider, the slower your site will download to users’ computers, irrespective of how fast their internet connections are or whether they have their site hosted in Australia or USA. If multiple users are accessing your site at once, they may find that they experience extremely slow, or no, connectivity.

Data Allowance

Again a popular misconception among many people, as well as web hosting providers, is that bandwidth and data transfer are the same. This is probably because they are very closely linked, but for anyone who is subscribed to a web hosting service, knowing the difference can save both time and money.

Put simply, bandwidth is the quantity of data that can be transferred from a website at any one time, while data transfer is the amount transferred over a period of time. This is where the water and pipes come in. A pipe would be bandwidth—the bigger the pipe, the more water could pass through. However, data transfer would be the amount of water in the pipe in a month, for example. Essentially, data transfer is the use of bandwidth.

Data transfer allowances control how much data can be transferred from your site over a certain time. For example, a web hosting provider may impose a limit of 2 gigabytes of data per month. If your website exceeds this, it may be taken offline until the next month.

For customers who really want to make use of the Internet this allowance can dramatically increase.
In particular emails where the trend is for people to rely on email more and more including file attachments and on-line document storage.

Unfortunatelly Australia is way behind in this area. The value for money in USA in this area is in the order of 20 to 30 fold. If you want your site hosted in Australia be prepared to have very little Data Allowance, often less than 10GB.

In my opinion this overriding factor makes the choice to host in USA very simple based on value for money.


It is important not to have to pay twice the going rate for the same disk space, speed and data allowance.
Choosing between a company offering $5.95 AUD per month for slower service, slower download speeds and loaded servers… or $19.95 AUD per month for faster service, fastest available download speeds and optimized servers and good software ?

In my opinion, you should host in Australia if value for money or budget is not a concern.

Tony Sirico
Tony Sirico
Tony has been developing software since 1980 in many programming languages. Today he focuses on Internet Security and Linux based operating systems. He is a LAMP (Linux, Apache, MySQL and PHP) and Hosting expert.


  1. Bandwidth costs money for providers. And in Australia Bandwidth costs over 20 times more compared to USA. We largely have our monolpoly telecommunications provider Telstra to thank for this. Despite their huge profits, the investment in the network bandwidth has been minimal. The wholesale costs have beed steady over the last 10 years, while in the USA they fall substantially year on year.

  2. From a user point of view the website should be hosted in the same country where maximum of your users are based. It really plays an important role in the website’s speed. In case you are short of funds initially go in for a out of country hosting if it is cost effective and once the money starts raking in shift to the hosting that will be more beneficial for your business.

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