UK, the Euro, and web hosting price transparency
It’s a matter of two things I care about: web technology, and European Politics – particularly the Euro and what it means for price transparency. I was looking at the price of 1&1 Virtual Servers for a client I’m working for, and came across some startling data. 1&1 is Europe’s largest web hosting firm. It started out in Germany, and runs operations in France, the UK and other places too.
So how much should it be for a basic Virtual Server, Guaranteed RAM 128 MB, Burstable RAM (up to) 256 MB, Hard Disk Space 5GB, for a month?
- UK: £14.99 (€20.94) excl. VAT, £17.61 (€24.60) incl. VAT – with 60GB monthly transfer
- France: €9.99 excl. VAT, €11.95 incl. VAT – with 250GB monthly transfer
- Germany: €9.99 incl. VAT (I think – one one price quoted) – with 300GB monthly transfer
So what’s going on here? Same firm, very similar offers, and massively divergent prices between the UK and France and Germany. OK, paying your customer service people might be a bit more in the UK, but can’t 1&1 off-shore that to India anyway? Is it simply the assumption that customers will not try to make these international comparisons, made harder by the UK not being in the Eurozone?
And then there’s the bizarre web hosting market in Belgium where decent hosting prices seem non-existent, meaning you have to look to France, Germany or the UK anyway. But that’s a different story altogether.
Internet access and transfer is generally MUCH more expensive in the UK than in mainland Europe.
A comparison similar to yours could also be made for domestic broadband, and the results would be about the same. A friend of mine in Sweden apparently pays around €35 a month for 20/3 (20 Mbps downstream and 3 Mbps downstream) ADSL2+ with unlimited transfer (no cap or ‘fair use’ terms).
I don’t disagree with you on the Euro point and the property boom actually. But I do disagree on the location of web hosting issue: there’s nothing to stop 1&1 sticking those servers in Germany or France, and off-shoring their support for UK customers to India – something they can’t do for the German market as few people outside Germany speak German.
I normally resist, because we’re never going to agree, but I’d submit in this case that the big difference is caused by the cost of renting or buying office space for administrative functions, and other physical space for the equipment and technical staff.
Joining the Euro would, by forcing interest rates down, probably lead to a renewed property boom that made that situation worse, not better. It would no more cause prices to become equal than the sterling zone has made a pint of beer cost the same in Camden as in Crosby.
Though it would make it easier to host your stuff abroad if you didn’t mind the tiny extra lag.
Anyway, hope all’s well with you.