Recently OnApp CEO Ditlev Bredhal presented the cloud computing business model. However in this presentation he made many a startling statement. One of the biggest in terms of financial gain is that in order to setup a dedicated server it would cost say $2,500 but to set up the server for a cloud network it would cost $25,000. However, before you start to worry about the possible epic costing of hosting you will be pleased to know that in terms of overall revenue it will work out more profitable for businesses to use cloud when at capacity, meaning you should actually end up paying less for the hosting.

Furthermore it was stated that due to the nature of shared hosting it is necessary to oversell past the capacity to make fair profits and to utilise the server fully (which we knew). However, with the cloud network it is actually built to be under sold as the software and failovers need space to run correctly for the users.

In terms of what this means for businesses it means that those that can afford the setup costs will be able to supply a better and more reliable hosting than that of shared hosting providers at a lower cost. However, since profits are highly dependable on both price and large sets of customers you may find that you will be literally attacked with half price and below deals to pull in the needed users… but that’s a good thing right?

So if you have been avoiding cloud hosting because it’s something new and not so well known then think about looking into it a little bit more as it may be worth your time, besides hosting was new at one point and look how successful that been!