How is it possible for some web hosts to offer dedicated servers with great technical specifications but at an amazingly cheap price? There are different ways this can be accomplished and the web host can sustain a business without going bankrupt. The first way is when the web host has a lot of revenue and lots of customer. The second way is the web host is trading something in return for offering dedicated servers at bargain prices.
Walmart type web hosts
The Walmart method is where the web host has such scale that they can afford to buy servers either used or new at lower prices than the competition. These web hosts have revenue in the millions per month. The web host can arrange financing for their equipment purchases, leases from suppliers, buying old servers, are using a lot of loans, and maybe using all the space their datacenter has available. The Walmart type web hosts can offer dedicated servers to virtual private servers at bargain prices because they have the financial firepower to do so. These web hosts have a lot of customers and have a lot of money.
Datacenter type web hosts with 1 or 2 providers
Another popular type of web host that can afford to price dedicated servers and virtual private servers at affordable prices, are web hosts that have their own datacenters that have 1 or 2 bandwidth providers. These web hosts are able to offer virtual private servers and dedicated servers at prices below most of the competition because the cost to operate their business is less. The servers being used maybe used or leased from another vendor. The cost to connect their datacenter to the internet would also cost less because they only have 1 or 2 bandwidth carriers. The bandwidth carriers used are not tier 1 like Level 3 or NTT. The bandwidth carriers would typically involve 1 real bandwidth carrier and a few local connections.