A small business feels the need to go online as a marketing effort or to enter into e-commerce because customers have gone online to purchase their needs. But because of their sizes, small and medium businesses are constrained by tight budgets, or they simply dont need as many of the features provided by the web hosting companies.

Similarly, an individual, such as freelance writer, may have the need to be online just to publish writings and articles with just enough space at a minimum cost. Some web hosting providers target their niche group of customers with low-cost services. The low-cost advantage is gained by providing minimum disk space on a server. A single server may be crammed by many websites because of less disk space and low cost.

The cheap website providers can be located online, and there are many providers operating from cities such as Ontario and Toronto. A typical cheap plan may have 500 MB disk space, 30 GB data transfer, and limited email accounts. The rates may be as low $1 per month. Some providers give incentives like limited free monthly hosts for referrals to friends and relatives.

The cheap rates come with many limitations. A crammed server may result in less speed, and slow data transfer and page openings. The web host firm may cut costs by providing less frequent customer support, resulting in more downtime in case of operational failure and longer complaint-handling periods. They may also lack technical support to help in developing web pages and modifications.

Other than cheap hosts, there are budget hosts and free hosts. Budget hosts provide services that are better than the cheap hosts, such as support twenty-four hours a day, seven days a week and more storage space. There are free hosts who exchange domains for free storage facilities. Free hosts may be beneficial for websites in the early stages and not-for-profit organizations. But they also have the same disadvantages as cheap hosts.