Hosting and domains: what you actually pay for each year

Website hosting and a domain name are two costs that usually arrive once a year on a single invoice, and what sits behind that invoice is unclear to a lot of business owners. A sum lands in your inbox and you have no way of judging it: is it fair, what exactly are you paying for, and would another provider do the same job for less. Let us look at what that annual invoice actually covers.

A domain is not hosting

A domain is an address. It is the name someone types at the top of a browser or finds in the search results. Hosting is where your site's files and database actually live. The two services can come from the same company, but they can also be bought separately, and technically they depend on each other by no more than a single pointer.

Estonian domain names are managed by the Estonian Internet Foundation, and registration goes through accredited registrars. The most important thing to understand here is that a domain is never bought outright. You rent the name for a fixed term, usually a year or a few years at a time. If the renewal is missed, the name is released after a while and someone else can register it.

The second place where confusion arises most often is the registrant record and the contact email address. If the domain was once registered in the name of a former agency or under the email address of an employee who has since left, this only comes to light when something needs changing or moving to another provider. A simple task then drags on for weeks. Another common misconception is that the domain is the website. In reality a domain can be perfectly valid while the site is down, and equally the site can be running on the server while the domain has expired.

What the sum is actually for

The annual payment is not an empty rental charge. It buys a fairly specific set of things, all of which exist for as long as someone pays for them and looks after them.

• Server space, where your site's files, images and database sit.
• The name, which belongs to your company and cannot be used by anyone else at the same time.
• An SSL certificate, thanks to which visitors see the padlock icon in front of the address. In most cases this comes free through Let's Encrypt and renews automatically. A paid certificate is a separate product, not an obligation.
• Mailboxes and databases, if they are included in the package.
• Backups, meaning that yesterday's version is stored somewhere.
• Technical support, someone you can ask when something breaks.

The package description usually lists disk space, data transfer, the number of mailboxes, the number of databases and the PHP version. In practice the limits matter more than disk space, because a typical small business website fits into a couple of gigabytes without any effort. The physical location of the server also matters. For a visitor in Estonia or Finland, a nearby server responds faster than a machine on another continent. In our own case hosting is 0 €, which means the website price of 790 € plus VAT already includes the place where the site runs. The remaining figures are on the prices page.

Where a cheap package cuts corners

Very cheap hosting is not a scam, but savings are always made somewhere. Usually that somewhere is machine load, backups or support. If a single server is shared by a very large number of sites, heavy traffic from one neighbour affects the speed of your site too. The same goes for an outdated PHP version, which limits which systems you can use at all.

Shared hosting and VPS

On shared hosting, many sites share the resources of the same machine, which is why the price is low. A VPS or cloud server gives you a fixed share of the resources for your use alone, but requires more administration. For a small company's brochure site, shared hosting is usually entirely sufficient, provided the provider has not oversold the machine.

A common misconception is that a more expensive package automatically makes the site faster. If the site itself is heavy and the images are unoptimised, a bigger server only masks the problem for a few months. You can measure your own site's speed with Google's tool at pagespeed.web.dev. If the result is poor even during quiet periods, the fault is not in the server but in the site itself.

What the hosting price does not include

The most expensive misunderstanding is the assumption that paying for hosting means someone is looking after the site's content, updates and security. A hosting provider keeps the server running. Responsibility for what runs on that server sits with the site owner or maintainer.

• WordPress and plugin updates, unless a separate maintenance agreement is in place.
• Security monitoring and malware removal.
• Content changes, new images and price list corrections.
• Work on visibility in search engines, which is a separate job. Our SEO service is 379 € per month plus VAT.
• Additional features, for example a booking system at 19 € per month plus VAT or a campaign pop-up at 79 € plus VAT.

Backups and restoring them

Backups are not automatic with every provider, and the existence of a copy does not mean that restoring it is free and quick. In some cases restoration is separately chargeable work, in others the copy is only a few days old. It is worth asking this once and writing the answer down, because on a bad day there is no time to start investigating.

How to assess your own setup

You do not need to be technical to work out whether your current invoice is reasonable. It is enough to know the answers to a few questions. Whose name is the domain registered in, and which email address receives the renewal notices. Where is the server located. Which PHP version is in use. Are backups taken every day, and how long does a restore take. How quickly does support respond, and in which language.

The next step is to add up the full annual cost: domain, hosting, email service, certificate, maintenance and any add-on modules. Only that total is comparable. It is quite common for invoices to arrive from three different places and for nobody to have reviewed them in years. If it turns out you are paying more across those three than a new site with hosting included would cost, there is good reason to do the sums again. You can see examples of completed work under our work.

If you are not sure what you are currently paying for, send us your domain and your current invoice and we will look at it. You will get an answer in plain language and with no obligation: contact and free audit.