There are a lot of reasons to like LMI for Web hosting: they're small and local, have a good story, and they provide live tech support from people who are physically there with the Web servers.
It is absolutely worth more to me to be able to talk on the phone to tech support people who are in the room with the servers and also to support a local company. But how much more? I personally would be willing to pay 30% more on principle to a local shared hosting company with live tech support and maybe even more if the cost is low to begin with.
When you do the math I believe that the actual premium you pay for LMI's in-person tech support and local presence is more like 700%!! And even then LMI may not be up to the standards of a good online host.
Take the case of ICDSoft who I use (or BlueHost -- similar situation). For $10/mo here's how LMI (Bronze hosting) and ICDSoft (Business plan) stack up:
Hosts: LMI | ICDSoft
Setup: $50 | free
Storage: 25MB | 10,000MB
Bandwidth: 1GB | 200GB
Features:
LMI: I don't see anything apart from html hosting.
ICDSoft: PHP, MySQL, CPanel, Stats, cgi-scripts, and everything else and that I want in a PHP host and some stuff I've never used.
In order to (roughly) match ICDSoft's $10/mo plan it looks like you need to spend $79/mo for the Platinum Web package at LMI (plus a setup fee).
Furthermore ICDSoft's hardware is excellent while LMI's is apparently substandard from what their support people have told me and what I've experienced. ICDSoft's uptime is fantastic(https://www2.suresupport.com/network.php) and LMI's poor in my experience with the one server that I have monitored. ICDSoft's tech support response time (over a Web form) averages 60 seconds! Half the time LMI has to call me back. When I email tech support about half of the time they take 24 hours or more to respond to an email or they just don't respond.
In my experience both companies are able to go to impressive effort to make changes for you or customize your hosting account -- LMI has perhaps been able to do more of this. And LMI has some flexibility about things like reaching the maximum storage space and negotiating hosting cost if you spend a lot with them. It is nice to be able to talk to the boss at LMI (though he has been a better salesperson than problem-solver). There are some pretty good tech support people there, though no one who has consistently solved problems quickly that I couldn't. There's really nothing else positive that I can say about LMI's service.
The most disturbing experience I've had with LMI (with a client's account -- I obviously don't use LMI myself) was the down time for the machine hosting my largest client's Web site. For a few months in 2007 their server averaged 8-12 hours down a month, mostly in the morning or middle of the day. They gave different reasons each time: another user on the machine abusing the bandwidth; conflicts in newly installed software; the machine had a bad hard drive.
I can confirm that the last problem was legit. They kept using the hard drive that had bad sectors for a month until finally it crashed, downing the machine for a morning. Many hosting companies either have RAIDed systems so that a bad hard drive won't affect service or they have policies to replace a hard drive when it first shows bad sectors and they scan regularly -- not just when there's a problem.
I've given LMI 2 stars for the few good tech support people, because they're a local business, and because they do offer, I guess you might call it, "functional" hosting.
If I were advising LMI:
Offer the option of resold hosting through a company like ICDSoft or BlueHost. As a reseller LMI could mark up ICDSoft's volume prices and still charge their customers less than ICDSoft's advertised prices. It would be easy to continue to offer phone tech support.
I would give their clients the option of locally-hosted machines for accounts that don't need much space or bandwidth but charge a much more realistic premium for that (subsidized by the ICDSoft profits).
I'd implement standards for speed in getting back to customers, a real ticketing system, procedures for dealing with hardware problems, standards for uptime and for replacing hardware. The only problem with standards is then you have an objective metric that may show poor value.
I'd expand the business with a lot of related services like customized log file analysis, tech support for Office and Windows, Google Ad setup and purchasing, maybe even custom searches for clients at an hourly rate.
In my opinion those are great ways to leverage the advantages of a tech support staff and local service. read more