In my case, I pay a monthly fee to have a server set up in a safe, cooled facility. The variable costs are:
- Server performance, including hard drives, CPU, and RAM. I pay for a high end server with a lot of RAM and fast hard drives.
- Latency - the server is set up to quickly respond to requests. Higher end servers like mine are set up near or on multiple Tier 1 trunks, so that when someone types your domain name into their browser, they are connected quickly to the server. This is costly but I pay the price so my clients can have quickly responding web sites.
- Bandwidth - Basically, I pay for the amount of data that gets moved from your site to a user's browser when they connect to your site, download images and other content. Videos tend to use a lot of bandwidth, unless hosted on YouTube, which is the common method nowadays.
Now a different kind of expense to hosting is maintenance; server-wide and site specific. Cost of purchasing an operating system, email server software, SQL Server database software, firewall software, anti-rootkit software, virus protection software, and other miscellaneous packages. Then there is my time keeping all those tools updated.
Then there is my time spent doing certain things for sites that I'm hosting. Initial setup can take some time, depending on many factors with how your site is unique. Then there is the monthly maintenance, which depends on your site.
What is not necessarily included in Hosting for most companies is backups. That is usually an extra. It's a thing OceanMedia offers for free, as in once per week. I do this for a few reasons, including: there have been so many times customers have come to me with, "Oh no I think I deleted ____! Do you have a backup?" So I offer this as part of hosting as once a week. Some clients elect to pay more in order to get me to backup more often.