When I bought my first hosting account it was US20 per month for 100mb space, 5gig bandwidth, 100 MySQL, 100 pop3 and 100 ftp accounts. Several years later all for $20 I can get unlimited everything. Not only that but also master and alpha reseller accounts for the same price! Where is the hosting business headed? Everything got so cheap!! Yet dedicated servers and VPS prices did not change much. How can master/ alpha reseller accounts be as cheap as $20 a month when you can recover your cost with just 1 client, are these providers crazy or scammers hidden in plain sight?
Shared and Reseller hostings are in competition due to the overselling going on, while VPS and Dedicated servers are not the things which can be majorly oversold. If it is done, you know about it as you go for higher servers due to your shortage in resources. This is why the shared and reseller hosting is going on cheap these days.
Nothing is unlimited. Hosts offering rock bottom prices are overselling and you can expect slower server performance. Disk space and Bandwidth limits have increased due to the technology advancing each year. Hard drives are getting bigger and CPUs getting faster. Many hosts are able to host more sites per server with faster technology and lower prices in efforts to compete in this market.
I think shared hosting has gone to crap. The overselling and unlimited hosts have ruined it. I wouldn't recommend or use a webhost that didn't list reasonable allowances for the price. So If I were to go with a webhost on a $3 a month plan they wouldn't be offerning more than maybe 500mb diskspace and 10GB bandwidth or I'd skip over their lying asses.
It it is my belief that with more companies on the market, it is harder to differentiate yourself. It seems like most hosts have been doing this by offering more features at a lower price, although there's still a few creative firms out there introducing new products. I've found that most companies (not all, mind you, but most) still use 10MB of space and have either a static website or a mostly-static website (maybe a a PHP application or two), it doesn't cost anything to offer those sites 10,000GB of drive space as opposed to 1,000GB of drive space. Since most consumers (the DP crowd isn't most consumers in my opinion, however) compare features and price, it will appear that of the hosts listed above, one is offering 10x the features for the same price. Not only would that host "get the customer" but since the customer is only using a very small percentage of the space they're allocated, it costs the host nothing more. However, to give some more feedback on your question, I think that the future of the hosting world is a bright one. With higher-bandwidth consumer connections, I think you'll see more emphasis on services outside of web hosting, such as data backup, media streaming, etc. Ten years ago, this industry barely existed, where it will be in 10 years is an exciting thought. John C. Young
Don't forget the server hardware is getting so powerful and cheap. In the other hands, I agree the most sites are static and the owner is hoping to make it big. As soon as the owner makes a lot money on the site, they can afford to care much more than a shared hosting account. Unlimited on everything is nothing more than a marketing technique. Until we all upload everything to them at once. haha