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How important is space and bandwidth to your needs? This is an important question, and you need to mull over it before buying a hosting package. You must examine the content that you plan to host. Is it plain text? Are there photographs? Or do you plan to host audio and video files also?
Text takes the least amount of space; photographs and graphics take considerably more; while audio and video files take the maximum space. This applies to both storage of data and transmission of data.
The reason why hosting services offer you so much space is that they know that you will never be able to use it. One host may offer you one Gig of bandwidth at particular price. Another host might offer 500 Megs at the same price.
You must make an assessment of your storage needs. You also need to assess how much traffic is likely to flow through your website. Based on this you need to decide your space and bandwidth requirements.
You can determine your space requirement by using the industry thumb rule that two MB of space is enough to host ten pages of content and 4 to 5 photographs. Based on this, you can decide how much space you will need.
You can similarly calculate your bandwidth requirements. However, to do so you need to understand the difference between bandwidth and data transfer. Bandwidth is like the diameter of the water pipe while the data transfer is the water that flows through it. If you expect a very high amount of data transfer then you should go for a high bandwidth pipe; otherwise you can settle for hosting packages that offer less bandwidth.
Data transfer can also be defined as the data received or transmitted during a period of time. For example, suppose your website has a web page whose weight is 50 Kb then every time a visitor accesses the web page 50 Kb of data gets transferred.
The best policy is to keep your site simple. Avoid using large photographs or graphics. When you do, use compression software to reduce their weight. This will allow visitors to download pages easily, even if you are using a smaller bandwidth pipe.
If you are new to the net then you should take the help of a software professional in deciding your space and bandwidth needs.