Earlier quoted context omitted.
This is a fluff piece, probably written for SEO juice. At least the submitter of the story is open in his profile that he works for the company in question (anchor) and is the author of the piece A better article would have quantified all the measurable metrics like "virtual machines are 'fast'" and talked about some of the negatives - like privacy/security concerns etc. What I want to know is - why are they so much…
According to my bosses who have done the research when setting up their web hosting, the Australian hosts are 1) uniformly VERY expensive and 2) not as reliable as hosting providers elsewhere. As someone else said, bandwidth is expensive and travels great distances. But that's not the only reason either imho. Things are simply more expensive here. :(
The second point however is a stereotypical blanket statement. It's important to note that Anchor as a company designed and maintained the infrastructure of Github.com and now does the same thing for testflightapp.com; Both of which are high profile startups each of whom have traffic numbers orders of magnitude higher than most Australian hosting providers see across their entire network.
In the end, quality hosting isn't just about the hardware (linode, rackspace), but highly skilled engineers who can architect and provide solutions that don't 'just work' now, but scale into the future.