The hosting location of your website data is something that must be discussed. Many website owners are not familiar with this issue, and probably do not give much thought to the fact that their website data may be hosted on another continent. Some are actually aware of the issue. They have intentionally purchased a somewhat cheaper hosting plan to lower their website running expenses, with the notion that it will not have a significantly negative impact to their website performance.
Yes, the obvious positive benefit that you can have from having your website hosted at a remote hosting company is the money you will save with the cheaper hosting plan. Additional benefits or reasons would be a higher amount of resources (more RAM, bandwidth or storage) offered by the overseas hosting. In some cases US companies choose a hosting company from Europe more specifically France or Germany because their hosting companies are subsidized by the government and they are able to offer substantially cheaper hosting services.
For example, let’s take a website that uses dynamic pages (let’s say WordPress) that has moved from the US to the Europe-based hosting company while their main audience is in the US. The visitor will have a high number of requests to your website hosting server for every page he loads. If your website has upped its network latency toward the user by 100ms on average, the consequential latency build-up may be considerable.
We have to make it clear, the visitor may not experience slower download speed for images or videos, but the overall number of communications between visitor browser and your hosting server will add significant latency time which will, in turn, increase your page loading time. Now we are getting to the real issue – page loading times affect SEO. Google has confirmed that for some time now they have been using the page loading time as one of the important factors in the website search ranking. Any page or website that has their loading time higher than 4 seconds is actually penalized by Google with the negative point in their search ranking calculation. Having that kind of a high page loading time is also linked to bad or very low conversion as modern internet users have very website focus and will not wait for the website to load.
To make a kind of a real-world comparison, Amazon Web Service reports that a server on the US east coast has an average network latency of 36ms to the mainland, 66ms to the west coast and around 258ms to Korea or India. The same report tells us that the US east coast has 89ms latency toward the UK and around 90ms toward Spain and Germany. This can tell us that having your website hosted in the same country or same continent will result in your website network latency under 100ms, while overseas hosting may have +250ms which is may translate into 2-5x longer time your visitors will receive communication from the website server.
Unfortunately, we can conclude that having your website hosted on a cheaper overseas hosting actually will not save you money if it increases your page loading time and you may be losing profit. One of the key factors of current website SEO is having your website hosted relatively near to your target audience – in the same country or at least the same continent.