Cheap is a mindset.
Cheap is not producing the best for the job. It is merely acceptable, what will pass the most superficial tests.
Cheap can scale only at the cost of its own sustenance.
Cost arbitrage as the key, or the only, element of a business strategy is a sure fire route to disaster. Much of the offshore sector serving the financial services industry will be squeezed out, due to the recent economic turmoil in Wall Street.
Those with no clear value propositions beyond cost savings will have the Beijing’s and Manila’s snapping at their heels.
Cheap is not the same as free.
Contrast this with those that have free product/service/whatever as their pricing strategy. They often seem to have a much deeper understanding of the marketplace, a very clear strategy for revenue, even if it just says a million hits to pay for the hosting costs.
Cheap has no design.
Anything cheaper is only the first step to enter a marketplace. To retain it as the cornerstone of a modern business is to be exposed to the vagaries of economic fluctuations.