The Web Hosting Industry

[InteractAsia]

What do you think of the Web Hosting Industry now?

There are heaps of companies offering hosting and it must really be tight.

Your thoughts and opinions

 

[RJ]

The web hosting industry is a mess right now. Most small hosts now are competing in price rather than long term viability of their business, ensuring that almost all hosts will struggle to make money.

Consumers will need to learn that the lowest price is not always the best option. It's important to find a company that has been around and not going to disappear next month. I've had clients that insist on hosting with local companies, and every six months it seems like they have to change providers.

Will it always be like this? Maybe. But I think the market is ripe for a company to come in and become a well known leader in low web hosting, much as Rackshack did with the dedicated server industry.

 

[KidVeeDublu]

i can give input from the standpoint of another industry...I am an performance technicial (auto) Not only is our company The sole importer/distributor of many products that are big in the industry, i am also codeveloper of a supercharger system for the 2.0 8 valve volkswagen. You would think with all of these products {that we control} everything would be great right? Between the drop of the U.S. dollar since europes transition to the euro and whatever politics are the catalyst for our overall hit to the economy no industry is safe right now. There are too many ghost buisnesses with no overhead that are selling product literaly 5 percent over cost...first of all this makes it entirely impossible to run a buisness with high overhead and responsibility of controling a dealer network when you cant have a competitive margin...The consumer shops for the price and unfortunatly they sometimes forget about service. Public awareness has to be brought to attension because although many people are watching thier wallets they are really destroying legitimate buisnesses in the long run....Everyone has to maintain a structure and conform...sell yourself on your quality, style, and unique attributes not because your cheaper....

sorry for the long seemingly unrelated feedback , it is just an observation i have made on buisness structure in general...

 

[RJ]

Thanks for sharing that observation, Keith. So in some ways the hosting industry faces the same problems other industries are facing with competition and price wars.

One issue in the hosting industry, is anyone with 100 bucks and some free time can become a web host. Good web design skills or a nice looking template can make anyone look as good as the next guy, which is not usually the case.

I'm hoping some active web hosting companies can comment here on how they see things in the industry.

 

[KidVeeDublu]

Thanks RJ..Quite frankley you can jump into the automotive market just as easily with a little knowlege and a computer with NO overhead...all you have to do is set up a web site and tax ID (some cases they dont even have a tax ID)and fish around until you find buisnesses that will set you up on an account. Since these guys are not established they sell by being real cheap. Its a matter of taking the order and faxing a purchase order/dropship to the company and never even see the product...when you are running at home alot of people see a net of $1000-$2000 and think it is alot of money but not enough for a buisness to meet salaries,rent,inventory,insurance ect... Honestly with a slight knowledge of protocol and a little bit of the desired industry i see it possible to effect any industry in the same matter....I see a similar effect in the design industry as well...the kid at home making working templates and logos for $20-$50 is pocket change for them but hardley enough for a professional to make a living on....Although i am self taught and working on becoming a professional these are all factors i consider because i am not going to take a paycheck out of someones pocket who needs it to live for thesake of a couple of bucks...if you want to build a portfolio start building practice identities and diversifing your style that way..if someone i know needs something I'll help them out...just my 2 cents
i would definitley like to see feedback from others on this topic because it is a something that applys to all aspects of marketing and buisness in general...

 

[AndrewZ]

Webhosting industry right now is an absolute mess. As RJ said, anyone with 100 bucks and free time can run there own hosting site.

This has got to be killing the major hosting providers massivly, and im sure they have noticed at least a small bit. The problem is, most of the time someone is looking for a professional, built, stable, and reliable hosting company that they can trust for long term uptime and support. Rather than the 15 year old kid with 100 spare dollars and his hosting site, not buisness.

All of these minor hosting providers are always competing to offer the most, for the least. For some people that just great, but for others it doesnt make the slightest difference. They are more concerned about up-time, support, reliability, and will pay the price for it. If it costs 7.99$/mo. to be hosted with a stable company that you know you can rely on to be there at 3 a.m. for phone support, and have a great up-time then most internet 'newbies' looking to host their buisness will pay that. Why? Because the need to count on that stuff. For someone else to cut down the price by 3$/mo wont make a difference to them, unless they can offer the same support and reliablility, which most cant.

So I basically think that if those minor hosting sites want to offer hosting, good for them. But be honest to your customers. If they ask, tell them how long you will really be able to be there for support, and how much up-time you will really have. People that are offering all of this 1$/2$ hosting are really bringing down the buisness alot. The value has gone way, way down while the availability has skyrocketed. And yes, it skyrocketed because of how easy it was to get started and attract your customers by offering that much lower than the competition....

Phew, thats all :D