Web Hosting: the peaks, pitfalls and when to sell.
Website Hosting is a vast and varied industry, with increasing pressure for companies and high street businesses finding themselves forced online by dwindling passing trade and huge increases in online traffic. Some would say that there has never been a better time to be in the Web Space industry. Surely though, as ever more people jump into what seems to be a lucrative market, all Web Hosting Companies will begin to feel the stretch of their industry becoming more and more saturated with new web hosts of all shapes and sizes turning up and fishing for the same pool of clients?
Why Host?
Website Hosting simply means to Host the space on which a website resides online. That is to say just like you might pay rent to operate your business out of physical space on a high street, in the same way, websites have to sit somewhere, so the website owner is simply choosing their preferred Hosting Company to work with, who will host their website on a physical server. Packages and services vary wildly so dependant on the business and business model, there really is a client for every web host and a hosting company for every client. Usually, hosts will fall into the following categories:
Established Web Hosting Companies – usually longer standing in the industry and longer in the tooth with technical and service experience, these hosting companies will usually have their own Hardware, their own servers, and run their own backups from multiple locations. Meaning they can ensure that from start to finish – from server level to the front end of the website, they are in control of all the maintenance, programmes, plug-ins, safety procedures and customer support you might ever need.
Website Designers – When a website designer is building websites for clients, they are focussing on the design and functionality of that website, and charging their customer as such. Initially, they would then register that domain name with a large corporate Mother hosting company. They will either cost the domain and hosting into the price of the website build and liaise with that hosting company, or they instruct their client to sort out and pay for their own hosting independently. However very often the client will regularly come back to the website designer with queries or problems that in fact should be dealt with by the host. Moreover, sometimes specific features of a website build can be dependant on the nature of how and where the website is hosted. For these reasons and more, website designers will very often opt for buying their own server, or server space, and reselling the space directly to their website clients, thus cutting out the middle man.
Resellers – Reselling is the Hosting, without the physical hardware required to Host. Meaning that a Reseller will launch their own hosting company on a supply and demand basis only, so without the initial cost of owning and maintaining servers, they would promote their hosting company, and deal with the client first to learn the demand, and then a ‘Mother’ hosting company, to supply the server space. They will rent the server space, and allocate it to their customer, and add a profit margin. This can be lucrative for the reseller, and the customer will often receive far more tailored and dedicated support from the reseller, than they might receive from a large company hosting hundreds of thousands of accounts.
Highs and Lows of Hosting.
Like with any industry, if you want to do well, you must be able to stay ahead of the trends both technologically, and regarding the level of service is expected, and offered competitively. Particularly in the web world, this can be exciting, to always be on the forefront of pushing the boundaries of innovative technology and cloud software, always pushing to elevate business to a newer level of smooth operation and seamless speed and connection.
But as I mentioned, what happens when the pond gets a little too crowded? Is it really a free-for-all? It seems not. In reality, there is no such thing as truly ‘unlimited space’, even in cyberspace, and that means that to maintain the balance, there must be restrictions that hold the balance.
Just last month cPanel, which has recently undergone a change of ownership, announced drastic and immediate changes to their pricing structure. Despite not altering their prices for over twenty years, the announcement was met with huge concern and anger, with many cPanel users looking to move elsewhere. cPanel says that ‘it must align itself with evolving technology’ as throughout the twenty years since the pricing structure was created, there has been a huge shift in the capabilities of the servers – to offer unlimited space for unlimited accounts at this time is unfeasible, and relative pricing structures must be introduced.
Statistically, although there are still lots of domain names being bought by those optimistically hoping to arrive into the world of web hosting with a splash, there are as many hosting companies looking for a way to sell their accounts and their company, in pursuit of industries where making a living isn’t beholden to the whims and decisions of these industry giants.
Where does this leave the web hosts who are forced to reevaluate the viability of their entire business model, while these announcements are unleashed and the industry is rocked by these changes?
Pass the book – The least favourable, but unfortunately, most feasible option for many web hosts is to cost the increase in their overheads into what they must charge their client. We all know how that goes – a resigned announcement, and nothing good follows. This could cost you many clients, and leave you at risk of poor reviews. However, to continually stomach the costs of industry price increases will only suffocate your profit margin and business.
Search for suitable alternatives – depending what the problem you are facing is, it is possible that you will be able to find a cheaper company to operate your servers, and back-ups, or in the case of the disaster I mentioned previously a new control panel. Possibly. The truth is if you are hosting many accounts, this is incredibly difficult to do without disrupting your clients’ service, losing data, or costing money. In the case of an alternative control panel, if you want to use a reputable trusted company, options are seriously not there, there are 2 or 3 of these tech giants that you could move between, and for the upheaval required, can you ever ensure the next company can hold the prices, when the changes being made are industry-wide?
Selling your Hosting Company – I mentioned above that more and more small-medium hosting companies are looking to sell while there is still money in the business. Before the industry becomes any more strangled and the regulations tighter and more expensive. If that’s the way you are looking to go, it’s easy – there are always massive hosting companies waiting to mop up all of the accounts that are left adrift when smaller hosting companies run into trouble, but what becomes of your clients? The danger of selling up to a large ‘Mother’ hosting company is the customers you have valued and appreciated since the beginning will suddenly find themselves dealing with a much larger company, with little-no immediate support. You will not be able to dictate they hold prices for your customers, and the level of service they receive, leaving your clients feeling they have no choice but to begin the process of looking to charge their service provider.
Selling the right way. How do I sell my hosting company, whilst protecting the interests of my clients, and my own reputation?
Deciding to sell your hosting company is a huge decision, but at 365Hosts we believe that having fewer happy customers is much better than unhappy customers who cannot reach us and will eventually leave. So if you do make the decision to look for a safe pair of hands to carry on your accounts, and your legacy, look no further.
Our technical expertise in migrations and all things hosting, as well as our customer service focused ethos will ensure that from the beginning to the end of our relationship we will be able to make this transition as painless and seamless as it can be both for you and your clients.
If you are feeling out of your depth, tired of trying to duck and dodge the curveballs this fast-moving industry will throw at you, haven’t got the time to sustain the level of support you would like to offer, or are just downright fed up, do not hesitate to get in touch with our 365Hosts migrations department, where you will be met with a confident and sure helping hand, ready to move you on from this phase of your journey, onto the next.
We believe that all business owners who are juggling a business and website deserve more than to be a number on a server, they deserve to be valued, supported and appreciated. We don’t need more clients, but we believe every client needs a host that will allow their business to flourish it a way that can only happen with the right team around them.