Article by Jerry Low
Geek dad, SEO data junkie, investor, and founder of Web Hosting Secret Revealed. Jerry has been building Internet assets and making money online since 2004. He loves mindless doodling and trying new food.
Here at Web Hosting Secrets Revealed, we spend a lot of time thinking about web hosting.
Generally speaking, we look at how individual web hosts stand up in terms of cost, service, and reliability. These are real and important factors when you’re considering a host for your site. But there’s a whole industry here, with dynamics and factors at play that effect the kinds of services you can access as consumers and how those services are delivered.
Downtime means lost money, unhappy visitors, and potential damage to your search rank. When issues arise, the ability to reach a competent human being can be the difference between speedy resolution and hours of frustration. And cost is straightforward: when you’re working on a limited budget or just trying to maximize profit, you want the most bandwidth, storage space, and loading speed that your dollars can buy. Understanding the changing hosting landscape can help you make informed choices about providers that will meet your technological needs over the long haul.
Like every other space, hosting is continually evolving. Technologies are changing and improving, and as a result the technological boundaries of hosting are being pushed as well to meet the changing demand. This creates opportunities for consumers: not just to search for the cheapest hosting deal or the most flexible hosting model, but to think about what kinds of business models they want to support and whether or not they need specific features in their packages.
But where is the hosting industry headed in 2012 and beyond. At the recent HostingCon 2012, a number of the industry’s key players gathered to talk about the latest concerns and areas of innovation for the industry. Here are 5 big trends that are worth paying attention to as we move into the next twelve months.
From Amazon’s Kindle Cloud Reader to Apple’s integrated cloud allowing extensive Mac device communication, even the most casual user is aware of the power of the cloud. Small and medium sized businesses are slowly adopting cloud hosting in even the most staid markets. Major enterprise cloud solutions have been in development for years and are being deployed at a high rate. But the security aspects of the cloud are still being worked on. Many suggest that hackers are focused on big potential breaches in cloud security. Therefore, it’s increasingly important for hosting companies offering cloud products to anticipate weaknesses in cloud security and address those aggressively.
Customers are also becoming savvier with respect to potential security issues connected with the cloud. As a result, hosting companies are developing stronger communications around this issue in the form of copy, collateral, and training for their sales teams. The need to fight malware and abuse is a major theme affecting all kinds of hosting companies, not just the cloud hosts. Continuing investments and upgrades in this area remains a major theme for hosting companies.
The last few years have seen hosts focused in on providing infrastructure needed to support cloud hosting* and rolling out basic services.
In the coming year, prices are likely to increase as providers layer differentiation and additional services on top of existing hosting plans. An important trend is the degree to which individual providers are able to do so in an automated way that minimizes the need for human intervention. The more automated this process is, the higher margins will be on individual accounts. As a consumer, it’s helpful to understand how efficient your potential host’s processes are in this respect – it will save you tremendous amounts of aggravation when an issue does occur.
In addition, cloud providers seeking differentiation will need to find other avenues for communicating their advantages to customers. Quality customer service is important, but it’s not enough. Instead, cloud hosting providers need to find real points of differentiation and market those effectively. 2012 so far has proved a big year for marketing spending in the hosting industry, and this is likely to continue as hosting companies work to educate the public. Differentiation is especially key as cloud hosting companies compete against Amazon, which has to a certain degree commoditized cloud services.
Example: Atlantic.net is offering ‘VPS Cloud’ service to less-techie hosting users
* Note: Cloud and VPS are two very different things; read our VPS hosting guide to learn more.
As more big players like Amazon and others move in to the hosting field, it’s growing increasingly important for smaller players to have strong partnerships. Affiliate and reseller relationships are becoming a mainstay of how these businesses profit, as a number of small to medium sized hosting companies become bundlers for the specific services packages needed by small business users and online companies.
Competitive pricing, niche specific approaches, and stellar service will all play a key role in how this growing class of middlemen continues to evolve. Some speculate about whether hosting companies will actually phase out their own infrastructure altogether in favor of acting as straight resellers with lower infrastructure costs and therefore higher margins for Amazon and other larger players.
Major hosting and domain registration companies like GoDaddy have been offering website building tools for ages. But new players on the scene such as Yola and Weebly are changing the order of things. Instead, the company is positioned around solving a specific need: companies that need a cheap, easy, simple to manage website. They then advertise their easy to use website builder, which is free, and bundle in hosting, domain registration, and other services. But angling their marketing in a specific way, these companies are smartly repackaging hosting for the small business market in a way that’s not overly technical and therefore is accessible. While this is largely a marketing spin, it has directly impacted the way in which consumers purchase hosting and is a trend that bears watching.
Finally, recent changes to the domains available have created additional profit centers for hosts. From registration to hosting, many companies are taking a specific position on hosting non-US extension sites. Gone are the days when every site was either a .com, .net, or .org. Today, users can choose from more than 100 different extensions and experts say hundreds more are on the way. As a consumer, understanding whether a host charges more or offers a specific advantage when hosting less common but popular extensions such as .co and .me is an important step.
Major trends in hosting are continuing to push infrastructure development, the companies that are offering services and how those services are presented to consumers. As consumers, it’s beneficial to understand the dynamics of the industry in order to help you make your best decisions. We encourage you to check back as we continue to cover major trends and technologies in the space, as well as take a look at our detailed hosting reviews to help you make the best choice for hosting your site today.