Hello,

I was reading interviews from fellow competitors especially some of the larger, corporate like companies. The people in charge claim the market is way over-crowded and they will be the only one left standing in the end. Does everyone agree or disagree that the market is saturated ? Sounds a little like they are trying to discourage more reselling, heh.


would post the links, not sure about the rules though.

thanks
jon

I definately agree that the market is too saturdated.

A search on google tells me: Results 1 - 10 of about 23,900,000 for web host

Hey Jon,

Interesting question. It sort of makes me chuckle when I hear about hosts saying the market is saturated. A good definition can be found here http://en.wikipedia.org/wiki/Market_saturation In fact what they probably mean is the industry is saturated, in other words too many companies all offering the same thing, saturated isn't really the term, competitive rivalry is what should be used and yes the hosting industry is highly competitive and yes I'm sure they'd love to stop a few more joining in. Fact is they won't, not yet anyway.

So, the market isn't saturated, there are lots of opportunities to sell hosting to those who don't already have any (around 50% of businesses here in the UK don't) and also to take advantage of both changing consumer purchasing power and ever changing trends.

The key point is that there isn't a dominant (or two) hosting company and so the industry is still open, it's easy to start, requires little capital or expertise, customers can switch easily, and so on. I'm not saying these are good things it's just the way it is.

If the big boys want to decrease competition then they have a long way to go, because it would require a few key changes (understanding the difference between market and industry may be a good start). Unless they can come up with a way to stop you setting up in competition against them then they will have problems.

Just my 2 cents

Originally posted by pvps
Hey Jon,

Interesting question. It sort of makes me chuckle when I hear about hosts saying the market is saturated. A good definition can be found here http://en.wikipedia.org/wiki/Market_saturation In fact what they probably mean is the industry is saturated, in other words too many companies all offering the same thing, saturated isn't really the term, competitive rivalry is what should be used and yes the hosting industry is highly competitive and yes I'm sure they'd love to stop a few more joining in. Fact is they won't, not yet anyway.= problems.

Just my 2 cents

Hi, I definitely agree with you. These hosting companies want to scare away any new comers or potential resellers.

The great thing that helps out reseller is no one can tell the size/power of your company. Everyone is on the same scale so to speak, all the companies are faced with providing a good appearance, and if that works , well you can get customers.

Some people, if not many, cannot tell the difference between A-Plus and someone operating out of there house. I think there are advantages to both. Perhaps the support would even be better with smaller companies.

it's full of companies that pretty much offer the samething. it's the same when Mike Dell started, that IBM, Compaq, HP, Toshiba...etc control most of the market but he find a niche by selling direct to customers and cut off middle man that turn into a pretty good niche business. so...the market is saturated like they said but you can still make money if you find your niche like Mike Dell.

my two cent.

I agree as well. The bigger companies would love nothing more than to scare away new comoanies, or potential start-ups. It will never happen, due to the fact there is just too much opportunity for small organizations to take advanatge of in this industry, and the costs of starting in this business are not near what they can be for other technology related industries.

Market saturation really irks me as a term, just because it seems to be used by people who dont want to try. A funny little bit on market saturation, where I live there are about 12 retail-food stores, within a radius of 2-3 miles..However, each has their own niche, and each one is during pretty well. Take it for what it is worth :)

It also depends the market you are going after as well.

Originally posted by stokes_83
I agree as well. The bigger companies would love nothing more than to scare away new comoanies, or potential start-ups. It will never happen, due to the fact there is just too much opportunity for small organizations to take advanatge of in this industry, and the costs of starting in this business are not near what they can be for other technology related industries.

yea, there are about 4 pizza shops in one block where I live. All have been around for a long time, and show no signs of struggle. Guess the entire town eats a lot of pizza, unless they have some other type of business I don't know about :)

Don't forget guys that we are just at the BEGINNING of the web!

sorry pvps, but i don't understand the difference between market and industry, could you please explain? thanks

<disclaimer> (This is probably oversimplification) </disclaimer>

There are still more customers who could be found and sold to, but there is really not room for more companies to serve these users.

sorry pvps, but i don't understand the difference between market and industry, could you please explain? thanks

In simple terms:

A market is made up of customers who buy things

An industry is made up of companies who make/sell things

If the 'market' was saturated then everyone would have web hosting and there would be no 'new' sales, only stealing customers off competitors. This is obviously not the case in web hosting.

An industry by definition can never be saturated, it can be intensely competitive, but not saturated.

Various reports on web hosting 'diffusion' (the percentage of possible customers who have already purchased) put the rate at between 15% and 55% depending on the country. So the there is a potential untapped market of between 85% and 45%. If the industry make up stayed as it is then the number of web hosting companies could double before market saturation is achieved.

The problem is that web hosts may have to change their business models and strategies to tap into the remaining market.

ok, thank your very much for you information, you tell "web hosts may have to change their business models and strategies to tap into the remaining market", well i'm a small hosting company in Spain, a country with i think have less internet use of USA for example, so what it's your advise for this market? for me the question always it's the same, i'm best than big boys but how to tell the future customer? thanks

Pull out your marketing text books (if you ever took marketing) and read up on product differentiation. Web hosting might seem like a commodity service offering, but there is so much any company or a startup for that matter can do to set themselves apart and grab a niche.

What's a niche? It's a small portion of the larger marketplace that you can target and provide a special kind of service to, one that is not currently being met (or not being done well) by other companies.

Is blog hosting as saturated as the "general" shared hosting market is? I'm sure you can think of many other unique service offerings and find niche markets you can sell to.


JP

Finding the niche is possibly the hardest part of the business. It seems hosting is just an advertising and marketing campaign, no technical aspects or very little tech aspects involved.

I think locally is probably the best area to target. I;m going to start doing this a lot more too.

I don't know why everyone tries to over examine the market here or industry. Just about every market or industry I've been involved in complains about the same thing, example: comics, video games.... I guess its just a general tactic by the larger companies to scare away everyone else.