I was talking to one person telling him about 555. He said and i quote "I dont know why you bother, web hosting is a dead business now-a-days"

Do you agree, i personaly think that with enough contacts and enough determination you can get to the top.

why did he tell you this ?

Most likley because his host didnt take off and crashed to the ground, and i acctully got mine started more than him.

It's not dead... Just way too much competition.

Yeah, their has to be millions of hosts, at least 700 good hosts.

As far as I know there are 50.000 real hosting businesses in the USA alone if you do not count the designers, storage providers, email only providers etc.

Quite a lot, but i'm talking about good ones, with lots of customers.

Quite a lot... I am hosting like 3000 domains and according to webhosting.info there are like 1800 nameserver domains with more entries. I would say there are at least 2000 to 3000 companies with more than 1000 customers.

Web Hosting Dead? No It is very difficult to get into. Lets say its easier to get into the Web Design feild then it is into the hosting feild.

Let's face it, webhosting = commodity. this ain't 1999 no more.

Its not that its dead, its that most people are looking for free hosting instead of paid.

He said it because from an outsider looking in it is dead. You'll get another perspective here because everyone here is involved in the industry but Web hosting is stagnant. For most hosts - Its space, bandwidth and support (with everyone making the same claims on support).

Unless you burst that mold the only thing you have to compete on is price and ANY business where you have thousands of people competing on price is a dead business.

Its time for a progression/revolution or whatever you want to call it. I've never understood why there is so little cross selling in this business. Analyze everything that goes with hosting and its stunning what hosts don't supply either directly or in strategic agreements with other companies

Where would be the most opportune place to hook up with a web design company? Your host.

Where would be the most natural place to learn web design or get training resources? Your host.

Who should naturally supply all the pieces in ecommerce? (granted this one some of us do)? Your host

Where would be the natural place to buy web design software (both online and offline application)? Your host.

Hosts should have value added services for all those things plus the hosts should be where you first look for shopping carts (besides the usual GPL suspects), help desk software, billing software and everything else site related. The hosts can't of course have all that expertise but theres no reason they should not have partnerships that provide the services and derive additional profit from the partnerships. Bandwidth and space are dead. Time to take the next step and look to value added resource add ons.

You can make money in a dead business if you are already in the business but you have to have something else to offer if you are just stepping through the door.

Originally posted by BHNSupport
Web Hosting Dead? No It is very difficult to get into. Lets say its easier to get into the Web Design feild then it is into the hosting feild.

IMO the problem is that it's TOO easy to get into.

Easy to get into, hard to differentiate. And that's the ticket to success right there.

The need for webhosts isn't going to go down, so webhosting will never be dead.

Derek makes a good point above.

The startup costs to get into hosting can be as little as $1 if you are an e-bay lover. Understand this is not the way to do it properly, but that's the truth on startup costs.

With advanced control panels (again not to do it rightly) just about anybody that has had some time on a computer can figure out how to go ahead and create accounts without having to know anything about a server.

$10 more will get you 10,000 templates to choose from for your webhosting site.

The hosting business is far from dead, it is in fact still growing, but it's flooded. Now what do we do in a flooded market all you marketing lovers?

We make ourselves stand out.

To the OP: The one thing you need to find is your niche market. Once you find that market, ask yourself how you can make your hosting different than everybody else's for them. Once you figure that out, find out where they would go to look for hosting and advertise there.

;)

Originally posted by thesimpsonsjohn
I was talking to one person telling him about 555. He said and i quote "I dont know why you bother, web hosting is a dead business now-a-days"
Maybe that person just didn't have the skillset to make it in the hosting business? It's a tough business, no doubt, but it's far from dead. :)

I've heard the argument over and over again: it's very easy to enter the web hosting business. No, it's not!

What is the percentage of resellers that really make it? How many resellers sell 100 accounts on their first year?

What is a web hosting business? Does a reseller, with a website, a paypal account, 10 customers, qualify as a web hosting business? Do you consider him a competitor?

Is webhosting dead?
I hope not or we are all Doomed ! :roll2:

I think you will find several thousand hosting companies across the world that would beg to differ. In fact their bank balances likely speak for themselves.

As in any business, hard work, client loyalty, and general love for your service/product will see you good ;)

Is web hosting dead? ... No.
Is there fierce competition? ... Yes.
Do many startups fail in this industry ... Yes.


I liken web hosting to running a lemonade stand (or playing the old lemonade stand computer game). All us hosts have the same raw ingredients (drive space, bandwidth, servers). It's how we market it, how we price it, how we apportion it, and how well our customer service is that determines our ultimate success or failure, which is measured by profit for most companies.

Sell your lemonade just above cost, and you'll get lots of customers, but will work hard for small profits. Sell your lemonade too high priced, and you'll have a few high end customers, but one leaving for another vendor will hit your company hard. Find the right mix between price and service, and you'll have a happy and loyal majority summer after summer. :)

:)

- John C.

http://www.familysweeps.net/lemonade/lemonadestand.html

Originally posted by thesimpsonsjohn
Quite a lot, but i'm talking about good ones, with lots of customers.

You can be good without having lots of customers. It's rather about seriousness, experience and quality.

Originally posted by Eu1net
I've heard the argument over and over again: it's very easy to enter the web hosting business. No, it's not!

The problem is that a lot of folks THINK it's easy to get into the web hosting business, so they make the jump, find out how difficult it is, and become another defunct fly-by-night company. Every time this happens, it damages the web hosting industry as a whole.

Originally posted by Eu1net
I've heard the argument over and over again: it's very easy to enter the web hosting business. No, it's not!

What is the percentage of resellers that really make it? How many resellers sell 100 accounts on their first year?

What is a web hosting business? Does a reseller, with a website, a paypal account, 10 customers, qualify as a web hosting business? Do you consider him a competitor?

I think we're on different wavelengths.

The fact that there is a low barrier to entry is not nearly the same as saying it's easy to succeed.

In fact, the low barrier to entry makes the % of people who do succeed lower.

Easier to enter, harder to differentiate/succeed. They are different, and are not mutually exclusive.

Generally, if there are more barriers to entry into a marketplace, it's easier to succeed after you have broken into that marketplace (but harder to breakthrough). If there are fewer barriers to entry in a marketplace, it's harder to succeed after you have broken into that marketplace (but easier to breakthrough).

If there are marketplaces with low barriers to entry that are easy to succeed in, typically that marketplace will soon become flooded with companies. If there is a marketplace with high barriers to entry and low chance of success after breaking that barrier, it makes no sense to go into business in that marketplace.

The idea is to innovate to create a new marketplace, which would then have the desirable low barriers + easy to succeed after breaking into the marketplace.

Not dead per se, just awaiting an evolutionary event to grow a pair of legs- could be upstream providers changing the bandwidth pricing paradigm, cable providers and Microsoft OS advancement /integration, stratification of the internet into more highly defined business and personal layers, a high degree of consolidation and acquisition activity amongst the top tier providers (already going on) - creating new retail and wholesale pricing models and large groups of nomadic resold refugees- (there is a wall at 100k customers ;) acquisition costs are a huge driver of company sales ) or just a plain old maturation of the customer segment en masse beyond the price to value model-resulting in more experienced to new customer ratios. Whatever happens, the only sure thing is that something will. At the end of the day there will be fewer, but larger hosts with greater product and pricing parity, more mid-sized hosts (30-50k customers) fighting for the large host cast always and fewer, albeit better resellers and a new breed- the premium small provider to long term customers- these guys have dedicated servers (less than 50) custom service and support and a value based, and possibly annuity strucutred pricing models which resonate up-market as well as down. Entry barriers will stay about the same though much like Moores’ law is to chip speed, marketing costs will continue to increase exponentially every year to the point of far exceeding predictable success models associated with entry.

I believe strongly that web hosting is not dead I myself have quite a few loyal cusomters the thing that forces most companies to shut down is the crap service they offer your business can not be fully trusted if you resell the services of other companies. I have found that most companies just buy dedicated servers then host from them it is good in thoery but then you have no control of the actual systems or the lines they run on. I myself own my own data centers in Dallas Texas and Brisbane Australia. It might not seem like having your own systems will help but trust me it does because them the clients know you are serious about what you do and that if something goes wrong you have physical access to repair it.

Originally posted by derek.bodner
I think we're on different wavelengths.

The fact that there is a low barrier to entry is not nearly the same as saying it's easy to succeed.


I don't agree with the definition of web hosting business that you're using. A business is not a hobby or a part time job. So, it´s not easy to enter the web hosting business.

Do you think that a reseller that sells 2 web hosting accounts per month for $5 each is part of a web hosting industry? How many of those do ENTER the web hosting business? Less than 1%.

They are great customers for those that sell reseller accounts.

I agree with Eu1net, However I also believe anyone can get into the so called "Hosting Industy" however it takes time and money to stay there. Though most hosting services out there are not ran by true companies but rather by internet users to make a little extra cash these services are good for private use and private hosting however they wont stand up to the corporate market. I tend to stand by this statement I forget where I heard it however it goes like it "One persons failure is another persons success" aka it means If one company loses a customer another one gains it.

hosting is alive and kicking. its just not as easy as it used to be

Hosting isn't dead.

Hosting is one of the easiest industries to enter, but one of the hardest to stay in ;)

Hosting isn't dead ... it is growing.

There are tons of companies that still don't have websites.

Just pick up your local phone directory (yellow pages). All those credit card sized ads with no URL .... those are people who spend hundreds a month for those yellow pages ads and many of those companies don't have a website .... yet.

A couple weeks ago I was talking to a new client (on the phone) and he commented that "alot of people are getting hooked up to the internet now" ... (i was thinking hmmm ... that is what i was saying ten years ago ... lol)

With regard to web design it is going to be even bigger ... because people redesign their sites (when you combine the new with the redesigns ... look out).

Originally posted by Eu1net
I don't agree with the definition of web hosting business that you're using. A business is not a hobby or a part time job. So, it´s not easy to enter the web hosting business.

Do you think that a reseller that sells 2 web hosting accounts per month for $5 each is part of a web hosting industry? How many of those do ENTER the web hosting business? Less than 1%.

They are great customers for those that sell reseller accounts.

First, where did I define a webhosting business?

I never said that was a legitimate webhosting business. All I said was that there were low barriers to entry. Obviously, you need to do your work to succeed. But, relative to other industries, there is a significantly lower barrier to entry. And that does have an impact on the # of legitimate businesses that sprout up.

Second, you may not consider them legitimate businesses, but there are a large number of resellers hosting 30-50 accounts. And while that may seem insignificant, when added up that is a lot of potential clients "legitimate" businesses are losing out on. That just increases the rate of failure after breaking the barriers to entry for legitimate businesses.

[B]IMO the problem is that it's TOO easy to get into.


Thats the whol ball game there. It is too easy to get into and the only way to break that trend is to offer things that the easy entrance hosts can't follow with that same ease.

As for those making a distinction between hosts that make money and those that don't - it really doesn't matter. They are in the business the moment they have a website thats open for business.

If you walk into a mall with 20 shoe stores selling the same thing on price you got a problem opening store number 21 unless you offer something different. Doesn't matter one whit that the others aren't making money and fail. Its a revolving door. As they leave new ones destined to fail are coming through the door.

The issue is that demand is flattening off and the number of providers is still increasing.
BUT, the potential profits are decreasing which will eventually reduce the number of new providers starting out.

It is an extremely difficult market out there at the moment and i would never have been able to start up in this type of environment.

What we have is a situation where the early adopters of web hosting are committed to having a site but are moving to the lowest priced options they can find.
Those who came to having a web presence more recently are questioning the need to have such a presence and are scaling back internet involvement.
This is partly because the complexity of competing with big sites and the difficulty of getting into search engines is making new sites less likely to succeed.

I know of one host with 100 telephone sales staff selling hosting from a call centre and doing massive press advertising who are only just holding their current size.
There is no real growth.
Possibly if the economy improved (in the US) things might improve.

Providers are having to spend more and more to attract customers in terms of advertising spend and freebies and more features.
We are moving towards having a free web site builder (web based) with every account. This is costing the same as the salary for two average employees per year to implement.
It will likely not increase sales by the same amount.
We are moving our cheap brand into massive hosting plan sizes which has meant new quad processor servers for this purpose and a lot of work to redesign the site and implement the new set up scripts.

Overall this is my view of the state of the market:

More work, less return, lots more sh*t from customers

I started in the web hosting business since 1998

I went huge around 2000-2001 where I would have a whole year or more of almost 10-30 clients per day.

I peaked around the middle of 2001,
slowly it started to change to
5 clients a day
4 clients a day
2 clients a day
0 cients a day
1 client a day
new clients


from then on its all maintaining the clients
since now 2005


I do not promote the web hosting business anymore, theres too little return on the advertising, the people are fickle, and
$10 isn't much anymore.



As in any business ,once the business matures,
the return on investment becomes miniscule,

the people fighting out for returns needs to be very innovative.

Un fortunately, i'm done with the web hosting business, I just keep the current clients I have and bill them.

I'm working on other businesess for now,

Theres always a stage when the opportunity has passed and its time to move on.
And in web hosting

the GOOOD/GREAT money is gone,
the only money left is as Hostroute said, grouchy clients with lots of work and little return :)

I'll agree - if you are trying to compete with the budget hosts and large players that can leverage capital to outprice and out advertise your small hosting business. However, we have found a growing market for higher priced service oriented shared and managed hosting that a smaller company can often excel at due to more flexibility and a willingness to exceed expectations with personal service.

We have seen steady growth year after year since 1995, and it's almost all organic growth through word of mouth and strategic partnerships. It takes hard work and a commitment to service that is as high paced as they come, but the benefits are great, even today, and from what I can extrapolate, the next few years and on.

The sub $10/month hosting crowd, sub $20/month reseller programs, and sub $100 dedicated server market is very crowded, and so competitive that customers are easily able to switch hosts, look for the cheapest deal, etc... as their is little differentiation from one outsourced support company to the next. Even "in-house" remote support techs are similar from host to host, so loyalty is hard to come by. The larger players push $$ through advertising and buy-outs to keep going, but the small host is getting squeezed from all sides in what is almost a true commodity market.

- John C.

IMO it all comes down to attitude, belief and perceptions.

<insert 2 pages of Tony Robbins gabble here> :D

I look out into my targetted marketspace, and see fields of green, as far as the eye can see. I'm a glass_half_full kind of chap, rather than the glass is half empty. Maybe one day my tiny brand becomes a true aussie household brand, but as my dad said to me once, "small fish are sweet". :gthumb:

Is webhosting dead? YES IT IS.

Now go out and spread the word so everyone else will fold their tents and go home and I can be the last host standing. ;)

Originally posted by will7
Hosting isn't dead.

Hosting is one of the easiest industries to enter, but one of the hardest to stay in ;)

Yup anyone can start a "web hosting" business, but not many can make it after the first couple of months.

Technology can never die! It can only get better. :)

I think that websites still have lots of potential, and though the market is extremely saturated, anyone with a unique idea and a strong conviction can still find themselves some clients. There are a lot of untapped and unformed niches which still exist!

Its just upto us to find them & exploit them to the fullest! :)

[GOLDEN RULE: Be Optimistic! See the better side of the world, believe me it does exist.]