Ok now bear with me a sec :-)

Is the hosting industry in the early stages of saturation?


1) Is the industry going downhill (with no brakes)? points against.?

their are around 4789 web hosts on yahoo alone? that very aggressive competion... right?

the .com boom.... blew along while ago....

resellers are more then ever increasing.


2)is the industry still profitable? points for.

the industry is expected to grow 6.9 billion in the next two years to 12.6 billion source:thewhir.com

1000's upon thousands of domains are still to be registered and are being registered...

but.....

I see some hosting pricing on these forums... and I laugh....

One example

reseller acount -$40

10gig
70 gb bandwith
etc etc...

Don't they know they are going outta business.... Is there hope for this Industry!?!?!

please post your views, Ideas,

BTW- I think the unlimiband.com is a good idea...

It was saturated, and probably still is a little bit, but with a lot of hosts closing its doors, I wouldn't be surprised if by March we return to normalcy (which btw, isn't a word)

Originally posted by akash
normalcy (which btw, isn't a word)

normality ;)

Originally posted by markcastle


normality ;)

ya but normalcy makes me sound like FDR :D

edit: (was it FDR???? i dont remember)

FDR? Whats that then? :)

Originally posted by markcastle
FDR? Whats that then? :)

........u must not be an american....

Franklin D. Roosevelt - president during the great depression, brought the country back to normalcy (i think) and is the only president to have served 3 terms.

Aha - IC.

Nope not American - English :D

Originally posted by akash


........u must not be an american....

Franklin D. Roosevelt - president during the great depression, brought the country back to normalcy (i think) and is the only president to have served 3 terms.


Can you really see the industry going back to normality?

like back in 97 when virtualis and a few % were the only companies offering reselling... Thats when there was phat cash to be made....

Originally posted by loaded



Can you really see the industry going back to normality?

like back in 97 when virtualis and a few % were the only companies offering reselling... Thats when there was phat cash to be made....

yes i can, march is the earliest i see this happening.

people just dont have $40 to start their own hosts anymore, and the sooner they realize that working with $25 isn't going to cut it, the sooner we return to normalcy (i love that word :D).

I also think that normalcy in 2003 is different from normalcy in 97. Nowadays, many customers enjoy a one on one relationship with their hosts, which is probably why there are a lot of "small" hosting companies (myself included). The ones that are killing the market are the ones that offer everything for a penny to the customers that want everything for a nickel (they're saving 4 cents)

OK. Back to topic.
You will find new people are still coming into this business and they are all getting some or other kind of business. Now the question is of quantity and quality. Even if your prices are higher and you are giving good service, people will divert to you. I wont agree that there is a saturation. People have become more professional.

I wont agree that there is a saturation. People have become more professional.


It is saturated. Look at the threads for the past 8 weeks. The number of new unheard of hosts - i'd need to use my little toes too :)

But its getting better, the number of hosts that have closed - i need two hands instead of the usual 1 to count them :D

So I take it you guys dont appreciate hosts that offer reseller services? ;)

Originally posted by faculty
So I take it you guys dont appreciate hosts that offer reseller services? ;)

oh no, i think it's a great idea as now "regular" customers are using reseller accounts to manage multiple websites themselves.

what i dont appreciate are the hosts that ruin the market for the rest of us

Well, I would say that with the current pricing of hosting service today and the tons of web hosters around, it does seems rather saturated.

However, it is not the end of the world, if you concentrate on niche market and specialization, there is still quite a lot of opportunities.

Ah right. so you dont like the type that purchase a server and give everything for $1 p/year? I see.. :D

Originally posted by faculty
Ah right. so you dont like the type that purchase a server and give everything for $1 p/year? I see.. :D

http://www.webhostingtalk.com/forumdisplay.php?s=&forumid=4

look at the post 100 GB HIGH QUALITY Bandwidth -$35



IN MY OPINION
were the *** is the profit margin.....

really if someone can tell me how he can be making a profit if someone actually used that much bandwidth

I'll give um 100gb of bandwith free :-) (don't hold me to just in case)

(and in europe to? were bandwidth prices are higher well in UK there are)

Yeah I see your point..


:)

Hello
I have noticed an increase in sales of high end reseller plans.

When we stopped doing the bulk accounts because we couldn't compete with the cheapies our reseller business almost dried up.
When we started offering more expensive reseller plans people seem to want them.
However, they are being bough by designers, or companies needing to host several web sites, not by people wanting to sell hosting as a product.

We just celebrated two years in business under our current name and I think the market is picking up after a few lean months.

However, if the US goes to war in November we could see another down turn in the US economy and the hosting market will suffer. I am supposed to be hiring staff but am putting it off till the Iraq situation is resolved one way or the other.

Gordon

I don't think the problem with webhosting industry is the number of webhosting providers. The problem IMHO is that webhosting became a commodity market, there are no customer loyalties, there is very little product differentiation and there are very few lucrative niches to expolit. It kind of parrallels to long distance phone market where customers are jumping carriers every few months to take advantage of any special offers that might be available at the time. If you have small to medium personal or hobby site it is not a major pain to move it to another hosting provider and people are doing it. This creates instability because many companies get on the bandwagon of price/feature wars.

quotefrom- GordonH {We just celebrated two years in business under our current name and I think the market is picking up after a few lean months. }

congratulations... I hope you have more years of success..

Customers are getting smarter...

for example:

used car industry......

customers are educated to NOT buy a car thats dirt cheap with high milage and countless problems...

same goes for our industry customers are already realising Unlimited bandwidth is not a good thing...
a cheap host will have 200 - 300 hosts on one server... and they realise.... that there'll be countless problems....

Originally posted by loaded

a cheap host will have 200 - 300 hosts on one server... and they realise.... that there'll be countless problems....

Umm....
We rent a dedicated server to a cheap hosting company who put 1500 accounts on the same type of server we would put a max 250 to 300 on.

Be afraid, be very afraid.

Gordon

Originally posted by matrosov
This creates instability because many companies get on the bandwagon of price/feature wars.

You have a very vaild point...

This creates instability because many companies get on the bandwagon of price/feature wars.

for example the advertising forums here.
A possible client will post a request for a quote and

company A will offer $30
company b will offer $25
company c will offer $20
and so on...
till the price is below profit... and they'll still go lower....

Were's the mentalilty here!?!...

Theory...We put absolute max of 100 sites on a server
Practice.... Never gets above 50 :D
Hosting plans cost a lot more, but people buy them.

Originally posted by matrosov
The problem IMHO is that webhosting became a commodity market, there are no customer loyalties, there is very little product differentiation and there are very few lucrative niches to expolit.

There are niches!! It's just a matter of finding them.

Originally posted by loaded


You have a very vaild point...

This creates instability because many companies get on the bandwagon of price/feature wars.

for example the advertising forums here.
A possible client will post a request for a quote and

company A will offer $30
company b will offer $25
company c will offer $20
and so on...
till the price is below profit... and they'll still go lower....

Were's the mentalilty here!?!...

Seen a thread where one user wants a $5 month plan. After 4 host replys, it ends up as $2.50 a month for 2 gb and 500megs which dont really matter but $2.50....

common, there isnt not profit at all after the transaction fee. You would be left with about $2.

Maybe you could buy me a pie today and i will spare you a room in my house next month when you see that the profit your making wont even attrack tax around you.

Originally posted by markcastle


normality ;)


Either or, really:

nor·mal·i·ty Pronunciation Key (nôr-ml-t)
n.
The state or fact of being normal; normalcy.

:)

Back on topic though, I think that the bottom end of the market is saturated, but is also the most unstable. If history is any indicator, the vast majority of bargain hosts opening their doors now won't be around in a year's time.

-Bob

Originally posted by TMX

I think that the bottom end of the market is saturated, but is also the most unstable. If history is any indicator, the vast majority of bargain hosts opening their doors now won't be around in a year's time.

-Bob

So true,

but having said that if you can get a solid business plan together to sell budget hosting you could possibly do it...

you'd have to play with numbers and pssible senerios

but...

IN MY OPINION!

most budget hosts don't have any sort of business plan .... they just make up prices with no real indication of profit / loss... Most hosts that advertise in the forums... make up the prices when they see a possible client's post...

it makes me think wether they even have the knowledge to provde basic support....

Another problem with this industry is that it lacks regulation. I don't mean regulation from the government but rather self regulation. You look at any other industry and there are industry groups industry associations etc etc. Companies in those industries hold semi annual meetings where they create norms and guidelines for selfregulation and share some of their expertise while not jeopardizing their competitivness. Webhosting on the other hand looks like wild wild west.

Oh btw, for those interested in FDR, here's a link. (http://www.whitehouse.gov/history/presidents/fr32.html)

Originally posted by markcastle

There are niches!! It's just a matter of finding them. [/B]

I agree. We target small business owners, and charge quite a bit more than many hosts here. We also provide service.

I had a couple of clients leave for cheaper providers over the past few months, but guess what? They're back again.

If you can become established in your local area, do things right, and provide good service you'll gradually build up a loyal clientele who will recommend you to their friends.

However, it won't happen overnight. You probably have to be prepared to lose money for a while. And make sure that you can rely on the company providing your server.

If you try to charge premium prices using cheap servers with poor connections and poor support, you're in for a lot of grief.

Originally posted by akash
ya but normalcy makes me sound like FDR :D

edit: (was it FDR???? i dont remember)
It wasn't FDR, it was Warren G. Harding, who ran one of the (if not the) most corrupt administrations in American history (eg. Teapot Dome Scandal). When running for office, his slogan was "A Return to Normalcy."

Hope this helps ;) .

Originally posted by beernuts

It wasn't FDR, it was Warren G. Harding, who ran one of the (if not the) most corrupt administrations in American history (eg. Teapot Dome Scandal). When running for office, his slogan was "A Return to Normalcy."

Hope this helps ;) .

thanks.....maybe i should retake ushistory :rolleyes:

Originally posted by matrosov
Another problem with this industry is that it lacks regulation. I don't mean regulation from the government but rather self regulation. You look at any other industry and there are industry groups industry associations etc etc. Companies in those industries hold semi annual meetings where they create norms and guidelines for selfregulation and share some of their expertise while not jeopardizing their competitivness. Webhosting on the other hand looks like wild wild west.

Most of those "industry regulation" groups end up being an anchor around the neck of the industry after a while due to corruption, kickbacks, and other things like that.

I fail to see the problem.

If someone wants to price themselves out of business, let them. I guarantee that the customers of these "One-dollar wonders" will decide (when the company goes bust) that they need to either NOT have a website anymore (unlikely in the case of companies) or that they need to pay more for the service.

Links on Harding (http://www.americanpresident.org/kotrain/courses/WH/WH_In_Brief.htm)


Another one (http://memory.loc.gov/ammem/nfhtml/nfexpe.html)

What i wonder is..where are the hosts that offer those ridiculous no margin prices at, when a thread like this starts?

Would be VERY interesting to see someone argue against everyone else in this thread...

I myself believe in quality, which cost a little bit more but you will gain on it in the long run.

/xeno