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  1. #1
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    Apr 2005
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    Over Saturated market

    Am I mistakened when I figure that the web hosting market is completely over saturated? It seemd as if everyone and their mother are selling web hosting. Am I wrong? Can money still be made? I have money to invest but am unsure if it would pay off.

  2. #2
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    No, its not oversaturated, however, if you become a web host, that will be 1 web host too many, so it will then be over saturated.

    j/k!

    Some might consider the market oversaturated, however, plenty new hosts can start up, market themselves locally, and succeed very well.

  3. #3
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    It is absolutely oversaturated !! There are around 100.000 hosting "companies" in the US alone. This market is very difficult. It is like the music industry: A million people try but make no money and a few people make millions.

  4. #4

    Re: Over Saturated market

    Originally posted by just21
    It seemd as if everyone and their mother are selling web hosting. Am I wrong?
    My mom's not selling hosting. I think my neighbor's dog might have just started up a hosting business though.

    It's oversaturated in the sense that there are more than enough hosts to meet the demand for hosting, but so many new hosts will fail and the market is so huge that there's still ample opportunity to be successful. I think it's becoming ever more important for new hosts to define their niche and focus on it.
    www.HowToSellHosting.com - How to start a hosting business (free download)!
    www.10-Free-Ebooks.com - Download 10 ebooks with resale rights

  5. #5
    The market for hosts willing to build a solid reliable service is NOT oversaturated. The market for cheap, sub-standard service IS.

  6. #6
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    I have two friends who are also selling hosting. No joke...

  7. #7
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    From the numerous sites I read I would guess 6 out of 10 hosts fail within 2 months.

  8. #8
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    Actually 6 out of 10 hosts do never really start. They just make a site, wait for customers, then realize that they get no customers and shut down their business.

  9. #9
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    Nov 2003
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    A host with some solid brains and planning behind it, along with start-up capital can still do very well. You need marketing experience though along with a few good Unique Selling Points and product differentiation.
    ManageMyServices was sold by me in September 2009. I no longer have any affiliation with this company.

  10. #10
    The other choice is to go for a niche and go there, Being local is one or prehaps catering your site to a certain demographic can also work
    www.corevps.com - Hosting with Integrity

  11. #11
    To give you an example of how much competetion there is in the web hosting industry right now, the top bid for the keyword "computers" on Overture right now is $1.68. The top bid for "web hosting" is $11.04.
    Not that it is any indication of the state of the market however it does show that there are a tremendous amount of companies competeting for customers.

  12. #12
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    Aug 2004
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    I think there is hardly any business that is more oversaturated than the hosting business. With the easy to use control panels and low cost reseller plans even monkeys can offer hosting.

  13. #13
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    Apr 2005
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    Atlanta, GA
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    anyone can offer it, but it takes experience and dedication to succeed.
    [color=#666666]Ackoo Solutions, LLC

  14. #14
    "anyone can offer it, but it takes experience and dedication to succeed"

    Agree 100 % with this

  15. #15
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    Aug 2004
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    Indiana
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    There is competition, but it isn't oversaturated in my opinion! NICHE NICHE NICHE!

  16. #16
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    There definitely is. You hardly find an efficient advertising source where you competete with less than 100 other host.

  17. #17
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    Nov 2002
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    Mississippi
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    Just having money isnt going to create a profit. If your looking to get a return on an investment go see a investment banker. If your looking to create a business that you put your time + money into then anything can happen.

    Online that may be ture with the advertising, but online isnt the only market. I compete with 2 other hosts that run datacenters here locally plus some rinky dink resellers. Only real compition comes from the datacenters and only with the larger clientel as they want your firstborn for payment...

  18. #18
    Originally posted by johnmacin
    The market for hosts willing to build a solid reliable service is NOT oversaturated. The market for cheap, sub-standard service IS.
    You have a good point but building a reputation means getting customers and if you are attempting to gain customers by offering what everyone else is offering then you are in the saturated end at least to start out with . Its been said even in this thread several times. It is about niche - offering applications or services that fit select customer needs that are not run of the mill. If your only pitch is based on space, bandwidth and price you will most likely drown.

  19. #19
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    Jul 2002
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    Kuwait
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    Originally posted by Ackoo
    anyone can offer it, but it takes experience and dedication to succeed.
    couldn't agree more! 100% correct.
    Bashar Al-Abdulhadi - KuwaitNET Internet Services Serving customers since 1997
    Kuwait's First Webhosting and Domain Registration provider - an ICANN Accredited Registrar

    Twitter: Bashar Al-Abdulhadi

  20. #20
    Well i think that the hosting market is very competative in ths day and age but the only way to succed is to have alot of advertising dollar and be prepaird to be very patient. The best way will be buying a established host with customers since you have a customer base and you may get word of mouth advertising from your customers.

  21. #21
    Join Date
    Sep 2001
    Location
    Texas
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    878
    A few comments...

    1) Just 2 years ago, you could have had success in selling, just from using the advertising forums here at WHT. I took a look in there the other day, and wondered how some people stay in business for a single month. If you offered dedicated servers for $1/year, somebody else would offer it for $0.50/year, while calling you expensive. Fortunately, those "webhosts" do not last long. The churn rate has to be incredible for the very-lowest-price hosts. However, the growth that DixieSys experienced when he did a "2 for 1" special (years ago) is now legend. His offering was not at the stupid level of today's crazy offerings. It was actually able to make a profit. IMO, it will not be repeated at WHT.

    2) I remember being in the #1 position on Google Adwords for months. We paid from $0.50 to $2.50 for the ads. We grew by leaps and bounds. Then, the pricing became crazy. I don't even consider Google for advertising, now. For us, it is simply not worth it. Some may say, "Choose your ad words carefully." That doesn't really help when there are 1,000 others doing the same.

    3) The market is over-saturated, but the customers are still there for a good hosting business. More people are wary of scammers on the net, now-days. They will look for stability.

    -Lamar
    Going out of business in our 10th year.

  22. #22
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    Oct 2002
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    EU - east side
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    I remember being in the #1 position on Google Adwords for months. We paid from $0.50 to $2.50 for the ads. We grew by leaps and bounds. Then, the pricing became crazy.
    There's rarely such a thing as crazy pricing, especially when it comes to a competitive system like Google Adwards. The price there simply reflects what it takes to be in business in today's world. The potential customer has asked precisely what he/she's looking for; there are few places where one can get such targetted traffic. IMO time is coming where true sales people become necessary.

    I've rarely seen a host with a site truly made to sell. Selling online means that your salesperson is your site. Ask youself, is your site a convincing sales person?

  23. #23
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    Texas
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    Originally posted by ldcdc
    There's rarely such a thing as crazy pricing, especially when it comes to a competitive system like Google Adwards. The price there simply reflects what it takes to be in business in today's world.
    I disagree with these statements. Sometimes it is the price where large companies keep the small and medium sized companies out. It does not reflect what it takes to be in business in today's world. We are working on our 7th year now, and we do quite well...without the help of Google, I might add. We have not used them for years. You do NOT have to advertise on ANY SE/Portal to be in business and be successful.

    -Lamar
    Going out of business in our 10th year.

  24. #24
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    Dec 2004
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    Downers Grove, IL
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    I think it's pretty obvious to anyone who reads these forums regularly that there is an abundance of web hosting providers. I guess you could call the market "saturated." However, if someone went out and randomly analyzed 100 hosts, I think they would find only about 20 - 30 who pose serious competition to one another.

    Anyone ever done this kind of research?

  25. #25
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    Aug 2004
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    Indiana
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    Originally posted by colklink
    I think it's pretty obvious to anyone who reads these forums regularly that there is an abundance of web hosting providers. I guess you could call the market "saturated." However, if someone went out and randomly analyzed 100 hosts, I think they would find only about 20 - 30 who pose serious competition to one another.

    Anyone ever done this kind of research?
    I'd be willing to say it's even less!

  26. #26
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    I disagree with these statements. Sometimes it is the price where large companies keep the small and medium sized companies out. It does not reflect what it takes to be in business in today's world. We are working on our 7th year now, and we do quite well...without the help of Google, I might add. We have not used them for years. You do NOT have to advertise on ANY SE/Portal to be in business and be successful.
    Wonderful points Lamar. My gripe (that got me a bit overexcited) was that one does not have to complain that Google Adwords or Overture or whatever advertising venue is too expensive.

    It is or can be too expensive for a particular business model. Not everyone can buy TV ads during the Superbowl, but you don't hear many complaing about that.

  27. #27
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    Texas
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    Originally posted by ldcdc
    Wonderful points Lamar. My gripe (that got me a bit overexcited) was that one does not have to complain that Google Adwords or Overture or whatever advertising venue is too expensive.

    It is or can be too expensive for a particular business model. Not everyone can buy TV ads during the Superbowl, but you don't hear many complaing about that.
    Ahhh. Now I get you. Point well taken, Dan.

    -Lamar
    Going out of business in our 10th year.

  28. #28
    Hello Everyone,

    I know that I don't post much but that don't mean I have not been around a while. I have been hosting for mostly non-porfit for about 3 years now, and when I decided 2 years ago to plan on making a business out of this industry everyone told me I was crazy because of this same statement "There too many hositng companies to make a dollar.."

    After reading, reading, reading, then reading some more, O'ya don't forget the research, I have found that the industry is mostly saturated with low budget, low tech supporting, lets get what we can companies. If a person wants to make a real company that provides a real service I have to agree with so many others...

    Find a niche
    Write a business plan
    Plan to succeed (mind set)
    Provide a professional attitude
    Most of all DON'T go after 1000 customers with 50% unhappy, target the number of customers you can handle and still have 100% satisfied customers. WORD OF MOUTH - Will Make You or Break You!!!

    Most of all have the personal internal understanding that this is not a get rich quick, overnight success scheme. Blood, Sweat, and MANY TEARS will be lost in the hours of no return, before a true company will arise to success. Expect to give more than you recieve in the beginning, with that mind set you will continue to push and make yourself a solid success!

    Lack of planning is success for failure!!!!

    Best of luck,

    Arch~Angel
    Last edited by Arch3Angel; 04-15-2005 at 07:46 PM.

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