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  1. #1

    The Hosting Industry, something to think about

    Hello everyone,

    Thank you for checking out our post!

    The hosting industry over the past few years has become wildly saturated with new competition. As far as any reasonable comparison goes, the industry has mutated into a web of intertwined agencies and organizations, corporations and sole-proprietors trying to take a bite out of the industry, and thus we are left with what we have today. This issue is not alarming in general, but the problem has been amplified by the easily accessible reseller packages and cheaper than dirt Celeron servers our high school students are picking up. So what are we to do now that we are confronted with this problem?

    Most owners and employees would concede there is no problem; this is the fact of the industry, and basically a simple fact of our type of economic system. We strive on competition, and if competition drives the market, then we in turn should be thankful, no...we should be praising the heavens for so many great competitors. But upon further inspection, who does this competition really satisfy in the end? Is it the decent hosts, who own their own servers, deal with their clients day in and day out on a personal basis? No, it is the conglomerates of the industry that pick up our dirty pieces.

    With every poor hosting contract there is borne a bitter customer! Our customer, everyone's customer, and we are all losing because of this. When a poor host, in general, attracts a customer and fails this customer, the entire bracket this host came from is frowned upon. Most of us in this forum are apart of this bracket; the bracket which lacks the 50,000/month advertising budget, and therefore are lumped together with these poor slums. When in fact upon further inspection we are not all the same, obviously, and we have much to contribute to the market, given the opportunity.

    Basically what this amounts to, is the poor host, the high school students, the part-timers, the people trying to make an extra buck are hurting us all. All of their bitter clients are moving directly to the most visible of hosts, the hostgators, the network solutions, the godaddy's, all the while we decent hosts suffer the loss of some very good clients.

    What does this mean, what do I suggest? In the end, there is very little that can be done about this, because the irony is, we sell these poor hosts the ability to be what they are. We sell them our reseller packages and our Celerons so we can make an extra buck off of their ill conceived notion that the web hosting industry is a walk in the park, and sometimes we do well doing this. But, we end up sacrificing deserving, long lasting clients, for these one-year wonders who want to start their own cool gaming server, or mom and pop web hosting businesses, etc.. But there is a very small thing that we can do. We can discourage them at every chance we get, discourage those who are obviously not cut out for this business. Those who say, how many sites can I have on my server, or how much money can I make from 10 clients, etc. Encouraging these sorts of hosts is only going to further breed the present problem, and eventually we will all suffer for this, and will be out of business.

    I hope you find this interesting enough to think about. Thanks for reading.



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    Last edited by SoftWareRevue; 10-22-2005 at 05:18 PM.
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  2. #2
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    What is this, some sort of promotional piece?

    I hate to disagree with you, but I have to. Anything can be twisted negatively, but I don't think these folks are making things worse for us. Sounds to me like you're tired of fighting, that's all.
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  3. #3
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    Hi,

    After reading your entire post, I have to agree that you do have valid points but the truth is there is no such thing as fair competition. There always will be the big companies and if you're not the biggest company out on the net, why not try doing some local advertising instead, I know of hosts picking up good business from local small businesses/medium businesses and are taking in more revenue than many reputable hosts online.

    There is no problem in selling reseller packages and I find that in most cases they're not just for those wanting to start a hosting business, many simply sign up because they want to host friends, start a community, etc.. and as for the cheap celeron servers, the low end servers will always be available and for a long time to come, people do purchase them and they're decent enough for many to host their own personal sites, or maybe just to play around with it and gain more knowledge and experience with the OS/CP. While some do choose to host clients on them, they won't be able to fit too many clients on them and eventually will be forced to upgrade once they have enough monthly revenue coming in.

    In my opinion reseller packages and low end dedicated servers are great opportunities for users on a tight budget to start their own project/business and if they put enough time and dedication into it, they'll probably have good return as well.

    As for the part regarding $50,000/monthly budget on advertising, that is completely up to you and I've known businesses that started with $0 advertising and growing into good sized hosts just from word of mouth and ofcourse that's becoming harder as the market is much more saturated now adays, but if you work hard on gaining local customers, that shouldn't be a problem. Just get the word out.

    In every business there will be many new ones opening up each day, and others closing, for example, I've seen many restaurants open in my neighborhood in the past 2 years and some opening and closing in less than 2 months. It's part of all businesses, if you think this business isn't for you then I'd suggest getting out of it as quick as possible or change direction immediately, but I'm sure if you get everything together and find your niche, your business will flourish and these smaller hosts probably won't have any effect on you at all, and as for the big hosts with the $50,000 budgets, chances are you won't be affected by them either if you provide good service to your customers and better yet get to know them well or know them personally.

    Anyhow, good luck with your business.
    I respect your opinions on this and wish you the best in the future!

    Cheers
    Last edited by Cirtex; 10-22-2005 at 05:24 PM.
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  4. #4
    Thanks for the response: This is not a gripe, this is a position on a paticular aspect of the market, expressing the need for more research among beginning hosts.

    To point out that we should do local advertising and that celeron servers have their position on the web are good points, but It isn't whether reseller accounts are useful, or whether celerons can be used for good that this post is concerning. Those are obvious points, which have very few reasons to be spoken of.

    Encouraging those with talent is the point, and discouraging those who will degrade the industry with poor standards is the main idea. Perhaps this is a hosting utopian ideal , but it never hurt to consider hypotheticals in order to derive reasonable solutions.

    Thanks again.
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  5. #5
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    There is a difference, though, between hypotheticals and impossible hypotheticals. I am assuming you're for regulating the industry to death?
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  6. #6
    Interesting, I don't consider any hypothetical an impossible hypothetical, unless of course it is impossible lol .

    But I don't want to get into semantics.
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  7. #7
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    hypothetical = Suppositional; uncertain

    Therefore, an impossible hypothetical would be something that can't happen, under any circumstance, mucho differante from just plain hypothetical. See?

    lol (I think!)

    Honestly, no hard feelings. I just disagree with your viewpoint, that's all. But I do respect it.
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  8. #8
    Right, can't happen...I am and I am not. Impossible. Quality new hosts...unlikely, but not impossible lol
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  9. #9
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    I don't see any problem with regulating the industry. In fact I would welcome it.

    Any hosting company should be required to have a registered business and should be required to conform to a set of standards.

    Any host that would dispute this is more than likely in the category that the OP is referring to.

  10. #10
    Originally posted by blue27
    I don't see any problem with regulating the industry. In fact I would welcome it.

    Any hosting company should be required to have a registered business and should be required to conform to a set of standards.

    Any host that would dispute this is more than likely in the category that the OP is referring to.
    Should be required? I thought it already was required?

  11. #11
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    Originally posted by blue27
    I don't see any problem with regulating the industry. In fact I would welcome it.

    Any hosting company should be required to have a registered business and should be required to conform to a set of standards.

    Any host that would dispute this is more than likely in the category that the OP is referring to.
    Agreed, long time ago I created a thread suggesting something similar, but ofcourse is hard to do it. Every body has the right to create any kind of business, some of those required you to have a Health License and inspections for example, but hosting companies seems that don't need anything to start with.

    And for that reason is that we see a lot of kids and people without any experience getting into it and damaging the hosting industry reputation. What can we do about it? if there is no regulation then all we can do is create our own good reputation, i have customers coming and asking for estimates and going with other companies offering $1 a month deals, they always comeback to us or maybe to another company that has a good reputation also.

    So the fact is, there is not regulation, anyone can do it, lets just do it better than anyone else and make a good reputation.

    Regarding the big corporation, that happens on any industry, you can't fight directly with them, but there is a huge market always open that big corporations can't get, the sucess is to find that market that is normally around you, your neighborhood your local merchant of commerce, your local SBA.
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  12. #12
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    I myself feel everyone so far has good points and bad points in this topic.

    While there are those hosts who lack the knowledge to foster a good business practice there are also those who at that same time want to learn and wish to start out properly (small and grow in due course). If we (as the industry) regulate it to the point where new businesses would be guaranteed to fail what good has occurred? None. The whole point being we as providers should not be set out to just blatently judge any person or forming company but should be open minded rather.

    At the same time we all also need to be both open-minded and promote research and common sense to that of the market (WHT makes for a very good start to this). There any many, many good providers out there and than we have the bad ones it's not up to a host to scorn another (look at the recent datapacket thread of what their dodgy tactic shows). We're all to be in competition yes but at the same time we all need to be mindful of the "big picture." While these mom and pop hosts and hobbiests can harm the industry some of them may show potential and become the next site5, hostgator, or godaddy (granted IMO godaddy is best for domains not hosting, of course it's just that an opinion not factual, based on reviews posted over time).

    In conclusion the whole problem isn't that of just regulation it's also that of planning, marketting, and many other aspects. Both small and large businesses do survive (it's been happening for years hasn't it?), so who's to say we should be over scorning small business (I'm sure many of us fall into that category do we not?).

    While the OP may be right in some aspects blue27 may be right in others. We all need to see that there are many aspects behind this whole "web company and internet expansion." With growth comes problems, it's how the market reacts in general that is what is going to decide the future of the market.

    ---
    Obviously this is just my own view on this topic, however I did feel it needed to be shared, take it as you will.
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  13. #13
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    I am not sure if it is required to be a registered business, but if it is, then it should be enforced.
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  14. #14
    Originally posted by HostRefugee-Vince
    I am not sure if it is required to be a registered business, but if it is, then it should be enforced.
    depends on where you live.

    Legally(edit - in the usa) it can be filed with your personal income statement, but I agree with that if you are trying to 'start a business' you should make it official at least.
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  15. #15
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    IMO the bad, unscrupulous hosts have a role. They are black sheeps that make the white ones seem even brighter.

    As for regulation of the industry as a whole, I don't see why, and more importantly, how. The simple solution to the problems we see online in general and in the hosting industry in particular is (IMO) to upheld and enforce the current laws, and this is the role of the authorities of each country.

  16. #16
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    Re: The Hosting Industry, something to think about

    Originally posted by goodydomains
    With every poor hosting contract there is borne a bitter customer! Our customer, everyone's customer, and we are all losing because of this. When a poor host, in general, attracts a customer and fails this customer, the entire bracket this host came from is frowned upon.
    I'm not sure that I agree that this is a problem. After a customer gets burned once (or twice, for the slow learners), he is more likely to choose a host that charges a bit more, and therefore with higher margins on the account. If you offer quality service, you'll gain the customers that others lose.
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  17. #17
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    Originally posted by ldcdc
    IMO the bad, unscrupulous hosts have a role. They are black sheeps that make the white ones seem even brighter.

    As for regulation of the industry as a whole, I don't see why, and more importantly, how. The simple solution to the problems we see online in general and in the hosting industry in particular is (IMO) to upheld and enforce the current laws, and this is the role of the authorities of each country.
    You nailed it on the head! I agree with you, that they make good hosts look better!

    And I agree on your second point too! Regulation of the hosting industry would be stupid and naive on the part of those who do it and hope for it.

    To address some other posts in this thread- yes, you are required to be a registered business if you're a host. Also, what aspects would you regulate? Pricing? Features offered? The whole regulation thing is ludicrous, and I'm sorry I even brought it up. I didn't know there were folks crazy enough to want to do that here. But I guess those are the ones that are afraid of competition.
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  18. #18
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    Originally posted by mynameweb
    You nailed it on the head! I agree with you, that they make good hosts look better!

    And I agree on your second point too! Regulation of the hosting industry would be stupid and naive on the part of those who do it and hope for it.

    To address some other posts in this thread- yes, you are required to be a registered business if you're a host. Also, what aspects would you regulate? Pricing? Features offered? The whole regulation thing is ludicrous, and I'm sorry I even brought it up. I didn't know there were folks crazy enough to want to do that here. But I guess those are the ones that are afraid of competition.
    I am not scared of compeition by any means. I just care about consumers and think there should be some sort of protection for them. I don't want nazi-like regulations, but some simple regulations that will deter 10 year olds from getting into the business.
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  19. #19
    Originally posted by HostRefugee-Vince
    I am not scared of compeition by any means. I just care about consumers and think there should be some sort of protection for them. I don't want nazi-like regulations, but some simple regulations that will deter 10 year olds from getting into the business.
    We've all seen even reputable hosts facing problems and losing customers.

    The best for the customers would be to: 1. separate their domain with the hosting account (especially if they go with cheap hosts); 2. Pay a bit more so they can expect a bit more.

  20. #20
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    Originally posted by miniRank.com
    We've all seen even reputable hosts facing problems and losing customers.

    The best for the customers would be to: 1. separate their domain with the hosting account (especially if they go with cheap hosts); 2. Pay a bit more so they can expect a bit more.
    Couldn't agree with you more.
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