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  1. #1
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    Who is responciple for Hosting market crash?

    It is because of new comers who start the hosting business with just 500$. They buy a VPS or dedicated server for $100 and fixing the fancy price to cover the market, one fine day they will close the business with nothing.

    Now the average price is $3 with unlimited space and domains, It may be ok for bulk sellers like Godady. But what about small players who have around 500 customers.

    what is next, FREE ?
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  2. #2
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    Quote Originally Posted by mioot View Post
    It is because of new comers who start the hosting business with just 500$. They buy a VPS or dedicated server for $100 and fixing the fancy price to cover the market, one fine day they will close the business with nothing.

    Now the average price is $3 with unlimited space and domains, It may be ok for bulk sellers like Godady. But what about small players who have around 500 customers.

    what is next, FREE ?
    The fittest will survive mate. As you said the big players won't have any problem. Some one new come and start with cheap plans to make money fast, won't be able to cover their own costs and may crash. Any ways one thing is sure if service and support is not up to the quality, it is very difficult to keep things going though they set very cheap plans. Seems this is the problem of people who don't believe in gradual build up. They have two pints only in their mind the starting and the peak. They don't like the steps in between.
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  3. #3
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    The hosts you mention will probably disappear, meaning that there's always room for quality hosts out there.

    Plus the average customer turnover on a "cheap unlimited host" is much higher than a quality non-overselling one.

    At least for us, we don't tend to get customers leave us for "cheap unlimited hosts" all that often. We did once recently, but they came back in a week's time
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  4. #4
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    I assume the main idex for the web hosting is the quality and if web hosting is the part of the business people will give that a value and will continue pay.
    That is overselling dumping and I hope that this crisis will kill it
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  5. #5
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    Quote Originally Posted by mioot View Post
    It is because of new comers who start the hosting business with just 500$. They buy a VPS or dedicated server for $100 and fixing the fancy price to cover the market, one fine day they will close the business with nothing.

    Now the average price is $3 with unlimited space and domains, It may be ok for bulk sellers like Godady. But what about small players who have around 500 customers.

    what is next, FREE ?
    New, emerging hosts that will survive are those with the dedication and motivation to run a web hosting company. Those that pour their dedication and effort, are a lot more likely to survive than those that see hosting as just another way to make a quick buck. A lot of hosts founded today have that mentality, so because of this mentality, they will most likely fail because these hosts aren't likely to put in the effort and dedication.

    It also really helps if the owners are really passionate about web hosting, and know how to support their customers while requiring minimal help. Experience is the key here.

    A host that has all the points above is not likely to close their doors very easily.

    The web hosting market is far from crashing - its just that with the thousands of hosts, many of which are far from reliable and are oversold, and many of which are inexperienced - its just a crowded market.

    Don't worry, there are still good, honest hosts that aren't oversold out there. Do your homework and you'll eventually find a host that satisfies your needs.
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  6. #6
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    I really doubt that the hosting market can be described as crashing. Most online based industries are getting more mature, with profit margins decreasing. There will always be a market for customised hosting solutions, but the "host for all/most" will become a game for the biggest and the fittest.

  7. #7
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    Its them who are leading the price race to the bottom who are responsible...
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  8. #8
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    I don't believe the hosting market will crash, it's a matter of adapting yourself to everything around.
    You can ask yourself, what if the customers will start paying more for hosting services and not trusting just anyone with low prices ?
    The customers demand very low prices and are responsible for the price race too you know.
    The entry level in the hosting 'business' is very low as you stated above but there is nothing anyone can do about it. A few years ago VPS servers were hard to find and were expensive and shared/dedicated hosting was expensive too compared to the prices you find today.

    Also, complaining about the kids that offer very cheap things will not help at all, you must adapt , adapt and adapt again.
    Yes, you may say that a very honest business will need time to rise and offer quality services. Sadly there is no time and you should know that customers will not wait for you to earn money in order to hire very experienced personel a.s.o.
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  9. #9
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    to be honest it’s too easy for kids to setup hosting accounts, with place like hostgator and Ihubnet offering complete reseller and billing system packages it has allowed for the market to expand so quick, everyone is trying to make a cheap buck. I think there should be an industry regulator, or some sort of affiliate, ie
    ABC Hosting is an approved host.

    This would help combat scamming and shutdown the cowboys.
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  10. #10
    Quote Originally Posted by ldcdc View Post
    There will always be a market for customised hosting solutions, but the "host for all/most" will become a game for the biggest and the fittest.
    That is definitely where this hosting industry is heading. People are now having to niche their hosting companies in order to get any signups when competing with big-time companies.

  11. #11
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    Quote Originally Posted by DH - Tristan Perry View Post
    The hosts you mention will probably disappear, meaning that there's always room for quality hosts out there.
    I tend to agree - while the "temporary" hosts do give a black eye/bad name to the entire industry those providers that offer quality services will survive.

    Quote Originally Posted by DH - Tristan Perry View Post
    Plus the average customer turnover on a "cheap unlimited host" is much higher than a quality non-overselling one.
    Indeed, I do freelance work for various providers from support tickets to server administration and I have to say that the lower your price is the more turnover you are going to see. You would think that offering something good for a low price would keep customers but the people that search for the low price plans are always looking for the next lowest price - quality and reliability usually isn't top on their list of priorities.

    Quote Originally Posted by DH - Tristan Perry View Post
    At least for us, we don't tend to get customers leave us for "cheap unlimited hosts" all that often. We did once recently, but they came back in a week's time
    We too have had this, we've had clients leave that were on our promotional new-host $2.50/mo plans and then come back 2 weeks later at $7.50 or more. The funny thing is their reason for leaving was "cheaper plan" or something very similar.

    Quote Originally Posted by bikster View Post
    New, emerging hosts that will survive are those with the dedication and motivation to run a web hosting company. Those that pour their dedication and effort, are a lot more likely to survive than those that see hosting as just another way to make a quick buck.
    This is very true. Far too many people really have no idea what it takes to provide hosting and do it right which is why there are millions of hosting clients that expect the world for pennies and believe in "unlimited" plans. Web hosting is a lot of work and really does require dedication and motivation to grow from a start-up to a successful business. I can tell you that I personally work more than anybody I know but I enjoy every minute of it.

    Quote Originally Posted by bikster View Post
    It also really helps if the owners are really passionate about web hosting, and know how to support their customers while requiring minimal help. Experience is the key here.
    Depending on how you start you don't have to have the experience as long as you are extremely dedicated and very resourceful. Most issues that clients submit via support ticket can be resolved by the client if they were simply to Google the issue and I think many web hosting customers would be surprised how often a support ticket operator searches a company wiki or even refers to Google to resolve an issue.

    Quote Originally Posted by bikster View Post
    The web hosting market is far from crashing - its just that with the thousands of hosts, many of which are far from reliable and are oversold, and many of which are inexperienced - its just a crowded market.
    Crowded by those that either don't know what they are doing or that simply don't care. It's a sad truth about the hosting industry.

    Quote Originally Posted by bikster View Post
    Don't worry, there are still good, honest hosts that aren't oversold out there. Do your homework and you'll eventually find a host that satisfies your needs.
    Bikster is very right - put forth the necessary effort to research a potential hosting provider and you will be able for the most part to determine if a provider is solid and will be around for a while. I still always recommend that you keep an up-to-date off-server backup of your account no matter who your provider is and how much you trust them.

    Quote Originally Posted by Syfonic View Post
    That is definitely where this hosting industry is heading. People are now having to niche their hosting companies in order to get any signups when competing with big-time companies.
    I believe that it has always been this way - the Niche has always been support+quality service however that niche in and of itself is getting pretty crowded. There are certainly other niches out there and I think many not on the "inside" of the industry would be surprised how many different hosting brands are owned by various different companies. You may have left one branch of a company to just join another branch and never even known it.

    Overall I do not see the industry crashing anytime soon - changing yes - crashing no.
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  12. #12
    no legitimate business that relies on their online presence hosts with the bulk sellers - at least not any with any sense..

    the bulk sellers are not the enemy - they are our friend - they are generating a market, developing customers and then passing the best customers off to companies that can support them..

    the bulk sellers will always have the highest volume - no doubt about it.. but, they will never have the margins required to support service levels most businesses require..

    As others have stated, it is survival of the fittest - and those choosing to play the price game with the bulk providers will fail - and miserably - as has always been the case in a services industry - overall value and level of service will be a viable market - providers just need to pick their poison..

    if you were a lawyer, would you rather be the ambulance chaser with TV commercials and a large, transient client base? or would you rather be the elite defender with a small, yet affluent stable of customers?

  13. #13
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    Quote Originally Posted by mioot View Post
    It is because of new comers who start the hosting business with just 500$. They buy a VPS or dedicated server for $100 and fixing the fancy price to cover the market, one fine day they will close the business with nothing.

    Now the average price is $3 with unlimited space and domains, It may be ok for bulk sellers like Godady. But what about small players who have around 500 customers.

    what is next, FREE ?
    I dont think anything is wrong with the market. indeed there are some people hosting and affecting others but it is strong for me so far.... I know when I first started up I started with 20 dollars and was sucessfull later on I started with over 100+ after I sold
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  14. #14
    Quote Originally Posted by mioot View Post

    what is next, FREE ?
    free hosting isnt new at all.. its been around for ages - supported by advertising and limited and restrictive capabilities..

    if so many businesses have competed against the free providers for so long, competing against the bulk, lower end providers, should be a breeze to figure out...

    honestly, this business is not too hard to figure out.. support your clients, provide what you promise, put policies and procedures in place to meet your marketing promises, rate your level of growth so you can keep up with customer demands, refine your processes and infrastructure constantly to be more efficient and phase out customers and plans that are unprofitable and unsustainable..

    many may think this harsh - but, it is what all successful businesses must do in order to survive...

  15. #15
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    As long as there are people willing to come into the hosting business and try to compete with the many companies out there, then I don't think people need worry.

    There's nothing like competition. Competition means the industry is healthy and still offers people a good choice.

    I'd be more worried about the hosting market if people lost interest in starting up hosting companies.

    One has to remember, that for every new start up hosting company, there's probably one or two bit the dust, so it balances out.

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  16. #16
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    Talking

    Who is responsible for Hosting market crash?
    those bloody halfling ninjas




  17. #17
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    There was a hosting market crash? Those types of offers have existed for over a decade, yet there are still plenty of good hosts out there...

    If your plan is to compete solely on price, your business plan is likely doomed from the start anyway... If you're a host that can't compete in this market, it is all your own fault.
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  18. #18
    We were once printers (offset) and felt because it was a custom business we would have a market forever. Every order was unique. Then photo copy machines came along.

    We migrated to graphics design and providing original camera ready originals for other printers, ad agencies and high end clients. Then laser printers came along.

    We have migrated to web site design (and hosting, mostly for our own design clients). Designing web sites is a custom market. I wonder what will come along and kill it.
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  19. #19
    Quote Originally Posted by mioot View Post
    what is next, FREE ?
    Too late, already been done.
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  20. #20
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    Those fly-by-night hosts will keep flocking the industry.

  21. #21
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    Crash? What crash? Been doing this 9 years and have yet to see so much as a hint of a crash.

    The market is changing with time, as any market does. That's Business 101. Natural evolution and change is not a "crash," though. It's just plain old normal.

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  22. #22
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    Hosting markety did not crash. It does change - some old hosts disappear, new ones are coming, but that's the way it should be. There are some problems in this market that have risen:
    1) overselling. It is a way of unfair competition and it still attracts unwise and maybe inexperienced customers.
    2) (as I can see from WHT) - "fly by night" kiddie hosts.
    People in the of financial crisis may be attracted to "all unlimited" than to realistic numbers and that is danger number one. Yes, there are those who realise - "all unlimited" is impossible, but there are still huge numbers of not so wise customers. Overselling is temptation, I have seen how companies that had good reputation began to roll down, ending with "all unlimited".

  23. #23
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    Yes, overselling is killing the market. Lots of inexperienced customers try to buy the cheapest plans with unlimited features such as space and bandwidth, which does not exist. Overselling hosts just try to get the highest amount of clients. This often leads to unstable servers, long response times and terrible support.


  24. #24
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    Quote Originally Posted by shad0wz View Post
    Yes, overselling is killing the market. Lots of inexperienced customers try to buy the cheapest plans with unlimited features such as space and bandwidth, which does not exist. Overselling hosts just try to get the highest amount of clients. This often leads to unstable servers, long response times and terrible support.
    I beg to differ - I think that overselling is helping to build a more informed consumer. All of those clients that go with "overselling" hosts and get burned usually find their way to a more reliable not-so-oversold host and tend to appreciate what they are given a bit more.

    Other than that, server mis-management is a huge issue with new hosts imho.
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  25. #25
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    Fly By Nighters have only made is better for the older and established hosts. They agitate legitimate customers by going out of business, then those customers end up looking for reliable and established providers. Thats how its always been.
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  26. #26
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    Quote Originally Posted by maniakaz View Post
    Hosting markety did not crash. It does change - some old hosts disappear, new ones are coming, but that's the way it should be. There are some problems in this market that have risen:
    1) overselling. It is a way of unfair competition and it still attracts unwise and maybe inexperienced customers.
    2) (as I can see from WHT) - "fly by night" kiddie hosts.
    People in the of financial crisis may be attracted to "all unlimited" than to realistic numbers and that is danger number one. Yes, there are those who realise - "all unlimited" is impossible, but there are still huge numbers of not so wise customers. Overselling is temptation, I have seen how companies that had good reputation began to roll down, ending with "all unlimited".
    How have those risen?

    Overselling has always been a part of shared hosting, maybe the extent of it has increased, but so have the available resources. I do remember some "unlimited" hosts existing ~10 years ago though, and you can't oversell much more than that.

    As for kiddie hosts, I'd say kiddie hosts are less of the market now than it was 10-12 years ago. Then the industry was still young, there weren't many established players, and inexperienced kids, such as myself at the time, saw an opportunity and entered the market.

    These are old issues and the industry has survived them to this point. I have not seen anything that has changed so drastically that it would be devastating to the industry.
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  27. #27
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    Quote Originally Posted by Cristi4n View Post
    I don't believe the hosting market will crash, it's a matter of adapting yourself to everything around.
    Exactly.

    As the great Eddie Vedder wrote/sings... "It's evolution, baby!"

  28. #28
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    Quote Originally Posted by cartika-andrew View Post
    no legitimate business that relies on their online presence hosts with the bulk sellers - at least not any with any sense..

    the bulk sellers are not the enemy - they are our friend - they are generating a market, developing customers and then passing the best customers off to companies that can support them..

    the bulk sellers will always have the highest volume - no doubt about it.. but, they will never have the margins required to support service levels most businesses require..

    As others have stated, it is survival of the fittest - and those choosing to play the price game with the bulk providers will fail - and miserably - as has always been the case in a services industry - overall value and level of service will be a viable market - providers just need to pick their poison..

    if you were a lawyer, would you rather be the ambulance chaser with TV commercials and a large, transient client base? or would you rather be the elite defender with a small, yet affluent stable of customers?
    Very well said.

  29. #29
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    Also , some new comers able to spam the google easily , just google for web hosting and check the results.
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  30. #30
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    It happens in all markets mate.
    Everyone tries to match and beat someone's pricing...
    Until...
    Rock bottom and wafer thin profits.
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  31. #31
    Crash? I wouldnt go that far. It definitely has changed though. Im sure in times like this some markets are doing worse.

    For example, a hobby webmaster will drop their hosting service as soon as they are low on funds.

    However, if you make any money on your website, you need a web host. As more and more people try to make money online, they will be buying web hosting, web designs, and domain names.

    This market has not crashed, only evolved alittle. If you are targeting businesses, Im sure you will see a huge boom in the amount of customers you take in.
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  32. #32
    Quote Originally Posted by cartika-andrew View Post
    no legitimate business that relies on their online presence hosts with the bulk sellers - at least not any with any sense..

    the bulk sellers are not the enemy - they are our friend - they are generating a market, developing customers and then passing the best customers off to companies that can support them..

    the bulk sellers will always have the highest volume - no doubt about it.. but, they will never have the margins required to support service levels most businesses require..

    As others have stated, it is survival of the fittest - and those choosing to play the price game with the bulk providers will fail - and miserably - as has always been the case in a services industry - overall value and level of service will be a viable market - providers just need to pick their poison..

    if you were a lawyer, would you rather be the ambulance chaser with TV commercials and a large, transient client base? or would you rather be the elite defender with a small, yet affluent stable of customers?
    Seconded! In fact we've seen more low-budget cheap hosts die out right here on WHT, I think. It's either a conscious effort to improve in the market, or it's no business. Wonder what the toll of 'dead hosts' is as of today.

  33. #33
    Quote Originally Posted by MikeDVB View Post
    I beg to differ - I think that overselling is helping to build a more informed consumer. All of those clients that go with "overselling" hosts and get burned usually find their way to a more reliable not-so-oversold host and tend to appreciate what they are given a bit more.

    Other than that, server mis-management is a huge issue with new hosts imho.
    I agree with you, Mike. Overselling is not killing the business, but helping it. It indeed makes a more informed customer. In addition to that, at least 75% of the customers do want a lot of disk space/bandwidth, but hardly ever use more then, say, 10% of it. Overselling thus attracts customers to the business.

    On the other hand, if 90% of the business would not be overselling, and prices would thus be higher, people would realise hosting isn't a $1 business and they don't need 5GB disk space and 500GB bandwidth for a personal blog, with at most 10 visitors a week.

    I think the hosting market is not going to crash, but it is an ever-changing market. The most important thing people nowadays should realise is that hosting is a serious business and it indeed takes a lot of dedication to run a hosting business. Setting up a hosting business is easy (it can very well be done in a day, the technical side within hours) but maintaining it is much harder, especially when you have a lot of customers that require constant support.

    The changes in the hosting market are not limited to shared/reseller web hosting, though. A VPS is becoming a dedicated server alternative to many, and cloud computing is rising (though I'm curious which changes that will bring). I personally believe this is an interesting development, since it could mean that more support services would be required in the future, rather than hosting with support as a package. But we'll see...

  34. #34
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    I think it's that customers are ultimately uninformed about hosting in general and don't really know how to compare apples to apples. You have to remember that the Web is still a fairly new thing to the average consumer and though people are finally pretty browser savvy these days, they have a long way to go when it comes to knowing the difference between a tier 4 facility and a guy hosting sites from his bedroom on a DSL connection. Like with all things it takes time to thoroughly educate the public.

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