Web Hosting: The Immature Industry
Has anyone asked, realistically, why 1&1 is so successful? The knee jerk reaction is that they sell cheap web hosting. Lots of Hosts sell cheap web hosting. Walmart sells cheap, hmm well cheap everything. But that is not enough. For Walmart to sell it needs to pack the store with buyers. How do you pack the store with buyers?
I say Web hosting is an immature industry because we are in industry with excellent technical sense. The practical application of new technologies moves so swiftly through our industry that you can find a new niche market at least every year and sometimes even monthly.
What the industry collectively lacks is the business and marketing sense. I say collectively lacks because there are several Hosts and individuals who do understand what it takes to reach the next level.
1&1 offers low cost hosting, but they understand business. Their branding is near perfect, their marketing division is powerhouse with large ads in every publication that helps build their brand and mind-share. On the other end, they hold conferences and networking opportunities for their business customers and use the information they gain from these to better improve and expand their business offerings.
These are the things that need to be done if you want to, not just be successful, but to be the best in your niche.
So lets examine what it takes to be a hosting powerhouse.
At Hostingcon 2007 Tuesday panel Serguei Beloussov, CEO of SWsoft, said the exact three things that I have been trying to communicate for years. If you did not attend the conference then I will go over the three points he talked about an expand on them.
They are product management, product marketing, and lastly pro-active sales voice. On top of this, I will also discuss what is needed to properly utilize new technologies and how to expand as a pioneering web host whatever the technology.
As you can see, these points are non-technical. They are all business and service related. They do however require time, capital, and personnel.
Stay tuned for the next installment on product management and the web hosting industry!
David Dunlap is the Editor in Chief for Web Host Magazine & Host Buyers’ Guide, the trusted authority for web host reviews. Dave’s articles on the web hosting industry can be found at www.WebHostMagazine.com and his blog at www.WebHostBlog.com.
I agree with many of your points, David. The key thing about running any business is that you are a for-profit institute. Your goal is to sustain and progress your business by making money. The web hosting industry isn’t so much immature as it is naive. When you create your business, the marketing department must be your driving force. These people research, analyze, develop and evaluate your product and they find more ways to reach different market segments.
Forget emerging technology software and hardware. A good marketer can give you 30 market segments within a day, an hour even. I don’t believe in using the word niche when we’re talking about marketing a business. You identify niche’s and those are usually mentioned in paperwork not in achieving results.
I could talk about this more but I hardly write this much on my own blog! But in a nutshell–Put your marketing department at the top and everything else will fall in line. I’ll put 100 bucks on that.
August 15th, 2007 at 5:19 pm
I’m sure that business approach is the most important thing in web hosting business. It is not just about to buy dedicated server with cPanel abd to start selling for cheap. It is about to understand what do site owners need to maintain successful online business. Hosting Companies that look at web businesses like someone who has specific requirements alwasy win.
November 22nd, 2007 at 9:14 am