It was not too far in the past that web hosting providers were few and the cost of a moderate hosting account was considerably more than a Big Mac. Fast forward to the 2008, when $0.99 unlimited, or nearly unlimited, hosting plans are becoming common place. What happened and more importantly does it matter?
There are probably just as many reasons why web hosting services are becoming, if not already, a commodity as there are web hosting providers, but I will explore only a few of what I believe are the more prolific reasons here. Countless web hosting providers, many of them large, reputable companies, are succumbing to the relentless cycle of offing unbelievable storage and bandwidth allocations to their shared and reseller web hosting services. There are so many companies offering what is essentially "unlimited" hosting that it makes me wonder how companies pay their bills.
I am certainly not the first in the industry to write about the viscous cycle of price gutting that is, and has been for some time, dominating the hosting market. I am also certain that I will not be the last. What I am certain of is that the web hosting industry, especially the shared hosting sector, is ripe for change. I see so many start-up companies offering products that simply cannot be profitable over time, even when Murphy's law and economies of scale are figured in. I believe the industry will see many, many companies fold and many, many others consumed by larger players with sustainable business models.
What has created this sea of unsustainable businesses? The barriers to entry are gone, anyone with an Internet connection can now setup shop and host web sites in a matter of hours. The ease of setting up and establishing an online presence and the elimination of the costs traditionally associated with providing online services have opened Pandora's box so to speak. Is this bad? I don't think this is necessarily bad, competition is after all a good thing for the consumer, but how does the typical customer know their site is hosted on systems that are properly maintained and configured? More importantly how do they know they will receive the support you need when something goes wrong or that their provider will not just disappear one day?
I'm sure you have heard to old saying "you get what you pay for". This is just as true for web hosting as it is buying a car. Consumers are rightfully looking for the best price they can get for goods and services, yet sometimes quality and service are overlooked until something breaks or worse. I was stunned several months ago when a seemingly very stable domain registrar and hosting provider collapsed from what appears to have been an internal conflict between principles in the company. Customers were literally at their mercy to release their domain so they could get their web sites moved to another provider. I do not know about you, but many of our customers depend on their site being up to provide for their families. I cannot fathom being unable to return a site to service for days or weeks. And yet by looking at this companies web site, their traffic ranking and reputation on hosting sites you would not have known they were on the brink of collapse.
But at the end of the day does the fact that shared hosting is becoming a commodity matter? For most people, probably not. Afterall what happens when a low cost provider goes under or is acquired by another company? Typically users either stay with the new company or jump to another hosting provider, if they have control over their domain and their site backed up. Either way it is typically not a news worthy event that is broadcast on the five o'clock news. But occasionally the impact is larger in scale and felt around the world.
I believe the industry as a whole is healthy and headed toward a time of price stabilization, but it may take a while to weed out the minors from the majors. I the mean time, I'll just go grab a Big Mac :)
Friday, February 22, 2008
Saturday, January 12, 2008
The sandbox of ingenuity
Welcome to the Goleman Networks CEO blog. I decided to start this blog for two reasons, first I have a desire to write about topics that are of interest to me personally and my company, second I thought it would be a good way to experiment with blogging and how it can be used to effectively communicate information.
As I write this, I have no idea if anyone will ever read what I write, who am I in the grand scheme of things after all? However, it is my hope that if someone does read this blog that they may find something of interest or value to you or your company. I intend to write about topics relevant to web hosting, running a hosting and network consulting company, Internet technologies, God and business and related topics that I find interesting or compelled to write about.
I think back to the 1990's when I first encountered the Internet from my home computer using America Online to dial-up. Oh, how times have changed, instead of dialing up at 2400Kbps (or less) most users of the Internet are now instantly connected to the net at more than 1Mbps.
What is it that is driving the phenomenal growth of the Internet? Information? Convenience? Anonyminity? Lower Costs? Perhaps all of these, any many more, are reasons for the Internet's continued growth, but I believe it is being the sandbox of ingenuity that continues to drive the exponential growth of the Internet. The Internet is the only tool that I can think of where ordinary people can take an idea and bring it into reality for millions of people, all from their living room. People from all around the world now quickly exchange information and ideas with click of a button. Never before has this kind of communication been possible, that amazes me.
But what we do with this new tool ultimately determines its worth to human society as . We can choose to make use of this tool for the betterment of mankind or we can use this tool to our own demise. I see so much potential for the Internet, but I also see the great potential for it to be used for evil and destruction. I liken the Internet and the revolution that it is spurring to atomic energy and the revolution it brought (and continues to bring), so much power and potential to solve so many problems and help so many people, but it comes with an equally destructive potential.
I believe we are still in the pioneering stages of the Internet, learning and exploring this great new world. I will continue to post about the Internet and my thoughts on its use in future posts.
As I write this, I have no idea if anyone will ever read what I write, who am I in the grand scheme of things after all? However, it is my hope that if someone does read this blog that they may find something of interest or value to you or your company. I intend to write about topics relevant to web hosting, running a hosting and network consulting company, Internet technologies, God and business and related topics that I find interesting or compelled to write about.
I think back to the 1990's when I first encountered the Internet from my home computer using America Online to dial-up. Oh, how times have changed, instead of dialing up at 2400Kbps (or less) most users of the Internet are now instantly connected to the net at more than 1Mbps.
What is it that is driving the phenomenal growth of the Internet? Information? Convenience? Anonyminity? Lower Costs? Perhaps all of these, any many more, are reasons for the Internet's continued growth, but I believe it is being the sandbox of ingenuity that continues to drive the exponential growth of the Internet. The Internet is the only tool that I can think of where ordinary people can take an idea and bring it into reality for millions of people, all from their living room. People from all around the world now quickly exchange information and ideas with click of a button. Never before has this kind of communication been possible, that amazes me.
But what we do with this new tool ultimately determines its worth to human society as . We can choose to make use of this tool for the betterment of mankind or we can use this tool to our own demise. I see so much potential for the Internet, but I also see the great potential for it to be used for evil and destruction. I liken the Internet and the revolution that it is spurring to atomic energy and the revolution it brought (and continues to bring), so much power and potential to solve so many problems and help so many people, but it comes with an equally destructive potential.
I believe we are still in the pioneering stages of the Internet, learning and exploring this great new world. I will continue to post about the Internet and my thoughts on its use in future posts.
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