A few years ago, I started covering the changes from within the telecommunications industry, in particular the large mergers between AT&T Wireless/Cingular and Sprint/Nextel, and most recently the Cingular's acquisition of AT&T corporate.
Before any of this happened, back in 2002, the cell phone industry was booming while also suffering a huge problem with keeping their infrastructure (like cell towers) up with the pace with their growth. Customer service was suffering bad (real bad), everybody and their mom was complaining about dropped calls and poor network coverage (so bad, in fact, that the general public completely lost faith in the quality of cell phone service—which you probably already know—which is responsible for today's marketing focus within the industry to tout their improved cell service, like "more bars," or "can you hear me now.").
The ominous tone within the cell phone industry, circa 2002, was that there was too much competition (there were, at the time, roughly 9 major players), and that some of these companies were going to need to either consolidate or die.
Sure enough, by 2004, Cingular Wireless acquired AT&T wireless, followed by the Sprint deal.
Okay, so what the hell is my point, right?
The hosting industry, which I'm beginning to cover now, is, of course, a different animal. Instead of a handful of large, national players, the hosting industry for the most part consists of dozens, if not hundreds of small to medium sized companies.
With big dawgs jumping into the hosting game, like Amazon, Google, and Microsoft, to name a few, along with large telecoms, smaller hosts are about to hit a wall. Amazon is throwing monopoly money at Amazon Web Services. And the big players don’t seemed to be concerned with losing money in their new hosting ventures—they just want to expand their product offering base or to enhance other existing products and services. How can the everyday web host compete with this?
So far the reaction (which might not be a reaction to the big players getting into the game, but a reaction to more and more competition) has been to emphasize “customer service.” Every web host out there now is touting their so-called renowned or world-famous (or whatever) customer service. Why? Because with everybody pretty much offering the same thing these days (i.e. a gizzilion GB of disk space), what else is left to separate themselves from everyone else?
Problem is, a lot of hosts who promote their superior customer service fall short of their promise.
Here is my some-what informed opinion. The big players will begin, within the next 4-5 years, pulling in a huge market share, thus pushing a lot of the smaller hosts out. The smaller hosts that do survive will be the ones that actually offer the great customer service they advertise.
Keep an eye out for some large mergers and acquisitions just around the corner (like alemcherry mentions above), along with a few unfortunate deaths.
