Is the hosting market oversaturated?

raindog308 said:
Man, there are some people in denial here :)

The hosting market is grossly oversaturated. Extremely low barrier to entry for new conpetitors, no room to raise prices, hundreds of cookie-cutter hosts, etc.
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i dont think its too saturated with good genuine hosts as the WW is developing all the time.

but i think their are too many as you call them cookie-cutter hosts and others call them kiddie hosts who just get a cheap reseller/master reseller from ebay and think they are web hosts selling unlimited plans for $2 a year
 
I think the definition of oversaturation is that it's difficult to find hosts who offer something different.

Everyone claims five nines of uptime, full-featured services, friendly staff, concierge service, and has the same sitebuilder/cpanel/etc. offerings.

If I was going into web hosting - and I'm not :D - I'd think of two things:

  1. What is different or unique about my service? Simply offering Litespeed web servers or "unlimited MySQL databases!" is not a differentiator. "Good service" is not a differentiator (though it may be true and others may not, to a potential customer, there are lots of people offering that). What's my niche? It could be that I target businesses and provide bundled web site design. Or I am an expert on $SOME_WIDELY_USED_SOFTWARE and I provide hosting that specializes in it, where I configure and manage and the customer uses. Etc.
  2. Go local. Still a lot of businesses who'd like to talk to someone with a local phone number, or who will at least listen to your pitch because they're your drycleaner or you eat at their restaurant.

Marketing is the hardest part. The days where you could throw up a reseller account and people would flock to your gates are gone.
 
Over saturated, as in that it is creating a problem for established hosts, or as in there's an over abundance of start ups looking to go belly up in a few months.

There will always be new start ups, and like every other industry, most will fail. Do they affect my ability to sell hosting - NO.

Should the general public be wary of new hosts? Of course, but as in everything else business related, it pays to do some research upfront, and prepare for the worse.

Everyone has to start somewhere. Some of these will go on to become industry leaders.
 
Steve-Hostirian, I was about to post a reply until I read your post You are absolutely right. Its just like any other industry. Even in th supermarket industry, you see new supermarkets opening up 2 blocks away from a well established one. But in the end, they both have the capability to take out the competition. In the end, it was ultimately up to the business owner to open-up shop. But if everyone was worried about the state of an industry, Wal-Mart would have never been around. You just have to be willing to take that step. I read a quote in a Forbes Magazine that read, "The worst sorrows in life are not in its losses and misfortunes, but in its fears".
 
The competition may be fierce but the big names are still leaders. There will always be room for competition, this is a continuously growing business but not everyone can offer great services so as they come, they will also go and make room for others and so on.
 
SolidShellSecur said:
Unless you know a niche and how to reach it. Don't even bother. You will strain yourself.
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Doesn't this apply to almost any content/service that's offered online? It seems to me that businesses that are highly targeted are more successful these days. The one-size-fits-all mentality isn't valid on the web. It's all about how useful the thing you're offering is and how easy it is to find it. :) This is also true for the hosting market where you have to compete with the big sharks who have practically unlimited marketing budgets... So, yeah - the market is kind of saturated. :D
 
attracthd said:
This is also true for the hosting market where you have to compete with the big sharks who have practically unlimited marketing budgets... So, yeah - the market is kind of saturated. :D
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Not really practical for small hosts to try and compete on their level.

Small hosts mainly have to compete against the so called 99c for a years unlimited reseller plans advertised on sites like ebay, as a majority of people looking for hosts will just see 99c year unlimited, not really aware that these hosts will most likely be gone in a few months.
 
I don't think the hosting market is oversaturated, but the competition is indeed fierce. In my opinion, it is not worth building a web hosting company unless you truly have have quality services to offer,... and unless you can keep the prices low enough to compete with the major players, your chances of success are not going to be very high...
 
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Obelix said:
In my opinion, it is not worth building a web hosting company unless you truly have have quality services to offer,... and unless you can keep the prices low enough to compete with the major players, your chances of success are not going to be very high...
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the thing is the big boys will provide clients with a hosting account and support and thats it, so small hosts have to try and find a niche that makes them stand out.

and example is a lot of people like using Wordpress, so a simple solution is to create plans that includes a fully functional WP site installed etc. you can do this with many differerent scripts.
 
easyhostmedia said:
the thing is the big boys will provide clients with a hosting account and support and thats it, so small hosts have to try and find a niche that makes them stand out.

and example is a lot of people like using Wordpress, so a simple solution is to create plans that includes a fully functional WP site installed etc. you can do this with many differerent scripts.
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Yup. In my mind though, consumers still don't perceive hosting as a regular business. They don't consider the fact that with smaller companies you receive more personal support and usually friendlier experience altogether - just like with most offline services.
 
attracthd said:
consumers still don't perceive hosting as a regular business. They don't consider the fact that with smaller companies you receive more personal support and usually friendlier experience altogether - just like with most offline services.
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true, most people still think hosting is run by spotty teenagers on a PC from their bedroom after school
 
When I got into the hosting biz back in 2005 I found a niche for ddos protected hosting as ddos was much worse back then. Since vista, windows 7, UAC and such it is much less prevalent. Usually now its only ddos for hire or big competitor ddos. Back then nearly any kiddy could have a botnet and ddos any site he didnt like or whatever.

I messed up big time merging with a competitor because I could not find anyone to help me with support and such, I guess because of the concepts I was using most was not familiar with. Anyway my merge was a disaster and I lost that business.

Since then, It has been really hard to find the right niche as the market is VERY over saturated with ridiculously oversold plans and allocations they never intend to let their client use.

I am working on a few different things now to try and get more hosting sales but most of our focus has been on offering US based server management which is doing very well.

I suggest to anyone wanting to start a business to go either find a niche, go local or have a HUGE marketing campaign which can be a huge risk as well if not successful.
 
Who said hosting business is over saturated there is still plenty of gap for you. You should first of all concentrate on your local area.
 
cparks1321 said:
there are probably more hosts then websites
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That couldn't be further from the truth :) I'm trying to imagine less than one website per provider. Even small providers have 50 to 100 clients and many of them have multiple websites. Any decent sized provider will have 4 to 5 thousand clients and the larger ones hundreds of thousands.

I wonder how many registered domains actually have active websites on them? Regardless, there's always more room for additional hosting providers - at least as long as the Internet, broadband and mobile continues to grow.
 
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I agree with the above.
You can score if you go local and traget specific markets.
For example, our australian web hosting and our australian vpss are most successful for us.
There is need of reliable web hosting service there and people are willing to trust a younger provider.
 
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