Will Reseller Hosting become obsolete?

[Artashes]

I was chatting with Marks about how some companies choose to spam in hopes to gain clients. According to him, people are spamming because of competitiveness desperation. He says that "one of the major shake-ups in this industry in the future will be less hosting companies. So many are non-profitable and with price-increases storming through soon, something has to give. I wouldn’t be surprised if Reseller Hosting will become obsolete within the next 3 years."

Marks thinks there is already a decline in the number of dedicated server providers, and mergers are becoming a routine.

I agree, but not completely. For example, I think that people are spamming because they think its easy and there are a number of ways for them to do it with no effort at all. Second, I think that the industry will certainly see more mergers take place, however, I don't think resellers will be going out of business at all. There will always be local markets that giant corporations will never walk into. Their resellers is who they rely on to fill those gaps.

So what do you think about it?

 

[SoaCahToa]

Personally i think Reseller hosting is here to stay for quite a while yet. There are still a lot of people on the internet who want to "make a quick buck" by reselling hosting.

In my opinion, resellers help 2 people. The main provider as well as the purchaser. Cheaper hosting is great for people who don't need a lot of special features and just want to host their personal webpage and that is exactly what is offered by resellers. Because resellers are still making some money I don't forsee them going away, nor do i expect hosting companies to stop selling reseller accounts for precisely the same reason.

 

[Kevin K]

I don't think reseller hosting is going anywhere due to the fact that it is the stepping stone for web hosters. Most individuals that go into web hosting start with a resellers account and move up to a dedicated server.

Spamming will always be a problem because people just don't want to put in effort to advertise and promote their company these days. Along with that they don't want to spend the money.

Advertising your company and getting the most out of it is not an easy task by any means. Most do not know how to maximize advertising methods which leads them to this simple spamming scheme.

Spamming has become such a problem now days and the more it happens the more others are quick to jump in look at it as an easy way to get noticed. The thing is most of the time with the spamming their company image ends up negative because they end up getting called out on it.

Its evident that the hosting market is oversaturated and alot of smaller companies cannot make it now days, but it all depends on how much effort you want to put in to stay competitive. Though its hard it can be done!

 

[Marks]

For example, I think that people are spamming because they think it’s easy and there are a number of ways for them to do it with no effort at all.

Agreed people do spam for this reason and that does play apart in them "being desperate"

Re-thinking "3 years" is a short-period over the next 5 years? VPS pricing has dropped dramatically to almost reselling pricing and end-users will think there getting a greater deal (Usually Bandwidth being greater).

If you did a survey with several large hosting companies I'm sure there will be a dip over the last 13 months in reseller hosting.

I don't think Reseller Hosting will be the only major changes in the industry; it’s a very new industry and hasn't "evolved" dramatically yet.

Government Agencies are so far behind times that they have yet clinged on to "Web Hosting" and with the latest exposure by Liam Young maybe a negative thing to the Hosting Industry.

There are still a lot of people on the internet who want to "make a quick buck" by reselling hosting.

It only takes one major provider to make it obsolete and other providers will follow the trend, infact I did read that a medium-size company was considering taking it off its line of products. E-pricing is going up with the cost to run a Datacenter and that will go down the chain and affect the End-User some-way-some-how.

I think that it’s inevitable that Reseller Hosting will be obsolete soon. It’s the stepping stone for these short-term-business entrepreneurs (who think that you don’t need to pay tax) which prevent the industry from becoming a Big Trade Globally.

It won't be natural process that's for sure but this will definatly be a start to "cleaning" up the Hosting Industry.

 

[ldcdc]

Reseller hosting customers are often the web developers hosting their customers. It's not just small time hosts that rely on these pachages. The VPS may take a part of this market (especially the fully managed ones) but many reseller hosting customers still won't want the complication. I don't see reseller hosting as obsolete anytime soon. It may however redefine itself a bit (offering end user support may become the norm rather than the exception) and could lose some of its market.

Even if we consider the VPS as its future replacement, the market doesn't just vanish. The reseller hosting provider of today will slowly become the VPS provider of tomorrow.

 

[SoaCahToa]

I have to agree with part of ldcdc's comments. Reseller hosting is not going to become obsolete anytime in the near future. But i do believe that reseller hosting will begin to fade as more and more webmasters realize that it is not a great deal sometimes. As more and more webmasters decide that they want real hosting (with support..) they will draw business away from resellers.

The more business taken away the more resellers will begin to fail and close down. Eventually it progresses until resellers are no longer the fad of the internet

 

[vpster]

I think that reseller hosting is not on the way out completely because web designers still want everything to be managed, however I think that there may be less of a demand for reseller hosting because of VPS servers.

 

[Lesli]

I don't think reseller hosting will disappear. The market may become less viable for some (just like shared hosting), and reseller hosting may change - but I don't think it will go away. There will always be people who run online businesses (designers, developers, copywriters, graphic artists) whose clients may want a one-stop shop for their web presence - and those providers may not care to learn how to administer their own servers, nor have a client base large enough to afford a managed dedicated solution.

The industry will continue to see mergers - especially as the US economy slows down further, and some companies choose to shut their doors. A few years after that, or whenever the economy begins to spring back, resellers may make a resurgence. It's all a pendulum.

 

[demowolf]

I can't believe for a second that reseller hosting will disappear. Yes there will continue to be consolidation, and larger companies buying up successful smaller ones... but why would a budding entrepreneur pass on the opportunity to start a hosting business, particularly if it's a value-added service to an existing business (for example, like if he's already a web designer)? People who hire companies to design and manage their websites very typically want to get their hosting from the same place... one stop shopping. So whether that means the designer will "source" the hosting from somewhere else, or they get their own reseller plan and provide the hosting on their own... that usually makes no difference to the customer... they quite often want to get everything from the same place.

Reseller hosting is not dying. But it may be changing... i.e. moving the route of VPS.

 

[digit]

There is always going to be a damand for hosting, and reseller hosting is a part of that so I think it will be around for a long time. Reseller hosting is usually the starting block for people who are interested in starting their own hositng company because they get help while learning the ropes and they can become established

 

[miKael]

Reselling may vanish easily when people who choose now to go for a reselling account intending to sell plans, will go for VPS and dedicated deals and will provide support themselves. I guess it's all connected with raising the general level of server management literacy.

 

[demowolf]

Reselling may vanish easily when people who choose now to go for a reselling account intending to sell plans, will go for VPS and dedicated deals and will provide support themselves. I guess it's all connected with raising the general level of server management literacy.

So you think that eventually everyone will think it makes business sense to start a hosting company (or hosting as an added service to provide to their web design clients) with a VPS or dedicated server? What if the web designer who wants to offer hosting doesn't have the technical knowledge to run a VPS or dedicated server? What if he/she is starting out small?

I think there will always be a market for reseller plans. Their name may change, but the idea of buying "a bunch of something" and "reselling it in smaller packages" will not go away.

It's just like an apartment building. You don't go buy the building because it makes more sense to do that for some. You do what you can afford.... you rent an apartment. You buy a reseller plan.

IMO of course

 

[ldcdc]

I guess it's all connected with raising the general level of server management literacy.

Well, the same could be thought about other things as well, but people generally don't get to the level of profficiency with everything on the face of the earth. I mean, not everyone's going to be a server admin, just like not everyone's going to be a mechanic, or a pilot etc.

 

[Lesli]

There's also the "time management" argument, which kind of complements ldcdc's statement above. Even when someone's proficient in a thing, they may still choose to have it done by someone else.

A friend of mine is a very good cook, yet she hires a personal chef to cook most of her meals. She's an obstetrician, spends a lot of time on call (and thus, out), and just doesn't have time to relax, do laundry, take care of her garden, cook, clean...and do her job. She hires out the bulk of the day-to-day cooking and cleaning, has a landscaping service come in twice a year for a "seasonal overhaul" of the lawn and garden, and thus leaves herself time to relax each day after work. She'll occasionally bake, cook a special meal for friends or a gathering, and do her "spring cleaning"; but she hires out the daily-maintenance stuff.

She's an amazing cook. She just chooses to spend her daily non-work time doing things other than cooking.

Web hosting (namely server management) is the same way with many people, and it likely always will be.

 

[JamesL]

I would have to agree that Reseller Hosting is here to stay for a while. Why? There are too many people that want a reseller account rather than a VPS or Dedicated. The convenience is one reason that people use this option. Another reason would be a cheaper way to play around with an idea that they have, they won't be losing much if they fail which helps put their mind at ease.

 

[CountryBoy]

I think resellers are going to be around for the long haul. I don't think it is an easy quick buck for budding entrepreneurs because it isn't. I think it will continue to exist because it has the ability to fill niche markets with a unique approach better than the big host companies. Resellers are no threat to the big boys because they are reselling and the big boys still get their money. There will always be consolidations but a company that has flexibility and knows how to appeal to the right segment of users will do well. Spam advertising is for the lazy. I don't think it's terribly effective and it sure is annoying.