How do you keep your web hosting business growing? Part of your responsibility lies in staying on top of industry trends. Ignore these trends, and your company starts to suffer as your customers start looking elsewhere for solutions.
Trend 1: Competition from DIY website builders
Squarespace, WordPress premium and other website builders make creating new websites a breeze. We have also seen bloggers publish content like How to Create a WordPress Blog in 5 Minutes. Such content creates the impression that websites are easy to build and set up.
What does this mean for web hosting companies? A growing number of your customers and potential customers think websites are easy to set up. In fact, some probably believe that there’s no real difference between web hosts. After all, everybody promises “easy to set up websites” right?
How to respond to this competition trend
Simply offering web hosting is not enough. You need to provide additional value to your customers. For example, consider offering a quarterly security review for your e-commerce customers. Or review the other trends in this article for more ideas on how you can develop your business.
Trend 2: Bigger demand for managed web hosting services
Modern websites are sophisticated bits of business technology. Take a successful e-commerce website, for example. It may have over a dozen plugins running to increase conversions and manage security risks. To serve media to end users, you might even have a CDN (content delivery network) in the background to keep media flowing quickly.
Fully-managed hosting is a particularly popular option if you have non-technical customers. In addition to basic traditional hosting, a web host will provide backups, system updates, managed backups and help desk services.
In the hosting market, fully-managed hosting sometimes includes one-click installation for commonly used applications, like WordPress and databases. You can also expect to see risk management services like disaster recovery and secondary facilities.
How to respond to this trend of bigger demand
This trend is an opportunity to offer greater value to your web host customers. In order to take advantage of this trend, you’ll need to offer more value in-house. You can do this by building a team or connecting with third parties. In either case, you’ll need extra management effort to maintain the customer experience.
Trend 3: Price competition heats up
It is the flip side of increased demand for fully managed web hosting – price wars for less complex services. If your company specializes in offering simple, do-it-yourself web hosting, be prepared to offer more price-based offers. The largest web hosting companies, like GoDaddy, are masters of discounts and pricing. So study their offers.
You can navigate this trend without destroying your business. However, you need to understand your costs and where you can get increased efficiencies. You might start by looking at your third-party bills for software, hardware, and services.
Alternatively, you might offer discounts in the short term to attract longer customers. It’s the classic ‘cell phone company approach’. Offer a price break today in return for a two or three-year contract.
How to respond to this pricing trend
Ask yourself: Are you losing customers because of price competition? If yes, decide whether you want to respond with more aggressive pricing – or move up the market.
Trend 4: The death of simple web hosting?
When you think of the leading companies in the web hosting business, how many services do they offer? At a moment’s notice, we thought of the following:
- Web design services
- Security services like HTTPS, SSL and more
- E-commerce support: help to install plugins or to implement shopping carts and payment services
- Email services
- Online training to help customers deploy their ideas
- Marketing and SEO services. It might not be a specialty of web hosts, but we see this being offered in the market
How to respond to the trend of ‘extra needs’
What does this mean for your company? If you run a basic web host service, your days are numbered. To survive in the modern web host market, you need to offer additional services. Ask yourself: What are you doing to support your customers’ security needs?
Trend 5: HTTPS is the new normal
In 2017, HTTPS went from being a good idea to being nearly mandatory. As of early 2017, Wired reports that about half of all websites were running HTTPS. Why did it happen? The process started gradually. In 2015, Google said it would favor websites with HTTPS in search results. In mid-2018, the Google Chrome browser will mark sites lacking HTTPS as not secure.
How to respond to this security trend
If you don’t offer your customers HTTPS today, you’re already behind in the game. If you currently charge for HTTPS, that service offering will go under pressure. Why? Because many web host companies offer free HTTPS. You may have to give up that particular service offering. Don’t worry – there are other security services you can charge for.
Trend 6: Protecting user privacy
2018 is already shaping up to be a major year for data breaches and security matters. In Europe, the GDPR (General Data Protection Regulation) is causing a tremendous impact on business. If you have web host customers in Europe, you may want to reach out to them to remind them of the changes.
Outside of regulatory changes, there’s a growing concern about the power of large Internet companies. While you may not have Facebook’s scale or problems, their experience has lessons for web hosts. Government agencies and end-customers expect companies to protect their privacy. And take action when there is a failure.
How to respond to this privacy trend
There are 2 dimensions to responding to this trend.
- First, rethink how you collect and use information from your customers and users. Do you have a program in place to track and report data breaches?
- Next, what advice and information do you provide your web host customers to protect their customer’s personal info? That’s an area where you can add value through webinars, newsletters and additional services.
Trend 7: Green Hosting
Did you know that Internet activities, including running data centers,are significant sources of power consumption today? As a response to this challenge, Google has started changing their approach to adding more “green hosting.” What does this look like? Take a look at GreenGeeks Web Hosting.
The company purchases wind energy credits equivalent to triple the energy it uses. In marketing terms, the company’s hosting plans offer “300% Offset with Renewable Energy.” If you’re interested in making a similar report to companies, look into the company’s reseller program.
How to respond to this green trend
As Internet companies grow, consuming more power, you need to decide whether you’ll contribute to the problem or the solution. One solution is to purchase green energy credits. You might also look into better power efficiency software to optimize your company’s hardware. If your company uses a reseller arrangement, consider adding green provisions into your contract.
Trend 8: Web hosts need to improve their management systems
Once you grow beyond a handful of clients, managing your client needs becomes a challenge. There’s too much information to retain correctly. How do you keep WordPress updated for your clients? How do you monitor backups and uptime for everyone?
This trend is all about the challenge of effectively managing growth. An IBIS World publication estimates that the web hosting industry will grow 7% annually for the next several years. Is your web host ready to take your share of the growth?
How can you improve the customer experience without adding a small army of support staff? The Plesk Hosting Pack because it will address your security needs. It also includes support for Domain Name System Security Extensions (DNSSEC) and Kaspersky antivirus support. Check our product selection – You’ll see we make it easy to quickly add and configure new servers as you grow.
How to respond to this management trend
There are 2 ways to invest in improving your management.
- First, educate yourself on business systems.
- Secondly, invest in web management tools like Plesk’s Hosting Pack to automate repetitive admin tasks.
Trend 9: Hosting data centers are disappearing
Web host companies used to invest in building their own data centers. For small companies, this meant buying and managing a half-dozen servers. Larger web hosts would purchase and manage much larger facilities. But all that’s changing now! Industry research found that the number of data centers peaked at 8.55 million in 2015. That figure is projected to drop to 7.2 million by 2021.
How to respond to this data center trend
If your web host operates a data center, it’s time to evaluate that investment carefully. Unless you happen to have unusually demanding customers like banks and governments, there’s little need to own and operate your own data centers.
Use these trends to grow your web hosting business
Security, value-added services and anxiety about personal privacy add up to make web hosting a more demanding business. If you want to stay in business, you’ll need to increase your efficiency and management controls. Sit with your management team and review these 9 trends to see what part of your business plan you need to change.