With the advancement of technology and customer access, setting up your own web hosting company has gotten a lot easier, but the model is constantly evolving. 20 years ago, during the beginning years of the Internet, users were limited to a few web hosting providers. At that time, the size of the memory / hard drive was limited to between 35 KB and 2 MB, depending on the provider. With shared hosting, the average storage space was only 153MB.
In 2002, one of the leading Florida hosting providers had three servers in one bedroom. At that time there were 39 million websites on the Internet. We have 1.7 billion people and we are still counting.
According to Moore’s Law, devices that provide the Internet, from storage to bandwidth, double every two years. The internet started with a few hosting providers, but today there are thousands of hosting companies that have very similar hosting plans. The era of cheap dedicated servers and shared hosting is coming to an end and personal, cloud-based options are becoming increasingly popular. Gartner, the world’s leading research and consulting company, predicts that by the end of 2020, 41% of the workforce will be working on public cloud platforms.
With such dynamics likely to affect the web hosting business and every stakeholder involved, it becomes necessary for us to understand how the web hosting business model is set to change. If you are a reseller who has purchased a plan from one of the best reseller hosting providers, you should definitely read this article. So, without further delay, here goes.
How easy is it to start your own web hosting company?
In all honesty, it’s not easy at all. Many advances have been made in the industry that has made building infrastructure for a hosting company much easier than in previous years. However, there are still stories of “summer hosts”, small hosting startups that mostly pop up at the beginning of summer and represent a younger and less experienced group of entrepreneurs. They have a bad reputation for starting a business, but they are leaving their database and business due to a lack of resources or technical knowledge at the end of summer. This makes us wonder how the web hosting business is changing?
How is the web hosting business setting itself up for automation in the future?
Modernized automation devices like Docker, Openshift, CloudLinux, cPanel, and WHM robotize schedule, support, security, and monotonous tasks. These tools are somewhat new to the hosting business and are intended to make growing your facilitating environment simpler and easier to make do with fewer individuals. Web hosting organizations presently don’t require a total group of sys architects or admins.
Reaching potential customers is more practical than ever and, thanks to social media and social media marketing, also possible with little money.
Paid advertising works for both small businesses and large businesses. Whether it’s a big company like Microsoft or a grocery market near you, anyone can use paid ads on platforms like Facebook and Google Adwords to reach a specific audience.
New business targeting offers advanced marketing capabilities that were previously only available to large, high-budget agencies. With paid ads, you can segment your user base and create interests and audiences that are aligned with your interests. You can also categorize whether these segments need more information. Or even if a customer needs a reminder to add an item to their shopping cart and return it.
Then there is Search engine optimization (SEO) which allows users to search for the information they are looking for, i.e. only visible when you use Google or other search tools. In addition, the Google Search Console offers tools to maximize the speed and visual appeal of your websites, as well as SEO rankings that support SEO and are more visible to more people.
This is just a brief overview of the tools that entrepreneurs can now use for free. The situation of start-up web hosting companies is constantly changing and every company has to adapt to stay agile and competitive.
Web hosting knowledge and systems management experience is also essential to starting a web hosting business and striving for success in a highly competitive market. However, advances in automation and tools, combined with lower SEO payments, marketing restrictions, and ad listings, make the hosting industry more accessible and affordable to small and medium-sized businesses.
As of 2020, hosting companies can offer a completely different environment to their customers. The most important and complex question is: “Who are your customers?” The web hosting business model depends on the type of your customer.
Some popular customer-based web hosting models today
1. SAAS hosting business model
As recently as 10 years ago, web developers and designers were the largest web hosting clientele with a growing small business market. Today, many website solutions offer the SAAS (Software as a Service) model, which is a simple starting point for entry-level and SME markets. You no longer need to study computer science or design to create a website. These SAAS operating systems include domain registration, drag-and-drop site builders, e-commerce solutions, SEO optimization, and digital marketing.
To maintain that market share, most hosting companies now offer website builders and other managed solutions to their customers. Some of the world’s largest web hosting providers focus on complete SAAS service/website solutions rather than traditional web hosting models. The focus on customer solutions is the clear winner of the current host company.
2. Web-centric hosting business model
Web-based hosting has been another popular business model over the past decade and will continue to provide great solutions for small shared hosting providers. The web-based model focuses on a single host market where you can spend 100 hours of your time and support. The world of content management systems (CMS) is one of the most popular web-based models that companies have focused on managed hosting for WordPress, Joomla, or Drupal.
To be successful in a web hosting business you need to be aware of changing roles and opportunities.
3. The business model for cloud hosts
For large hosting companies, the future is shifting towards cloud-based solutions for artificial intelligence with multiple servers. Today, cloud services and hyper services are attractive to medium-sized and corporate customers. Flexibility and access to cloud services are quickly becoming industry standards when needed. Many business models revolve around cloud services, and cloud storage providers are one of the business models that will be welcomed in the next decade. cPanel and WHM have worked with some of the largest large corporations. You can get the full picture of cloud hosting by comparing Google search results for web hosting and Amazon cloud hosting (AWS).
With these models, that too changing dynamically, it can only be said that any reseller hosting provider should ideally adapt to the change and make amends to their business journey and plans.
The web hosting business is constantly evolving and we all have to make business decisions that we never thought of in the beginning. Starting your own web hosting business is a much more realistic option today than it was 20 years ago, but starting a business is still a challenge. Here is hoping that you have understood how the business models in the web hosting world are changing. If you want to know more or have any queries about this article, feel free to share them in the comments section below.
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