Web Hosting Is Dead: Why You Can't Find Hosting Customers Anymore

Corey Northcutt    By under Managed Service Marketing.

Hosting is big. Really big.

Even today, you could say that it's as big as the internet.

So why are so many still struggling to find web hosting clients?

This world is all new since I built a hosting provider called Ubiquity.  I've helped dozens of other hosting founders be successful since then.  I've also seen failures.  Pretty much all of them happen when a brand isn't willing to evolve.

Tactics and tricks are a bad replacement for vision and strategy. You could hire an agency like Northcutt to build your SEO and content month-by-month and we'll do it as well (or better) than anybody. But, if your company's vision is still the same as last decade, that's why you're failing.

If your company's vision is still the same as last decade, that's why you're failing. Click To Tweet

You're Probably Using The Wrong Words

Are you like I was? Telling friends and family that you did "hosting" for years. Nobody got it. You used analogies. "I'm where the internet comes from." "I run all the websites." "It's just digital real estate." "They're other computers, only they send you stuff."


Then it all changed. Everybody was talking about "the cloud". Hosting founders argued about how nobody had a "true cloud" and why "cloud was terrible anyway". We watched epic meltdowns of early tech. High-end hosts like Media Temple had "grid" outages spanning multiple days. Some for weeks. Others were ruined by corrupt data; losing huge swathes of data and backups forever.

We fought about it. A system designed to eliminate a single point of failure became the most volatile point of failure ever. In of itself. Cloud was dangerous. Scary. Public uptime trackers proved that it was less reliable.

It was wrong for our industry.

Meanwhile, the hosting market understood the cloud. Somehow. My same friends and relatives did. I didn't. I was more confused than ever. So many conflicting definitions. Many cloud offerings were no different from the crappiest web hosting. It didn't matter. Marketers were profiting while sysadmins were fighting. Hosted services hit an all-time low for uptime. Nobody cared.

It was right for our market.

cloud vs hosting

"Cloud" achieved the mass market success that "hosting" never did. Period. Before you say, hey, they just swapped places: they didn't. Google is a bit more popular than it was in 2004. According to JumpShot, daily search volume has doubled in the past 5 years alone.

Keep in mind that "hosting" sets the Y-axis in that graph. By this I mean: if you take away "cloud", the "hosting" line won't magically jump upwards.

Less people are searching "hosting" than they were before. A lot less.

My takeaway? Why on earth would you focus your message on "hosting" these days? Sure, you can still use that word. Your industry buddies from 15 years ago will still seek it out. Others from your generation. The next generation won't.

Many hosting founders need this paradigm shift. Their market grew younger. Some are still playing mental gymnastics at defining "cloud" and fighting it. In most cases, they need to embrace it. Words matter in digital marketing.

Changing your website and collateral is easy. Fixing your SEO and content marketing is harder, but you can do it in one quarter.

The true battle is changing hearts and minds. Convincing the clients that send you referrals. And maybe stopped. Those that knew your brand as part of the past and not the future. For years, up until yesterday.

Slapping "cloud" on your website won't skyrocket sales overnight.

But it's step 1.

Your Experience Is Probably Antiquated

2000. You could install any web hosting control panel for an instantly desirable offer. Minds were blown.

2005. The market sought out cPanel. It played nicely in an A/B test vs. other offerings. There's a reason that it was never marketed as "Web Host Manager". The WHM name makes more sense, but it was the cPanel market that drove revenue.

2018. The market kept raising their user experience (UX) expectations. Most web hosts stopped evolving theirs at least a decade earlier.

And the market fractured two ways.

The first want everything simple. Either they never learned HTML, or, they did and they don't love it. That describes most of the market; especially the newer end. They're moving to content platforms like SquareSpace and ecommerce platforms like Shopify.

They're marketers, hobbyists, entrepreneurs, and business-minded SMB people.

The second wants power. They want control and flexibility. They want all the support they can get but never at the sacrifice of access. They're dependent on niche web services and APIs. AWS and Azure are gobbling them up.

They're suits, code enthusiasts, and professional DevOps specialists.

Here are more search trends to make you sweat.

wordpress vs others demand

shopify vs magento demand

Correlation isn't causation. But come on: the tides are shifting. They already have for ecommerce. You can project that shift a few years out for WordPress.

Still not convinced? Gaze into the future. Here are a few more niches that the SaaS revolution already consumed.

project management demand

quora vs forum demand

Feeling motivated for change yet? Maybe your solution is more hands-on. Your market wants code and command lines, right? I don't think that's necessarily true, but that's another topic entirely. For now, there's a graph for you too.

aws vs hosting

Your brand should be focused on one of those forks: making life simpler or more advanced.

Either way, it needs to be getting easier and friendlier every year.

If you're in the first boat, look at how WP Engine is doing WordPress or how Liquid Web is doing the WooCommerce plugin. Their PaaS solutions are drifting towards SaaS. They're melding open source solutions to purposed platforms.

If you're in the second boat, look how many are integrating (or just flat out managing) AWS and Azure. It's all about a centralized interface for IaaS that does more. If you look for epic success stories, the core of that message is always about care, not technology.

RackSpace didn't get where they are by accident.

Your Focus Is Probably Wrong

If the ideas above are a surprise, you could be in trouble.

So far, I've only spoken about today. Tomorrow is what matters.

Even today, hosting is the wild west. The marketing at most web hosts isn't run by marketers. Yet. I can't say that about any well-developed industry. Too many still aren't willing to give untapped market potential one day per week of executive-level attention. Their heads are down in support tickets 24/7. Those are the brands that we'll be saying goodbye to next.

Unless you're running a giant colocation facility, competing on price is a mistake. Even if you're winning right now. The "big money" in hosting is getting bigger. Already, there's enough to allow a handful of players to just burn venture capital for years (if not decades) to starve you out in a price war.

Barring that, you have three options.

  1. Care more via your solution.
  2. Care more via your people.
  3. Do both.

Have you heard the expression "you can't scale caring"?

It's true. Forget about all of this:

  1. Your hardware
  2. Your SLAs
  3. Your deals
  4. Your network capacity
  5. Your fancy DDoS appliance

Placing any of these the center of your value proposition is a mistake.

Because when things "just work" everywhere, none of that matters. And the tech will keep getting better. Your network and hardware specs win you comparison shoppers. Side-by-sides against D-list players. But they've been fizzling out. Expect those side-by-sides to only fizzle out more.

So enough gloom: how do you win?

The good news is that the market isn't shrinking... it's still expanding. Rapidly.

It's also rebranding and spawning all kinds of new industries.

You can care more using your solution. My favorite way to do this is to always listen to your most obnoxious support requests. All you can stomach. In sales, they call those pain points. Do a little market research to figure out if there are others like them.

If so, adapt. Specialize the platform. Change the way you speak about your vision so that it's about them. Customize the interface for them. That's the Platform as a Service (PaaS) model at its best. Build a better platform for just one person.

There's a wrong way to do this, though. Focusing too much on "under the hood". Jef Raskin put it best: "As far as the customer is concerned, the interface is the product."

Jef Raskin put it best: 'As far as the customer is concerned, the interface is the product.' Click To Tweet

I don't care if what you're building is OnApp, SolusVM, or whatever else under the hood. Your client sure doesn't. They care about what they can see and feel, so focus on the experience. cPanel isn't good enough now. If you're hosting Drupal, you need to give the best Drupal-purposed experience ever.

Next, stop building cloud platforms. Everybody thinks that they need their own. I guarantee that 80% of your clients don't care if you run OpenVZ or something homegrown. Maybe your solution is amazing. Special. Beyond what Amazon and Microsoft have dreamed up on their 10-year plan. I have my doubts.

With 1-2 exceptions, I can name no brands that have enjoyed meaningful growth as the direct result of proprietary, all-purpose cloud technology. I can name hundreds that set out to build their own.

All failed on some level.

But when one door closes, another opens. I've seen some sketch customer service over the years. You know who holds the title for worst customer service, year after year? Brands like AT&T and Comcast. They win awards for it.

They've both offered web hosting too and neither became significant players.


Because you can't scale caring.

We can't say for sure what technology holds next. Maybe a cryptocurrency will distribute everything from smart fridges Pied Piper-style. But you know what will still be in demand?

Human empathy and patience.

Build your cloud offering with a unique flare of care. Design it for a very specific pocket of the market. Do that, and I promise, there's more opportunity in hosting than ever.

Just stop calling it that.

Stop thinking of it as that.

And get to work on becoming better than that.