The Future for the smaller web hosts
What will the future of web hosting look like? At the moment it looks like the growth for Internet business is still very consistent and the overall future looks bright. More business will go online if terrorists continue to pose a thread when being in public places. Climate changes and events might also be a mitigating factor when it comes to online growth. The future for web hosting businesses should be a bright one, right?! But how bright is the future looking for the average web host out there?
About a year ago consolidation on the market was a hot topic and I think it still is. Especially the smaller web hosting businesses will see pressure in regards to keeping prices high enough to make a fair living and to be able to invest for future growth at the same time. Pressure will also come if another large market player enters the market or would expand its efforts to get more business. As an example – search engine providers are already looking for more ways to diversify business. Yahoo made the step into web hosting already – others like Google.com might follow. Every once in a while rumors already have it that Google’s debut as a web hosting provider is not that far out. So far this has not proven to be true, but who knows. If Google follows "1&1" business model and arrives with a fully automated hosting platform the smaller market players would likely feel the heat. Google is a trusted brand name with great products. A web hosting offer from Google for a low price might just what many folks would be waiting for. eBay could also be a potential candidate for this kind of service. A large established user base with a large connection to web hosting in a certain – who knows.
Automation and self-service options could also be a problem for the smallest of the smaller web hosts. If larger investments into new technology are needed the cash-strapped smaller web hosts will eventually hit a show stopping event and have to decide to either risk not following the market or to eventually sell their business to somebody with enough cash.
Overall smaller web hosting business should carve out a niche market and serve that market with full force to make sure that they do not open a back door to failure. If serving a niche market is not an option for a web host he should consider aggressive growth to be needed to stay competitive in the long run. Market consolidation might happen upon us faster than expected. "Expect to be eaten ….!"