Bad Web Hosting Dangers – Here’s How The Industry Works

The web hosting industry is incredibly competitive. Shared web hosting -- a kind of hosting where multiple websites share computing resources -- is particularly competitive among cheap web hosting companies.

Show Notes

Here are links and resources mentioned in today's video. Enjoy!

Transcription

Over the years, web hosting has largely become commoditized. It isn't nearly the specialized service that it was when I first got into web design over twenty years ago. Back then, there were fewer web hosting companies, and monthly hosting costs were higher.

Now, web hosts largely compete on price, creating a commoditized industry that's in a free-fall lowest price race to the bottom.

But for online business owners, creators, and marketers like you and I who are looking for the best web hosting for small business, these lower prices often mean poor reliability and low-quality service.

Learn how to build your small business website!

From a business standpoint, there are only so many ways that web hosts can increase profits. They can either innovate new products and services, or they can reduce overhead.

Well, since web hosting (particularly shared hosting) is essentially a cheap commodity, the easiest way for hosting companies to grow is to begin buying up smaller hosting companies, and then cut their operating costs. And that's exactly what's happening.

A small handful of very large web hosting conglomerates are expanding their businesses -- and their profits -- by buying up long-standing, well-run hosting companies who've built great reputations and loyal customer followings.

The business model for these conglomerates is, essentially, to buy existing hosting companies in their entirety -- including their loyal, paying customers -- and then cut that company's overhead by gutting support staff and increasing prices.

This is great for increasing profits. And terrible for once-loyal customers who are left in the lurch with poor quality support and faulty features.

But so long as the host that's been bought out can maintain a half-decent reputation (and there are a variety of schemes employed do this) then more new customers will continue to sign up versus disgruntled customers leaving the service.

It's a kind of web hosting Ponzi scheme -- so long as more new, unknowing customers are coming in the door than are leaving in frustration, the hosting conglomerate can continue profiting. That's how the industry works -- that's what's going on.

So where does this leave you and I? On a constant merry-go-round: Signing up with a new hosting company for our business, increasingly becoming discontent with their service over a period of time, reaching a breaking point, getting fed up and moving to a new host, and repeating the cycle.

And here's the kicker -- we're very likely to sign up with another web host that's owned by the very same conglomerate. It would be like getting fed up and swearing off ever purchasing a Chrysler ever again...and then going out and buying a Dodge.

So how do we get off the merry-go-round? How can we ensure that we're with a top web host for our business, who's also reputable? A host who cares about its customers?

First, avoid any hosting company that's owned by a hosting conglomerate called EIG. This includes BlueHost, HostGator, Domain.com...and over sixty other hosting brands.

Second, stick with solid, reliable, hosts that remain independent. Here, my top recommendations are Web Hosting Hub, SiteGround, and WP Engine. Think of these as "small," "medium," and "large."

Depending on your needs, one of these will be a perfect fit. Check the notes below this video for links, as well as links to content I've developed that compare these three hosts.

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Geoff Blake, Ten Ton Online

Hey there, I’m Geoff! Business, marketing, and the web can seem like a tangled, confusing mess, right? Well if you wanna get clear, straight info on all this stuff (no gimmicks or hypey nonsense)...then you're definitely in the right spot! Start here (free!)