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Is traditional hosting dead?

Pavel (Pasha) Ershov | July 8, 2014
Web hosting is making a move from generalist to specialist.

Before cloud, there was Web Hosting. For decades, traditional web hosting providers had a solid business opportunity and a seemingly never-ending supply of new and growing customers. With over 600 million web sites worldwide, hosting web sites and web applications is one of the top infrastructures workloads delivered by hosters, large and small. In 2013 alone 300,000 new web servers were spun-up in datacenters around the globe.  But that world is now gone.  AWS, Linode and Digital Ocean killed it. Main-street businesses are now moving to the cloud and the traditional hosted infrastructure approach does not work for them.

This market shift has caused the face of the web hoster to change forever. If you look at Google Trends as an indicator of broad market trends, you'll see something interesting. Web hosting is making a move from generalist to specialist. The general search terms that used to drive the market - such as web hosting, e-commerce hosting, dedicated server and PHP hosting - have all been dropping off sharply in favor of specialized terms such as WordPress hosting, Shopify, Linode and web app hosting.

The increased value placed on web presence by businesses is creating a need for higher-value and more managed services from web professionals such as web designers, web developers and other digital agencies. Edge Strategies1 estimates that web professionals influence approximately 160,000 web servers per year, yet most providers of web infrastructure are not targeting this critical part of the value chain.

Given these industry changes, one way for infrastructure hosters to grow market share is to create specific solutions for each target segment.  Building customer solutions around a powerful web management toolset is the key differentiator for infrastructure providers. This includes looking into the specific needs of four distinct audience segments:

  • Web Administrators including IT professionals and website hobbyists that host self-managed sites
  • Web Application Developers that host web applications
  • Web Professionals and Digital Agencies that manage and host WordPress sites
  • Service Providers that host and resell unmanaged shared accounts

Each of these market segments gets a specialized version of the software that best suits their needs, so that hosters can create profitable, targeted infrastructure solutions.

The global marketplace has changed the web dynamics, which has led to the evolution of web hosting. Infrastructure providers must break out of the traditional control panel mindset and start understanding how a high-value web management solution will create a strong, growing and resilient business opportunity that will carry them forward. 

1 Edge Strategies, Web Value-added Provider (VAP) - Understanding Their Business Models and Identifying Opportunities to Influence their Behavior.

Pavel (Pasha) Ershov is vice president, Service Providers Business, APAC at Parallels 



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