Industry Analyst & Strategist
The wave continues: new partnerships, acquisitions, and services in the web hosting industry—an industry that is undergoing significant change. Emerging technologies and evolving customer expectations have shifted the landscape and many are curious as to what 2020 holds. One of the biggest trends I’ve seen is increased specialization to address the increasingly complex needs of both SMBs and enterprises. To dig deeper into this and other trends, I asked the experts for their thoughts, predictions, and advice on next-gen web hosting.
This is the fourth in a series of Q&A articles with thought leaders within the web hosting industry. My fourth interviewee is Chris Lema, VP of Products & Innovation at Liquid Web.
Robert: We’re seeing a big wave of acquisitions within the web hosting space. What do you think this signals in terms of the new landscape of the industry?
Chris: I think acquisitions have been and will always be a part of the business landscape. So in reality I don’t think there are any different signals coming out of the recent acquisitions. A company is going to grow – organically or acquisitively – and each presents its own challenges. So I would imagine we’ll see more and more of it. When it comes to hosting, I think the bigger question of these acquisitions is what it means to a customer. And that often comes down to whether the companies owned their own data centers or not. If they did, then you may not necessarily see tons of site migrations. But if they didn’t, then you might see a wave of migrations to consolidate costs – and that’s when you end up seeing customer churn because those migrations can be painful.
Robert: What is your big prediction for web hosting in 2020? Who will the big players be?
Chris: I don’t know that I have a prediction for hosting in 2020 but I have one for 2025 or 2030. The further out you get, the more I’m convinced it will be Google, Amazon, or SalesForce that owns everything. These are big companies that are driving serious growth! The only way around it, is to specialize. But that’s a small part of the overall web hosting space. So while I think there will be dedicated and focused solutions for specific niche dynamics, my prediction is that all the general hosting will get consumed by those three.
Robert: What services set web hosting companies apart from the competition?
Chris: I think two things help set a hosting company apart from everyone else in their space – deep domain expertise, and a consistent focus on innovation. By domain expertise I mean, how well they understand the business that their customers are in. When all they know is hosting, then they’re putting themselves in a commoditized service that simply competes on price. But if they know the domain that their customers business lives in, the level of support, the kind of support changes. And they become a partner to their customers. As for innovation, most hosting companies keep adding features but the core of their platform doesn’t change – because they’ve built their solution on another provider, or because they don’t want to reinvest in it, or because the change would take too long and cost too much. As a result, we see a bunch of hosts that just keep pitching cache as the solution to performance – but it doesn’t work for eCommerce or membership sites that have high concurrent users logging in. At Liquid Web we started tweaking PHP Workers to make sure logged in users were getting a really speedy result.
Robert: Do you have any predictions in terms of website design trends for 2020? With mobile traffic eclipsing desktop traffic, responsive design/mobile-first is table stakes. But what other projections do you have about how web design trends will begin to take shape in the next year?
Robert: How will web hosts need to adapt as website creation gets “easier” and more complex at the same time. Anyone can build a website, but there are a lot of emerging best practices that major companies will be looking to abide by. How can web hosts best serve these enterprise customers?
Chris: I think the biggest shift hosts need to embrace is the fact that they can’t just “rent a box” out to customers and then blame them when the code performs poorly. The finger pointing that goes on is insane. So that means hosts have to write code that reviews, monitors and catches poor performing code – simply as a way to partner with their customers better and to help them navigate the performance dynamics of these sites. SEO is everything and Google looks at speed as a strong signal. So hosts need to work on the partner model for what they’re doing with agencies and corporate developers that are building these sites.
Robert: The digital threat landscape is evolving at a lightning-fast pace. What are the major security concerns that web hosts need to consider to best serve clients?
Chris: I mentioned static sites earlier in this interview – it’s one of the ways I think hosts need to think about how they’re going to help their customers navigate the digital threat landscape, for sure. Another way I know we, at Liquid Web, are thinking about things is via Web Application Firewalls (WAFs), CDNs, and more. In other words at layers that are not site-specific. Hosts know this. But customers often look for a plugin to solve their security. So we work on customer education, and more and more work at the edge to keep threats out.
Robert: Have you seen any trends in terms of partnerships or acquisitions in the web hosting space that you think are important to note? What do you think these signify
Chris: At Liquid Web, particularly with our WordPress and WooCommerce products, we’re the market leader in bundling. It’s a kind of partnerships where we use our scale for good. We negotiate deals with other vendors to bring their products to our customers as part of a complete solution. So if you’re a WooCommerce customer, we know you need reporting – and reporting that won’t slow your store down. So we partnered with Glew.io to deliver some incredible reporting. Normally you’d pay $399/month for just Glew, but we include it on all our plans over $249. That’s an incredible value for the stores that we know need it. So I hope we see more of those kinds of partnerships.
Stay tuned. I will be interviewing more brilliant experts in the coming weeks to get their take on where hosting, SaaS, and open source are headed — and what can be done today to prepare.