Industry Analyst & Strategist

How the Right Partnerships, Acquisitions, and Services are Paving the Way for Next-Gen Web Hosting | Part 5

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 fifth in a series of Q&A articles with thought leaders within the web hosting industry. My fifth interviewee is Emil Falcon, Founder & CEO of Web Hosting Canada. Emil’s areas of expertise include optimizing workflows and enhancing system performance, security and reliability.

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?

Emil: Acquisitions aren’t new, and they certainly aren’t new in the hosting industry. As the industry matures though, providers are finding it harder to acquire new clients organically and are often jostling clients from one another. Acquisitions enable faster growth and lower costs through economies of scale and the industry continues to consolidate as the margins get thinner.

The latest round of hosting acquisitions I’ve been seeing seem to be initiated by larger equity firms, with varying degrees of long-term success. They buy out multiple brands but often end up alienating their best staff and most of their top clients. EIG tried this years ago and the process appears to have been fraught with problems, not to mention the fact that their stocks have never quite recovered. Oakley Capital bought cPanel & Plesk in 2018 and have started milking these companies dry too, with a cPanel price increase slated to come into effect September 1 that’s excessive in both size and scope, and likely to create a PR nightmare for them. As soon as these businesses get focused on money over technology or quality of service, things tend to take a turn for the worse.

What I’m also seeing a lot of lately are hosting providers acquiring software or technology solutions in order to integrate them into their service offering, rather than building them out themselves in-house, or renting them out. This is a positive trend in the industry, and a sign that hosting companies are looking outwards for future growth opportunities beyond traditional, general-purpose hosting.

Robert: What is your big prediction for web hosting in 2020? Who will the big players be?

Emil: The big players will keep trading clients as competition gets fiercer and specialized solutions providers keep getting better. The successful players will be those that will be effective at zeroing in on — and catering to — niche markets and those that will continue innovating all while keeping their costs low.

Robert: What services set web hosting companies apart from the competition?

Emil: Services that help users get more done, faster or better. For WHC, one such example has been our Managed WordPress Hosting. Something that could have been done through traditional web hosting with some technical expertise can now be done with Managed WordPress Hosting 10 times faster all while adopting recommended performance, security and backup configurations out of the box.

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?

Emil: Data driven website design is going to become bigger and better as businesses continue to tweak their online sales funnels to improve conversions based on the metrics they’re gathering. It really doesn’t matter what a website looks like, so long as it’s effective at converting. It just so happens that websites that look good generally convert better, but that’s a moot point. Design quickly, release, measure, and iterate often. Focus first on quality content, and only once you have it should you start to even consider design.

If you’re looking for an actual design trend, isometric designs have been (and seemingly will continue to be) trending. As far as websites go, isometric designs tend to be cleaner, crisper, and more lightweight than those using more traditional photos, and even scale better on mobile devices so they’re a better choice for responsive websites. They don’t work for every industry, but they seem to be doing well in the tech and financial fields.

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?

Emil: Web hosts need to be active partners in their clients’ success if they want to see healthy renewal rates and sustained growth. This means being active mentors by providing solid onboarding and ongoing training where they can encourage best practices. Step by step wizards, informational articles, ebooks, LMS systems with video training, useful email newsletters, and regular social media tips & tricks are just a few ways of doing this today. These will benefit small and enterprise clients alike, with different tracks targeting specific customer segments.

It also helps when your proposed tools and solutions already enforce the best practices that you’re advocating.

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?

Emil: As 5G approaches primetime and smaller devices get more powerful, hosted systems will become more susceptible to large scale DDOS attacks. Network security and CDN providers will likely experience important changes as the bandwidth pipes get bigger and the risks increase. When your network gets taken down by a botnet consisting of compromised “smart” toasters for 48 hours, it may be too late to start thinking about adopting sound cyber-security measures.

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.

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