HostingCon 2010: The Demise of Hosting – What’s replacing it

I’m in Austin, TX at the moment attending the biggest webhosting event in the world called HostingCon. This is my fifth year at the conference, and the second in the row as a speaker. HostingCon never disappoints especially since iNET Interactive took charge.

I presented on Monday July the 19th with CS Expert Douglas Hanna. The subject was “Building Customer Focused Company regardless of your size”, we were pleased with the amount of questions and positive feedback received. For more details check out The Web Host Industry Review.

Throughout the conference I made sure to attend as many sessions as possible. The Sales/Marketing track was my favorite and Dave Murphy’s (Hostopia) presentation called “The Demise of Hosting – What’s replacing it” definitely stood out.

Dave suggested, to stay competitive we (hosters) need to look much further than hosting offerings (this comes as a given these days ). It’s all about the “Value added products” now –  in many cases have nothing to do with hosting, but what they bring on top of it. Hostopia calls it ‘Inside the Box” approach..

Here are some of the main points Dave presented:

SMB spends on average $1700 to build a website and  $1000/year to host it

The biggest challenge SMBs face is finding new customers, as a result during the past few years we have witnessed few firms experiencing flat growth or even worst – going out of business.

Challenges SMBs face:

  • Top line growth
  • Customer Retention
  • Most difficult job is sales (#1 pain point – sales)

Half of SMBs didn’t have marketing budgets and do it on their own, not always successfully due to the lack of expertise. Majority spend $5000/year on marketing

Unmet needs of the SMBs:

  • Cost effective leads generation
  • Proactive customer retention, cultivation and management
  • ROI effectiveness

59% smaller SMBs 1-5 employees have low satisfaction rate with their sites

64% of SMBs need to update the sites within 6 months

Here are some of the areas were SMBs want to grow:

  • Email marketing
  • Website hosting
  • Direct mail marketing
  • SEO
  • Mobile marketing – new niche
  • Search engine marketing

The SMBs are confused – too many choices while 60% of them looking for one stop experience.

  1. Website design
  2. SEO
  3. Lead capture
  4. Lead generation facilitation
  5. Help our customers to see what is working (analytics.. tracking)
  6. Help them with other online processes/services
  7. Help them to retain their clients
  8. Leverage their online investment
  9. Be a trusted advisor

Conclusion: Mid and small size hosting providers are now to get invested in the business success of their clients (something larger players already picked up on). Ten years ago no one imagined traffic and storage being taken for granted (well we did.. but not to this extend). The hosting industry as we know is transforming, I wonder what the next five years will bring.