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Web hosting companies need to fight new challenges over and over in order to stay on top of the industry. Otherwise, they will helplessly watch customers going away and seeking hosting solutions elsewhere. These are some of the toughest challenges web hosts are facing in 2020.
Challenge #1: DIY Competition
WordPress Premium, Wix, Joomla, and many more website builders managed to make creating new websites look like a piece of cake. Furthermore, there are bloggers publishing content with “Do it yourself” (DIY) explanations of how to create a WordPress blog quickly. Logically, such content leaves the impression that websites are easy to build and set up. You’ll now ask yourself in what way does this affect web hosting companies? This is how: as a web provider, you’ll get a large number of customers who think it’s easy-peasy to set up a website. More exhausting is that some of them are assured that all web hosts are the same. And why wouldn’t they think that? All companies promise they can easily set up websites.
For instance, many web hosts claim they can set up MySQL database and MySQL hosting to clients in, like, 5 minutes. And yes, setting up the world’s most popular open-source database such as MySQL is simple. There are a lot of DIY tutorials on this matter. However, it’s not so easy to find a good MySQL hosting. All providers include some basic features in their MySQL hosting plans but what differentiates one service from the other is extras they offer. Some MySQL hosts put price above performance. And that’s good but a service that’s cheap doesn’t suit everyone’s needs.
How to deal with this challenge?
You won’t go far as a company by simply offering – a web hosting. You must provide your customers with some additional value, or feature. For instance, consider offering a quarterly security review for your customers who have an e-commerce platform on your servers. That’s not a bad idea on how to further develop your business. What do you think?
Challenge #2: Increased Demand for Managed Web Hosting
Challenge #2 is built upon the previous one. If you’re new to websites and have limited time, think about managed hosting. It’s not a type of shared hosting or VPS hosting, and it’s not even close to dedicated hosting, but it applies to all of these hosting servers. Instead, a managed hosting means that a team of experts will manage your server and website for various things like updates (on shared servers) and routine maintenance, backups, and more (on VPS and dedicated servers). However, this doesn’t mean that these experts will build your website.
Now, since managed hosting (especially fully-managed) can include one-click installation for most commonly used applications (such as WordPress) and databases, numerous managed hosting providers start their businesses without compulsory knowledge and then perform risky management services that result in problematic data recoveries. Fully-managed hosting is a very popular solution if you have non-technical customers. That’s the case with e-commerce websites who must have dozens of plugins, even CDN (content delivery network), running to increase conversions, manage security risks, and keep media flowing quickly.
How to deal with this challenge?
Web hosting trend is an opportunity for hosting providers to offer greater value to their customers. You should turn this to your advantage but for that, you’ll need to offer more value internally, show bigger management effort to resume providing good customer experience: build a team or, maybe, connect with third parties…
Challenge #3: Price War Intensifies
The previous challenge pours into the next one. Increased demand for fully-managed web hosting has two sides. One side is increased demand (challenge #2), while the other side is the beginning of a “war” for prices – more specifically, a “war” for less complex services. If your hosting company offers simple hosting or DIY services, you can’t keep high prices as if you’re offering complex services. You need to offer affordable prices to your customers. But since there will be more companies like yours having the same tactics, study what kinds of discounts large and popular Web hosting companies offer. For instance, offer instant cut prices in order to attract customers for the long term.
How to deal with this challenge?
To steer your company through this trend without ruining the business, always make a good calculation. Figure out costs but also see in which areas of management you can be more efficient. Do you pay third parties for software or hardware? Can you reduce those bills? But above all, figure out if you’re losing customers because of the competition for prices.
Challenge #4: Simple Hosting Goes Into Oblivion
Don’t mix this challenge with the previous one. When we mentioned “simple hosting” we didn’t mean basic hosting. Normal, simple, hosting usually includes these services: web design, marketing, SEO, email, security in terms of SSL and HTTPS, support… Does your company offer all of these? If not, you’re losing the battle for the market because it means that you run a basic web host service.
How to deal with Web hosting challenge?
To survive in the web host market nowadays, you need to offer some extra services. Ask yourself: Can you do more to improve your customers’ security needs, or how can you provide your customers with better technical support?
Challenge #5: HTTPS Is a Must
Although there are almost no boundaries with the Internet (in terms of what can be done on the same), it opens up a lot of possibilities for the other side of human’s character: a misuse of something that’s essentially here just to make life easier for people on the planet. We’ll clarify…
HTTP (HyperText Transfer Protocol) is a protocol used for communication between the user’s browser and server of the website. Its actual purpose is to authenticate both users and the website as well as to transport data in both directions. What’s always a dilemma is the authentication of website users. Is there any third party in addition to the user and the website who “eavesdrops” to the data being sent to the website, as well as the information the user receives in response to it?
These are just some of the issues that the successor to the HTTP protocol in the form of its upgrade is trying to resolve – HTTPS (HyperText Transfer Protocol Secure). To put it simply, HTTPS encrypts data between the users and the website itself – from the data that the user sends to those that he/she receives from the other side. Encrypted data is likely to be secure even if it’s in the possession of a third party – it’s very difficult or completely impossible to decrypt. That would mean that a third party who wants to know your data would need a “farm” of computers with the best processors and performance which would constantly work for decades to come up with original data.
When to use HTTPS? Always! As of 2017, half of all websites were already running HTTPS. In 2015, Google said it would favor websites with HTTPS in search results. In 2018, Google Chrome marked websites without HTTPS as not secure. It was a result of Google’s long-time attempts to move users away from unencrypted websites.
How to deal with this challenge?
If you aren’t offering your customers HTTPS, you’re already behind in the game. If you charge for HTTPS as a service, you’re also behind in the game. That’s because many web host companies offer HTTPS for free. So, give up on charging for it.
Challenge #6: Protect User’s Privacy
Somehow, 2018 was a breakpoint for security matters, especially in Europe, where the GDPR (General Data Protection Regulation) came into force on May 25, 2018. It caused a tremendous impact on business. Furthermore, outside of regulatory changes, a growing concern, a suspicion, about the power of large Internet companies has emerged. Of course, larger the company, bigger the scale of problems. Web hosts should learn lessons from these experiences. The customers and even government agencies just wait to report you if you fail to properly protect their privacy.
How to deal with this challenge?
There are 2 kinds of actions you can take:
1) Re-examine the way you collect and use the information provided by users. Track and report data breaches – it’s a must.
2) Advise and educate users on how to protect their personal info through, let’s say, newsletters or some kind of additional services.
Challenge #7: Green Hosting
As a machine or group of machines that receives, sends and stores data, the server is constantly on and consuming electricity. Being housed in data centres, servers run practically 24 hours a day each day, if we’re talking about large Web hosting companies. So, it’s clear that data centres run by using a significant amount of power consumption and sources. Why do these servers require a large amount of energy? Because they need to be kept running in cooled and controlled environments, which results in a significant carbon dioxide (CO2) output. Thus, they aren’t optimal for our environment.
Google, as the most popular search engine, set the example to others in this area as its data centres now consume 100% renewable energy by its global operations, maintaining a commitment to carbon neutrality. Google introduced Google Cloud Platform on which you can run your data and develop your apps with clean energy and with reducing your impact on the environment.
How to deal with this challenge?
Don’t be stamped as a Web hosting company that doesn’t care about the environment. There are two ways to deal with this trend:
1) Invest in renewable energy hardware, meaning – build your own wind farms or solar arrays.
2) Purchase Renewable Energy Credits (RECs). Renewable energy providers have created renewable energy certificates, which act as a tracking system for renewable energy to differentiate between electricity sources. Every time a clean energy power company produces a unit of energy it also produces a renewable energy certificate. This option might raise costs for the end customer.
Challenge #8: Do You Really Need a Data Center?
As a web host, you’ll always seek to reduce the costs of your operation, right? This challenge actually goes into your favour. How? You certainly got used to it, and that’s probably how you started your business, investing in building your own data centres. As a small company, you bought and managed half-dozen servers. If you are a larger web host, you purchased and you manage, logically, even much larger facilities. The trend has changed now. The industry research has found this: predictions say that the number of data centres that reached its peak in 2015 with at 8.55 million existing facilities is about to drop to 7.2 million by next year.
How to deal with Web hosting challenge?
The answer imposes itself from what’s previously explained. If you are web hosts that operate in a data centre, begin to evaluate that investment. You don’t have extra demanding customers such as, let’s say, banks? There’s little or no need to possess and operate your own data centre (s).
If you’re a web hosting company aiming to stay among the leaders in your business, gather your management team around and discuss the challenges, or trends, that are rapidly imposing in the web hosting industry in 2020.
