There are thousands of webhosting companies mushrooming all over the planet? Share your opinion why this industry is so competitive?
The costs to starting a "company" are simply too low. Anyone can purchase a reseller account and start selling hosting.
That and its quite easy to gain customers, there's tons of people who get fed up or something and start jumping from host to host. DP is like a warzone with hosts, especially when new ones open up, and old ones die because of lack of funds.
Because you can get reseller accounts for $5 and dedicated servers for $50. Or less. Of course they suck but it works for a few weeks, days, hours. thewird
Many of the sites that offer hosting oversell.. say 1000GB space and 5000Gb bw for $5 per month take all the customers... from sites that are legit and offer space that isnt over dold
Shawn_SycoBlue, if they wise up then how come most of the major hosting company's are still overselling... HostGator cracks me up with their "600GB Storage 6,000GB Bandwidth Host Unlimited Web Sites $7.95/mo" really now... Are they just gunna through their 1 hosting customer on a dedi that has a couple of HDD's and give them 6TB of bandwidth? Nah their gunna throw them on a server with a 500gb hdd and 10tb of bandwidth, along with 500 other customers who think their getting an awesome deal. The fact is the only way to survive is to oversell... its not likely that a customer is going to use the allocated space and bandwidth that the host sells. By far im not supporting the idea of overselling, but in reality, 1 in 500 people might get close to using the allocated space and bandwidth, even then its not likely. So yeah, Not so likely to wise up! Greetz! Eli
I disagree. Overselling is one business model and it can work if done correctly. There's also a market for undersold higher quality hosting. It just depends on your target market.
LTEli that honestly makes me sad to read because it makes me think about how hard it is for us legitimate hosts.
Oiren I agree with ya, but the market for undersold quality hosting is small... Versus the market for oversold hosting that by far is huge... Shawn_SycoBlue, I know what you mean, Since the market for legitimate host's is fairly small, It would be hard. That's why i would figure a lot of host's oversell... Lack of people wanting to pay for non oversold hosting.
very true, overselling can be very beneficial if you plan properly. The hosting industry is very lucrative and companies like HostMonster and Host Papa recently increased space and bandwidth to 1500GB space/15000GB bandwidth. They are definitely overselling but marketing an oversold product works if you can support it. Some of the most successful hosts oversell and to the novice end-user when they see one host offering 3GB of space and one offering 300GB they go for the larger plan. Hosting is definitely a very competitive industry yet the demand is surely there!
Using Porter's 5 forces analysis, there is low barrier to entry, low barrier to exit. These two forces allow web hosting companies to come and go in abundance.
Yes overselling can work if done properly and i have tried this many a time and it didnt work... i have noe realized, why offer what you dont have? Just offer decetn plans for a decent price, im pretty sure you can make alot of money from doing that Danny LimeDesigns Hosting
That's likely to be true, but the undersold market still composes a significant share of the hosting market. I just don't want people to get the impression that you have to oversell to be successful.
Yeah but in contrast the amount of successful hosts that oversell are far greater than the amount of hosts that do not.