More Hosting Stats + A gauntlet is thrown down

I’ve always been more than a little sceptical about industry statistics and the methodology employed to gauge companies. I’m also very aware that the current methods are about the only ones available to us, so I have to take the information as being at least indicative of trends and patterns.

The latest set of weekly statistics from webhosting.info are interesting, especially when you put them in the context of my own reflections on them over a year ago.
In any business sector things can change quickly, but the landscape of the Irish hosting market in the last two years has undergone dramatic changes.
Approximately 18 months ago I posted:

I now see that we are ranked 7th:

What is also interesting is a look at where the others have ended up and how the market share is broken down. To say that the market was pyramid shaped would be an understatement, with the bulk of the companies jockeying for position with between 2% and 6%.
The webhosting.info stats do not take into account ccTLD domains, so it could be argued that some companies market share is grossly misrepresented. However that theory is easily refuted if you have access to the IEDR’s numbers. Although nobody does you can get a tiered view from David Curtin’s recent presentation (Powerpoint slides) to the IIA Congress:

Although the companies are not identified by name it does not take a genius to work out who lies in which section of the list (roughly).
It’s a pity that historical data isn’t publicly available, as I’m sure it would make for interesting reading.
The reality is that the hosting market will mature, grow and consolidate over time. Another reality is that certain companies that reaped rich rewards in the early days of the hosting market in Ireland are now waning as the next wave of dynamic companies enters the breach. Although some may try to reinvent themselves through market tactics or price restructuring there is little doubt that the market they once knew has changed inexorably.
As the market matures it does so on more than one front. As the concept of hosting in the public imagination moves from being purely the realm of the techie to the commodity market, the providers must innovate to maintain market share. Failure to innovate may result in at best stagnation in the marketplace, at worst annihilation.
Against this backdrop of change the client’s familiarity with the products and services increases as do their understanding of what can or should be done in order to offer such a service.
There are, however, those who still wish to profit from distortions of the truth when taking their product into the marketplace. In some instances their distortion is rank intention, playing on a public’s naivety – if it is written it must be true – whereas in others it is more a case of the unsaid that does the damage.
Earlier today/yesterday my attention was brought to a cry for service. This was not a cry for help, but more an appeal to comprehend. It is of no consequence which provider’s service (or lack thereof) had provoked this call, but the sentiment expressed was all too real.
One of the problems with hosting is that a lot of the time it is a thankless “game”. Your clients will not thank you for your service nay they will merely demand it. That is how it should be, for we are no longer the purveyors of luxury services or services targeted purely at a technological elite. The dotcom bubble burst, but the online element is now intertwined in so many aspects of our lives that the service providers that drive it all have become the purveyors of another commodity service. You don’t talk about your electricity supplier unless there is a powercut and the same can be said of a HSP. That is, of course, unless the trust has been breached, confidence lost and services interrupted.
The difference, however, between an electricity supplier and a host could not be greater.
On the surface hosting is a very simple concept. The basics of hosting a client could be summed up in a sentence or two and the perceived barrier to entry in the market is incredibly low.
If you wanted to open a shop on any high street you would need to have serious capital or finance at your disposal. To start providing hosting to individuals and business the outlay is minimal and possibly equivalent to a night on the town.
That is the perception. That is not the reality.
The reality is that in any market where services are provided there will always be a range of levels of service on offer. The issue from both the vendor and the consumer’s point of view is differenciating one from the other. A reasonably slick website is but that. A reasonably slick website. It does not guarantee any level of service, professionalism or basic technical knowledge. The same could be said of many businesses in the tangible market, however people’s perception of the tangible (bricks and mortar) marketplace is very different. It’s not viewed in the same light.
When you transpose the perception of a maturing clientele on a market in it’s growing stages issues are bound to arise and confidence may suffer.
When I see the kind of scams that some companies are passing off as “business practices” it makes me sick to my stomach. I won’t name names to protect the foolish, but in the last ten days I have come across the following:
– a provider requesting an affidavit to remove a domain lock so that the domain owner could change provider
– the same provider demanding an 80 pound sterling release fee for a domain
– assurances from a fellow nominet member that the cost of renewal was 10 times higher than it actually is
– a major isp releasing a domain to a member of our staff who had not even identified himself as such
– another major isp releasing all passwords and a domain to one of our clients without even attempting to verify his identity
– an ICANN registrar state that they did not care what their resellers did and telling us categorically that they would not intervene even when the reseller would not release the domain to its rightful owners
Of course the “oldies and goldies” are still around. Dodgy companies still ring companies with the hope of frightening them into buying domains at inflated prices. “Unlimited” hosts still try to sell their wares. There are probably a dozen companies claiming to have the lowest priced domains in Ireland, while another 5 or 6 will say that they are the biggest or the best. You’ll always see the promises of uptime. The guarantees of reliability. The spurious “extras” that inflate the “economy” deal to become a luxury purchase.
These may seem like random reflections, but believe me when I say they are not random, they are elements of a maelstrom that is brewing below the surface that could overwhelm you if you let it. Or you could simply say “enough”.
The commodity value assigned to hosting by the bulk of its clientele leads to it being one of the more competitive markets to operate in. Where else would you find companies using below cost selling as their unique selling point time and time again. Where else would overselling have reached new levels of complexity. Tier upon tier upon tier of overselling…
(not to be confused with oversubscribing)
In this space there can be no room for mistakes. Building trust and confidence with the market is of tantamount importance. It matters not that company X is your rival if their mistakes traumatise clients to the point where they are no longer able to view any member of your industry with any degree of confidence.
In a climate of potential distrust we all lose out and the faceless corporation will ultimately emerge victorious.
Should the words of a journalist from just over one year ago now ring true? Should an indigenous Irish industry lose out to an the international behemoths?
I for one hope not, but I know the road ahead for all of us is going to take us down some very interesting paths.