Today, I have seen a presentation about acquisitions in the webhosting branch. A lot of webhosting companies want to take over smaller companies. (mostly student companies, or small starters.) I do think that it is a good thing and it is also good for the webhosting market itself. There are dozens of webhosting companies out there with small annual turnovers and bad support to the customers. And the customers mostly don’t see the difference between an expensive or a cheap company. They Usually look at the pricing and choose the cheapest one. Nothing wrong with that, but when it comes to support, most companies are closed… It is about time that the strongest survive and the weakest are taken over by the strong ones.
Although, there is one problem. The pricing of the products. Most small companies (the “student” or “attic” companies) handle with very low prices. I’ve seen a lot of gigabytes for less than 10 euro’s a year. My hosting company is not the cheapest, but certainly not the most expensive company. But if I want to buy such a small company (with low prices) I cannot heighten these prices to the level of mine’s. Customers would not agree with that. So that makes a lot of small companies unattractive to buy. And that is a pity, cause we really need some cleaning in the market!
May 8th, 2009 at 10:34 am
I can see how taking over such smaller webhosting companies pose a couple of problems. Naturally its customers will not be too fond of an price increase. However, I do think that they would be open to renogotiation – pricewise that is. Perhaps it would be possible to make those particular customers aware of the added benefits and services that come with the price increase? Sure, they pay a little bit extra. But the enjoy added benefits and a higher level of service too. Or maybe there is a possibility to ‘trim the fat’, removing a few extras or added benefits that come with the hosting service in order to make the lower price that the customers were used to a fair one in relation to the new service offered. I’m strongly opposed to monopolies, but such a scattered market is doing anyone good either.
May 8th, 2009 at 10:42 am
Maarten,
thanks for your reply. Most customers of those small companies are private customers. Those customers are mostly not willing to pay these significant extra costs. The problem with extra benefits… Most small companies do not have any benefits for their customers.
So we have to convince the customers that we have better support, uptime etc. Unfortunately most customers are still choosing for the cheapest ones…
May 8th, 2009 at 11:59 am
Too bad those customers are so shortsighted. If there is a lack of budget I can understand their decision. But one would think these customers have aspirations of growth and development. I guess they underestimate the power of having a solid pressence on the web. Well, the only I have left to say is never stop trying to convince them!