Users change, but hosting and cloud service providers do not. This is the main idea of the report of the Indian entrepreneur and billionaire Bhavin Turakhia, which he delivered at the international exhibition of cloud services and hosting CloudFest.
We were there too, talked a lot with providers and vendors, and some of the thoughts from Turakhia's speech were considered consonant with the general mood. We have translated his report especially for the Russian market.
About the speaker. In 1997, at the age of 17, Bhavin Turakhia founded the hosting company Directi with his brother. In 2014, Endurance International Group bought Directi for $160 million. Now Turakhia is developing the Flock messenger and other less well-known services in Russia: Radix, CodeChef, Ringo, Media.net and Zeta. He calls himself a startup evangelist and serial entrepreneur.
At CloudFest, Turakhia presented a SWOT analysis of the hosting and cloud market. He talked about the strengths and weaknesses of the industry, opportunities and threats. Here we present a transcript of his speech with some abbreviations.
A complete recording of the performance can be , but a short extract in English .
Bhavin Turakhia, photo by CloudFest
Strength: huge audience
Just imagine, the people present at CloudFest control 90% of the world's Internet. Now more than 200 million domain names and websites have been registered (ed. note - already 300 million), 60 million of them were created in just one year! Most of the owners of these sites work directly or indirectly through the companies gathered here. This is an incredible strength for all of us!
Opportunity: access to new businesses
As soon as an entrepreneur has an idea, he chooses a domain, launches a website, buys hosting - he takes care of how his business will be presented on the Internet. He goes to the provider before hiring the first employee and registering the trademark. He changes the name of the company, focusing on free domains. Each of us influences the way of his business in one way or another. We are literally at the bottom of every business idea.
Google, Microsoft or Amazon didn't get huge overnight, they started with Sergey and Larry, Paul and Bill, etc. Everything is based on an idea of one or two people, and we, hosting or cloud providers, can participate in its growth from a chrysalis to a butterfly, from a small company to a corporation with 500, 5 and 000 people. We can start with an entrepreneur and help them with marketing, lead generation, customer acquisition, and communication and collaboration tools.
Threat: users have changed
Over the past ten years, consumer behavior has changed dramatically: the baby boom generation has been replaced by millennials and generation Z. Smartphones, self-driving cars, artificial intelligence, and much more have appeared that have dramatically changed behavior patterns. I will talk about several important trends for the industry. Now users:
Renting, not buying
If earlier it was important to own things, now we just rent them. Moreover, we are not renting an asset, but the opportunity to use it for some time, at least take Uber or Airbnb. We have moved from the ownership model to the access model.
A few years ago at this conference, we discussed hosting, selling servers, racks, or space in a data center. Today we are talking about renting computing power in the cloud. World Hosting Day (WHD) has turned into a cloud festival - CloudFest.
Want a user-friendly interface
There was a time when users expected only functionality from the interface: I needed a button with which I would solve my problem. Now the request has changed.
The software should be not only useful, but also beautiful and elegant. He must have a soul! Clumsy gray rectangles are out of fashion. Users now expect UX and interfaces to be elegant, user-friendly, and fun.
Choose yourself
Previously, when looking for an electrician, a person consulted with a neighbor, chose a restaurant on the recommendation of friends, and planned a vacation through a travel agency. All this was before the advent of Yelp, TripAdvisor, UberEATS and other recommendation services. Users now make decisions by doing their own research.
This also applies to our industry. There was a time when buying software was not complete without talking to someone who could say, “Hey, if you need a CRM, use this; and for personnel management, take this.” Users no longer need consultants, they find answers through G2 Crowd, Capterra or even Twitter.
This is why content marketing is on the rise. His task is to tell the client in what situations the company's product can be useful to him, and thus help in the search.
Looking for quick solutions
Previously, companies developed programs themselves or installed vendor software and customized it for themselves, involving IT professionals. But the time of giant corporations, in which their own development is possible, is gone. Now everything is built around small companies or small teams within large organizations. They can find a CRM system, a task manager, tools for communication and collaboration in a minute. Quickly install them and start using.
If you look at our industry, users are no longer paying thousands of dollars to web designers to develop a website. They can create and install a site themselves, as well as do much more. This trend continues to evolve and influence us.
Weakness: providers do not change
Not only users have changed, but also competition.
Two decades ago, when I was in the industry and started a hosting company, we were all selling the same product (shared hosting, VPS or dedicated servers) in the same way (three or four plans with XMB of disk space, XMB of RAM, X mail accounts). It goes on right now For 20 years we've all been selling the same thing!
Bhavin Turakhia, photo by CloudFest
There was no innovation in our proposals, there was no creativity. We competed only on price and discounts for additional services (for example, domains), and providers differed in the language of support and the physical location of the servers.
But everything has changed dramatically. Just three years ago, 1% of websites in the US were built with Wix (that's just one company that I think is building a great product). In 2018, this number already reaches 6%. Sixfold growth in just one market!
This is another confirmation that users now prefer ready-made solutions, and the interface becomes of exceptional importance. “My cPanel versus yours, or my hosting package versus yours” doesn’t work that way anymore. Now the battle for the client is at the level of user experience. The one who provides the best interface, the best service and the best features wins.
Remember
The market has incredible power: access to a huge audience and the start of every new business. Providers are trusted. But users and competition have changed, and we continue to sell the same products. We are truly no different! For me, this is a problem that needs to be solved in order to monetize the opportunities that exist.
Motivation moment
After the speech, Turakhia gave a short interview to Christian Dawson of i2Coalition's, in which he gave some advice to entrepreneurs. They are not very original, but it would be dishonest not to include them here.
- Focus on values, not money.
- There is nothing more important than a team! Turakhia still spends 30% of its time searching for employees.
- Failure is just a way to understand the fallacy of hypotheses and choose a new path for movement. Try again and again. Never give up!
Source: habr.com