{"id":32618,"date":"2019-10-31T21:48:00","date_gmt":"2019-10-31T18:48:00","guid":{"rendered":"https:\/\/prohoster.info\/blog\/v-chem-sila-i-slabost-rynka-hostinga\/"},"modified":"2019-10-31T21:48:00","modified_gmt":"2019-10-31T18:48:00","slug":"v-chem-sila-i-slabost-rynka-hostinga","status":"publish","type":"post","link":"https:\/\/prohoster.info\/en\/blog\/administrirovanie\/v-chem-sila-i-slabost-rynka-hostinga","title":{"rendered":"The Strengths and Weaknesses of the Hosting Market","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"

\"The
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Users come and go, but hosting and cloud service providers remain the same. This is the main message from Indian entrepreneur and billionaire Bhavin Turakhia's presentation at the international cloud services and hosting exhibition CloudFest.\n<\/p>\n

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We were there too, engaging with providers and vendors, and some thoughts from Turakhia's presentation resonated with the general sentiments. Specifically for the Russian market, we translated his speech.<\/p>\n

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About the speaker<\/strong>. In 1997, at the age of 17, Bhavin Turakhia, along with his brother, founded the hosting company Directi. In 2014, Endurance International Group acquired Directi for $160 million. Now Turakhia is developing the messenger Flock and other lesser-known services in Russia: Radix, CodeChef, Ringo, Media.net, and Zeta. He describes himself as a startup evangelist and serial entrepreneur.<\/p><\/blockquote>\n

At CloudFest, Turakhia presented a SWOT analysis of the hosting and cloud market. He discussed the strengths and weaknesses of the industry, as well as opportunities and threats. Here we provide a transcript of his speech with some edits.\n<\/p>\n

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The full recording of the presentation can be watched on YouTube<\/a><\/noindex>, while a short summary is available in English in the CloudFest report<\/a><\/noindex>.\n<\/p>\n

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\nBhavin Turakhia, photo from CloudFest<\/i><\/p>\n

Strength: a vast audience<\/h2>\n

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Just imagine, the people present at CloudFest control 90% of the world's internet. Currently, there are over 200 million registered domain names and websites (editor's note \u2014 already 300 million), with 60 million created in just one year! Most of the owners of these websites are directly or indirectly working through the companies gathered here. This is the incredible power of all of us!\n<\/p>\n

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Opportunity: access to new businesses<\/h2>\n

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As soon as an entrepreneur has an idea, they select a domain, launch a website, purchase hosting \u2014 taking care of how their business will be represented online. They approach a provider before hiring their first employee and registering a trademark. They change the company's name based on available domains. Each of us influences the path of their business in one way or another. We literally stand at the foundation of every business idea.\n<\/p>\n

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Google, Microsoft, or Amazon didn't become giants overnight; they started with Sergey and Larry, Paul and Bill, etc. At the heart of it all lies the idea of one or two people, and we, as hosting or cloud providers, can participate in its growth from a caterpillar to a butterfly, from a small company to a corporation with 500, 5,000, or 50,000 employees. We can begin with the entrepreneur and assist them in marketing, lead generation, customer acquisition, as well as providing tools for communication and collaboration.\n<\/p>\n

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Threat: Users have changed<\/h2>\n

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Over the past decade, consumer behavior has changed dramatically: the baby boomer generation has been replaced by millennials and Generation Z. Smartphones, self-driving cars, artificial intelligence, and many other innovations have dramatically altered behavior patterns. I will discuss several key trends that are crucial for the industry. Now users:\n<\/p>\n

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Rent instead of buy<\/h3>\n

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Where it was once essential to own things, we now simply rent them. Moreover, we rent not just the asset but the ability to use it for a limited time\u2014consider Uber or Airbnb. We have shifted from an ownership model to an access model.\n<\/p>\n

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A few years ago at this conference, we discussed hosting, selling servers, racks, or space in a data center. Today, we're talking about renting computing power in the cloud. World Hosting Day (WHD) has transformed into a cloud festival\u2014CloudFest.\n<\/p>\n

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Want a convenient interface<\/h3>\n

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There was a time when users expected interfaces to only be functional: I need a button to solve my problem. Now, the demand has changed.\n<\/p>\n

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Software needs to be not only useful but also beautiful and elegant. It must have soul! <\/strong>Clunky gray rectangles are out of style. Now users expect UX and interfaces to be elegant, user-friendly, and fun.\n<\/p>\n

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Choose for themselves<\/h3>\n

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Previously, a person looking for an electrician would ask their neighbor for advice, choose a restaurant based on a friend's recommendation, and plan a vacation through a travel agency. This was before Yelp, TripAdvisor, UberEATS, and other recommendation services emerged. Now, users make decisions by conducting their own research.\n<\/p>\n

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This applies to our industry as well. There was a time when purchasing software required a conversation with someone who could say: \u201cHey, if you need a CRM, use this; and for personnel management, take this.\u201d Users no longer need consultants; they find answers through G2 Crowd, Capterra, or even Twitter.\n<\/p>\n

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This is why content marketing is evolving. Its purpose is to inform clients about the situations in which the company's product can be helpful, thereby assisting in their search.\n<\/p>\n

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They are looking for quick solutions.<\/h3>\n

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Previously, companies developed their own programs or installed vendor software and configured it to suit their needs, engaging IT professionals. However, the era of giant corporations capable of in-house development is gone. Now everything revolves around small companies or small teams within larger organizations. They can find a CRM system, task manager, communication, and collaboration tools in just a minute. They can quickly install and start using them.\n<\/p>\n

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If you look at our industry, users no longer pay thousands of dollars to web designers for website development. They can create and set up a website themselves, as well as do many other things. This trend continues to evolve and impact us.\n<\/p>\n

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Weakness: providers do not change.<\/h2>\n

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Not only have users changed, but so has the competition.\n<\/p>\n

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Two decades ago, when I was part of this industry and launching a hosting company, we all sold the same product (shared hosting, VPS, or dedicated servers) in the same way (three or four pricing plans with X MB of disk space, X MB of RAM, X email accounts). This is still happening today. For 20 years, we have all been selling the same thing!<\/strong>\n<\/p>\n

\n\"The
\nBhavin Turakhia, photo from CloudFest<\/i><\/p>\n

There were no innovations or creativity in our offerings. We only competed on price and discounts for add-on services (like domains), and providers varied by support language and the physical location of servers.\n<\/p>\n

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But everything has dramatically changed. Just three years ago, 1% of websites in the U.S. were created using Wix (this is just one of the companies that I believe builds a great product). By 2018, that number rose to 6%. A sixfold increase in just one market!\n<\/p>\n

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This is yet another confirmation that users now prefer ready-made solutions, and the interface is gaining exceptional importance. \"My cPanel against yours, or my hosting package versus yours\" \u2014 this is no longer how it works. The battle for customers is now at the level of user experience.<\/strong> The one who provides the best interface, the best service, and the best features wins.\n<\/p>\n

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Remember<\/h2>\n

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The market holds incredible power: access to a vast audience and the start of every new business. Providers are trusted. But users and competition have changed, while we continue to sell the same products. We are truly indistinguishable! For me, this is a problem that needs to be solved to monetize the opportunities available.\n<\/p>\n

A moment of motivation<\/b><\/p>\n

After the talk, Turakhia gave a brief interview to Christian Dawson from i2Coalition, where he shared a few tips for entrepreneurs. They may not be very original, but omitting them here would be unfair.\n<\/p>\n

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