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Why do the majority of hosts fail? - Page 2
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Why do the majority of hosts fail?

2

Comments

  • @Microlinux said:
    Zero business sense.

    As looking at the thurst/damn vps way. Looking through things even bigger companies can fail. "Iomart" own so much. Data centres etc they failed harsh.

    same with burst.

    And about every single EIG brand known to the world.

  • MikePTMikePT Moderator, Patron Provider, Veteran
    edited April 2015

    @MSPNick said:
    And about every single EIG brand known to the world.

    TBH I was really shocked with Burst closing their doors.
    They were a really old company that grown too fast in WHT then simply disappeared.

  • PwnerPwner Member

    Because their owners have to go back to school once break ends.

  • @MrGeneral said:
    They were a really old company that grown too fast in WHT then simply disappeared.

    That's VC's for you

    Thanked by 1MikePT
  • Basic supply/demand should also be mentioned here. Not to disparage the trade that many of you have chosen, but hosting is a commodity. It is not difficult to produce, and the vast majority of demand will seek the lowest cost producer. There will always be niches for the creme de la creme, but most customers want an undifferentiated, cost effective product. Simply put, most hosts fail because there is not an overwhelming need for new hosts. Except for those that will truly shake things up, most will fail because they neglect to do basic industry analysis.

  • VirMachVirMach Member, Patron Provider

    @iwaswrongonce said:
    Basic supply/demand should also be mentioned here. Not to disparage the trade that many of you have chosen, but hosting is a commodity. It is not difficult to produce, and the vast majority of demand will seek the lowest cost producer. There will always be niches for the creme de la creme, but most customers want an undifferentiated, cost effective product. Simply put, most hosts fail because there is not an overwhelming need for new hosts. Except for those that will truly shake things up, most will fail because they neglect to do basic industry analysis.

    This is pretty much on point. Besides what everyone else said, it's important to understand supply and demand. If the industry is already so large and companies are controlling it with good offers and people are happy with their service, there's no reason for them to switch over to a new host unless that host has something better to offer.

  • Well it all depends but from experience it's the competition, the hosting industry is so hard to get customers in unless you either go the LowEnd way or have a lot of capital to market yourself. My old brand closed because of MySQL issues which happened every week due to innoDB and I believed innoDB was supposed to be stabler than MyISAM, and customers came first, why should they suffer.

    If I could turn back time I wouldn't even have started Webhosting because from 2011 the industry was full of kids, cheap unlimited hosts or EIG so haha.

  • ATHKATHK Member

    Mooses, thats why they fail.

    Thanked by 2perennate TheKiller
  • gestiondbigestiondbi Member, Patron Provider

    @ATHK said:
    Mooses, thats why they fail.

    Nope! MooseVZ succeed! :)

  • HostNunHostNun Member
    edited April 2015

    I would say staying power and lack-thereof plays an important role. Not only is hosting as saturated as ever, but it isn't a new market anymore. People are more prone to view your new host in terms of longevity, but you haven't accumulated any of that yet. I remember it being a lot easier to find new clients 10 years ago and I think the biggest reason is that there wasn't as many established hosts around, simply because there couldn't have been. Hosting was still super saturated back then, but people were more experimental in their choices because they didn't have as many time tested, established safety nets to fall into. Now that era is gone and lots of hosts have proven themselves, so people can be more conservative in their choices.

    The market is past 'the honeymoon phase' and people have settled in with their cranky spouses. If not, they'll at least want confirmation that you can weather the storm, which is something you can't convince them of in marketing buzz alone, and especially not through that hardware / knowledge / whatever that was handed to you on a silver platter when you were born yesterday.

    Even if you study this thread closely and manage to avoid all of the pitfalls, people will still have almost no reason to try your service when an established host offering the same product posts an ad next to yours.

    Or, I agree with @iwaswrongonce

    ...but most customers want an undifferentiated, cost effective product. Simply put, most hosts fail because there is not an overwhelming need for new hosts.

    Thanked by 1Maounique
  • Why do a majority of hosts fail?

    Because they pander to people that often times behind their backs they call "idiots". Or maybe, when they're given a proposal to improve customer service (xen-based multi-seat environment with space left over to allow live migration in event of required maintenance and ease of backups) to money grabs (slabbing, the whole negative connotation). Or maybe they're like "Oooh, we should expand, but we shouldn't bother telling the guy responsible for attempting to improve customer experience until after we buy subpar hardware with unforseen issues".

    Many hosts see the web hosting industry as a game, easy to play, not much loss if you lose. In reality, you need to be able to make cold, calculated, well informed decisions to provide optimal customer experience as well as a meaningful profit. Most people miss the customer experience spiele, and suffer the consequences as a result.

    Thanked by 1Maounique
  • samblingsambling Member
    edited April 2015

    To "not fail" I think you need:

    • To be ethical. Seriously. Be honest with your clients. Treat them fairly. Remember that you have promised a service and priced it accordingly. You hosting must be "fit-for purpose" which means ridiculous pricing is out of the question.
    • An understanding of what clients actually want. Good service, communication etc. Create a survey and ask them. See where you can improve your service.
    • Some business sense. Basic math is involved here.
    • Grow at a pace that you can keep up with.
    • To understand that the hosting business is a lot like the airline industry.
    Thanked by 1danitfk
  • @sambling said:

    • To understand that the hosting business is a lot like the airline industry.

    Wait, you mean you can't get depressed and blow everyone on a mountain? :|

  • @MarkTurner said:
    Reselling other people's servers or renting rackspace often from other resellers is a recipe for disaster. These providers often find that someone in the chain screwed up and find themselves offline. Others find that they suddenly get a price hike and their almost profitable deals are completely unprofitable.

    @Bruce said:
    so, don't buy from delimiter, or infact anyone offering here or elsewhere, and expect to profit?

    If you're going to con someone into becoming a reseller, I think you should start by saying, "by the way, reselling is a recipe for disaster". It is okay to make a sizable income from selling to resellers and creating a market for it, as long as you're sure to tell them that they're being setup to fail. :)

  • MaouniqueMaounique Host Rep, Veteran

    HostNun said: "by the way, reselling is a recipe for disaster"

    Judging from the adverts here, servermania makes their recipes for disaster public. even as a white-paper.

    Thanked by 1Infinity
  • @Hostnun - there is a difference between being a reseller - so buy a box from X company, mark it up and then sell it out for X% higher; or taking a box and using it to sell a valued added service - VPS, shared hosting, etc.

    The comment about back-to-backing servers. Thousands do it and make a few % each month on these systems. But ultimately it ends up in tears for the endusers. One of the most famous cases was a guy who lived in Barcelona who was reselling OVH servers about 3-4 years ago, he had hundreds (at least 300) servers from OVH, he was making about €20/month on each system and offering nothing more than a resold OVH box.

    After many (ab)users had caused problems at OVH, OVH sent him a 30 day notice of termination and cancelled ALL the servers. In that instance he kept accepting money for renewals and orders right up to the last day. Then did a runner.

    The customers ended up with their servers gone and no recourse against him or OVH.

    Thanked by 1deadbeef
  • @Bruce said:
    these "kids" also spoil the market by bringing down the price people are prepared to pay.

    I don't think so. By now, parroting that line is more of a banal scapegoating tactic than anything imo. 'High end' providers stay in business by happily setting/competing at the same low prices and, in doing so, wiping out a lot of the entry level competition before it can get off the ground. If a host is successful at providing an expensive commodity elsewhere, it's relatively easy to expand into a lower end market and dominate it. The host will have lots of resources to spare, so why not? I would argue that such hosts are more responsible for 'bringing down the price people are prepared to pay' in that they sell low as a strategy rather than a constraint.

    @MarkTurner said:
    That is 100% right. Like you we channel millions, in the literal sense of plural million, into building out our facilities. Decent routers, switches, aggregation switches, storage, building management systems, fire suppression, air conditioning, power management and so on cost millions to do right; and that is before you can power up your first server.

    >

    [...] The old expression 'Pay peanuts, get monkeys' applies.

    Forsooth, after you're done building and securing the ol' multi-million dollar hosting megacorp, if you have any business sense at all, the next step is to move into the LEB market and start selling for peanuts. 'Pay monkeys and sell for elephants'.

  • HostNun said: Forsooth, after you're done building and securing the ol' multi-million dollar hosting megacorp, if you have any business sense at all, the next step is to move into the LEB market and start selling for peanuts. 'Pay monkeys and sell for elephants'.

    Actually just a better solution to off-lease equipment. We make our money during the first 3 years by using the equipment to offer premium services at premium rates. When the equipment isn't the latest and greatest anymore then we can either return it at the end of the lease of pick it up for pennies on the dollar then dump the kit onto subsidiaries like Delimiter who can make a profit renting it out at dirt cheap prices. We don't need to make money off the equipment because its been paid for, we just need to cover the infrastructure cost and Delimiter needs to cover its administrative/support costs, the rest is bunces.

  • HostNunHostNun Member
    edited April 2015

    edit: nm, dead horse

  • They do the same stuff as everybody else, with nothing different, and customer laughs as providers slug each other out for unsustainable services at an insane price. Why would I spend $20-30 on a "better" VPS you are trying to sell when I'll be on the same node as $5-10, $15-20/year customers doing who knows what.

    Thanked by 1Lee
    • upsetting the wrong cloud computing HA redundant group-think cluster
    • unsettling dull conspiracies of silence
    • deficient sycophantism &/or not enough brown nosing
    • being outed for certain exploitative data-mining practices
    • being 'too big to fail' because of monopolist conditions, then failing anyway
    • ddos attacks
    • capital flight
  • Fake sense of business. Most of them thinks the price is everything. Lower the price = more customers.

    • tendencies toward neocolonialist hiring practices, infrastructure and business relations
    • collaborating with &/or being co-opted by reprehensible spy organizations
    Thanked by 1MSPNick
  • HostNun said: collaborating with &/or being co-opted by reprehensible spy organizations

    Thats like all the Tier 1 providers then!

    • religious duties getting in the way of being a provider
  • @MarkTurner ruh roh

  • DrewDrew Member

    Very nice explanation.

    I suspect often the customer doesn't know how to differentiate a failing company form a good one. could add, what goes into being good hosting infrastructure, or what to look for, maybe even - how to tell from the outside...

    @MarkTurner said:
    We've bought many failing/failed hosts over the years. The most common issues are lack of funding, lack of infrastructure (renting rackspace, renting servers ie reseller), lack of technical expertise and too high expectations.
    ....

    • the 'oedipus effect' in a historicist context
    • the sublation of labour into automation
    • economic sanctions and interdiction
    • ouija boards and séances
    • hauntological phenomena
    • holographic resurrection (e.g. tupac)
    • the cybernetic runaway of capital
    • synaptic responses encrusted in fiber
    • bloated panopticism as saturn devouring his son
    • embedded ethnography in lieu of consent
    • filmic encroachment in poor neighbourhoods
    • the mysterious intervention of conscience
    • ultra-voyeurism's last hurrah
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