Why have the biggest hosting companies captured 99% of the market?

OpsidianOpsidian Shared Hoster
edited February 2022 in Hosting Discussion & News

The big web hosting companies like AWS, EIG, and Digital Ocean have captured most of the market share and millions of small and medium web hosting companies are satisfied with peanuts. Surveys show that small/medium companies are even losing their old customer base faster than big companies. Most of the new customers are garbed by big giants owning to their intensive marketing. Although many customers blame big companies of poor services but their voices are suppressed by advertisements. Support services and response Small companies are far better. Although they are also blamed for their old ways of customer support services.

Do you agree?

Comments

  • AurumAurum Shared Hoster
    edited February 2022

    There are a couple of reasons for this. First, the lock effect. Once you are signed up and have a website it's easier to sort any problems than move it. Often this is not true with websites but it's a perceived effect.

    The other is the number of brands these big companies own. You can move your site to dozens of well advertised hosts without leaving the same corporate entity.

    Finally the smaller companies often merge or get taken over by other similar sized companies... But the more this happens the bigger they get... Then one day boom they are big enough to get swallowed up by a corporation.

  • OpsidianOpsidian Shared Hoster
    edited February 2022

    This is not unique to web hosting, this is how every industry works. Larger companies are more efficient due to economies of scale, and more efficiency means more profit. When there are no obstacles to it (e.g. competition policy), companies in the same market will always merge or acquire other companies over time.

    The reasons are exactly the same in web hosting. Larger companies are more efficient, and can therefore spend more on marketing and sales activities to reach more customers. I wouldn't say this is necessarily a bad thing, as long as customers can freely choose for a smaller company if they so desire. The barrier of entry in web hosting is tiny, so there will always be smaller companies popping up to provide an alternative. And some of these smaller companies will eventually grow to be larger companies.

  • IvanishuIvanishu Shared Hoster
    edited February 2022

    When they have millions of customers, their base support will be severely compromised.

    I dont feel they will even care about cancellations much because most of these big brands own around 50 to 100 such hosting companies so even if the client cancels he signs up with their other purchased brandname which the client is not aware of. The main reason of this is the heavy marketing and band advertisement they do... its really difficult for end use to find good companies infront of this big fat web hosting providers which run on inverters money .

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