Shocked that your hosting provider just increased your prices? Wondering how you will pass on those prices to your clients or manage this increase within your planned budget? Thinking to yourself … why would a provider change the game on you like this? We will now explore the top three reasons why you may be seeing price increases from your host.
Generally, price changes happen with a provider when their supplier is charging them more, when their business model isn’t profitable or when they are changing strategy and their customer focus has shifted.
Their Supplier is Charging Them More
We saw this happen recently on our Premium Business Email product. We received a “price increase” from our underlying provider, and in turn, chose to keep the product for our customers and began to charge for it as competitively as was possible.
In Hosting, however, we have never had a price increase at Liquid Web. We own our core data centers, which allows us to control our costs so we don’t need to pass them on to customers as a price increase. We maintain our servers and we employ the teams that service them.
Other hosting providers lease servers from larger hosting providers and resell hosting services. And when a reseller consumes other people’s infrastructure, they are subject to the price increases of that supplier. While Resellers can run a solid business, they aren’t in control of the infrastructure your stuff is riding on. When their supplier raises prices, they can either absorb those losses or pass them on to their customers. It’s unpredictable and when it does happen … a price increase to them generally means a price increase to you. It shatters your trust and it disrupts your business model.
If your hosting provider doesn’t own their own infrastructure, it also means they aren’t in control of your server. When you have a problem, they are acting as a middleman between you and the company who is leasing them your server. You can have peace of mind that Liquid Web is on-site with your servers at our core data centers. If problems happen, we’ll fix it fast because we have Level 3 technicians on-site, 24x7x365. We don’t point fingers and we don’t hand off your problem.
If your hosting provider doesn’t own their own infrastructure, they also don’t have a lot of extra resources on hand to support your expanding site, store or application. If they don’t own the infrastructure and have an underlying hosting provider they work with, they aren’t going to buy beyond the capacity they need. It costs too much and they just can’t afford to have excess resources. As a result, when your site, store or application starts to grow, they don’t have the capacity to immediately deploy extra resources to you. At Liquid Web, because we own our own data centers and we have the capacity, we’re ready to help you grow as soon as you need it. We don’t need to order it from another supplier.
Their Business Model Isn’t Allowing Them to Be Profitable
Often, a provider will need to adjust their “go to market” strategy because what they are doing is simply not profitable … or profitable enough. Market pricing is both an art and a science across multiple business factors. You need to understand the competitive landscape, know your costs to acquire and support a customer and recognize the margins you need to re-invest in infrastructure, innovation in product development and hiring, training and retention of the employees who serve your customers. It’s why a business needs to commit to a target customer, understand the products, services, and support that their target customer values and then price accordingly to maintain the profitability of that hosting experience.
At Liquid Web, while we offer unmanaged servers, we’re known for our Managed Hosting and Managed Application offerings. Thus, our pricing includes a “fully managed” hosting experience. More than just hosting servers, we’re taking on the server administration for our target market of Web Professionals whose business or clients’ businesses depend on the web. That includes hardware management, network management, operating system and pre-installed software support, proactive security patches and updates, and proactive service monitoring and restoration. And we back that up with nearly 600 employees that we encourage to be “The Most Helpful Humans In Hosting™”, including some of the industry’s most highly trained Windows, Cisco and Red Hat Linux Certified technicians.
We’ve purpose-built Liquid Web to serve Mission-Critical websites, stores and applications and we’ve priced our products to include the management services that keep them fast, up-to-date and secure with Support expertise that gets our customers help fast and anyway they want – by chat, phone or ticket … 24x7x365.
Their Customer Focus Has Shifted
Another reason that companies will make price changes in the market is to support a shift in their strategy. They may be moving to a larger size customer or shifting their products to move into a different space in the market. Acquisitions over the last few years have combined players that used to provide hosting services to SMBs and refocused their strategies on larger, more complex deployments and consultative services. And this has often come with increasing price tags.
In support of our strategic focus, Liquid Web made a similar strategy decision two years ago when we discontinued offering Shared Hosting as a product to new customers. This business decision was made in order to narrow our focus to products and services designed for those sites and store owners with more complex requirements.
For over 20 years, Liquid Web has been focused on web and cloud professionals in the SMB space.
We think that if a website, store or application fuels the revenue generation of a business, the choice of a hosting provider should be a strategic one.
- Understand whether the hosting provider owns their own infrastructure as a key decision criterion if you are looking for reliable, highly available, secure hosting with pricing you can trust.
- Pick a provider that focuses on you as a customer. That will help you count on them for the products, programs and support you need at pricing that is competitive in the market segment in which you compete.
- Pick a provider that can grow with you. When evaluating hosts, it’s a good idea to factor in their product or solution portfolio into your decision. Some providers specialize in only one type of technology, like VPS, for instance. To futureproof your project, choose a provider who has competencies in a broad range of hosting technologies and solutions. As you host or grow additional projects, you’ll gain efficiencies by hosting everything with a single company.
When your business depends on the web, your business model likely depends on stable pricing from your hosting provider. Do your research. Where you host matters.
Carrie Wheeler is the EVP and General Manager for Liquid Web and Nexcess. Carrie’s background has given her a unique perspective on how to combine excellent products and services. In her 25 years of experience in technology, telecommunications, hosting, and cloud services (at MCI, AT&T, and Cbeyond to name a few) she has served many roles in both Information Technology and Customer Operations.
Keep up to date with the latest Hosting news.