The End of The Web Hosting Industry

Just when the Web hosting industry seemed more stable and entrenched than ever, announcements last week by Google, Microsoft and Amazon gave an official stamp of approval to the technological shift that is about to send it all swirling down the drain, and the specialist WordPress hosts may be the first disappear.

Web hosting has always been the bastard child of the I.T. industry. In the early days, any idiot sitting in his bedroom with a computer and a dial-up Internet connection could copy and paste together a professional-looking website featuring photos of tall server racks, arranged in reassuring rows, in a mysteriously white room, possibly a nuclear bunker.

Even if he was the smallest link in the long chain of guys slicing, dicing and reselling server space, stretching all the way up to the guy who had actually rented the server from the datacenter, the art of being a Web host was to present yourself to the world as if you were IBM.

As soon as you got your tiny slice of space, you could divide that sucker up and sell the fragments on to as many customers as possible. That was always the key point: selling. Regardless of their actual capacity, every Web host would offer miraculous $10 plans which included unlimited resources and, if more customers turned up than expected, you simply crammed them all into the same space. If anyone complained you would kick them out: even vaguely knowledgeable customers were simply not worth the trouble.

Did it matter if you knew nothing about online security or customer service? It did not. All that mattered was that your website contained the magical phrases – such as “99.99999% uptime” – which would give customers the strong impression that you did. In reality, nobody knew anything and the standard support response when things did go wrong was to stop replying to their emails and wonder how long it would take them to cancel their subscription.

What if customers discovered you were a sham, a fraud?

What if … what if people got angry with you?

Well … so what!

Those bozos might not like you, but the imaginary people giving the fake testimonials on your website LOVED you and, with the Web booming, more customers would keep flowing in. Talk to anyone who ran a website in the first decade or so of the Web and you will hear the same nightmare tales of wandering from one lousy host to the next.

Things are somewhat better today, if only because the software most customers use (including WordPress) has matured, the software used to manage Web hosting is idiot-proof and the cost of the servers themselves has plummeted to insanely low levels. It is still, however, a filthy, grimy industry, where marketing remains the overriding concern and profits are built upon the fundamental ignorance of customers. It is almost impossible for the average consumer to research good providers without becoming entangled in supposedly unbiased articles pushing whichever host pays the highest affiliate fee. Some companies pay bloggers hundreds of dollars for a single referral, so, it is hardly surprising that there are so many enthusiastic articles about the same small handful of hosts.

As the industry has consolidated around big players and mainstream Web hosting has become commoditized, we have seen the emergence of specialized WordPress hosting as a significant value-add. These companies have been able to ring-fence their pricing and, by using non-standard resource metrics such as page-views per month rather than bandwidth, prevent customers from realising how much of a premium they are actually paying.

This works well because the host benefits from the customer’s warm feeling that a team of experts are watching over it 24/7, warding off hackers, drug dealers and terrorists. With the lingering perception that this stuff must be difficult, and the customer’s delight with all that WordPress can do these days, the specialist WordPress hosts get a lot more credit than they deserve.

The problem is that modern technologies are rapidly rendering their role unnecessary. Anyone can now go to Linode or Digital Ocean and fire up their own VPS (Virtual Private Server) within half a minute, for a fraction of the approximately $30 cost of the most basic, one-WordPress-installation package from a specialist WordPress host. The VPS user can then use Docker or a similar technology to instantly install all they need for any number of secure, optimized installations of WordPress, all running with more memory, storage and bandwidth. The dirty secret of the specialist WordPress hosting industry: this is exactly what most of them are doing themselves.

Of course, using a VPS and playing around with installation images requires a willingness to follow a few tutorials, which is precisely what most customers are paying to avoid. That, combined with simple inertia, will keep the specialist WordPress hosts profitable for a few years to come, but the writing is on the wall.

The VPS providers are already evolving rapidly, improving their interfaces and bringing us ever closer to the day when running a server will be as intuitive as using WordPress. Meanwhile, a second layer of service provider is emerging, providing a simple dashboard that you can use instead of the native Digital Ocean or Amazon AWS or Google Compute Engine dashboards, and which also provide secure, optimized installations of WordPress at the push of a button, and without having to read any damn tutorials.

What you should really watch, however, is how the giants such as Amazon, Google and Microsoft build out their infrastructure. They are ALL brutally aware that the difference between success and failure will lie in the interface they provide, and the extent to which they enable ordinary people, not just techies, to harness that power.

That means a frantic race to provide an increasingly rich “out-the-box” experience, with server applications being the key battleground. Just last Friday, Google announced Google Cloud Launcher, enabling push-button deployment of over 120 top Open Source applications, including WordPress, to the Google Cloud Platform. Just two days before that, Microsoft launched the Azure App Service, which does essentially the same thing from a slightly different angle. Meanwhile, throughout the week, Amazon announced the latest pushes in the remorseless advance of their AWS cloud platform, which has long integrated Bitnami’s version of WordPress.

As the finer details of deployment, optimization, backing up, restoration and monitoring are all improved, and as the stability and resilience of the WordPress experience provided on virtual servers that cost pennies a day improves, how will the specialist WordPress hosts manage to hold onto their customers?

This disruption will hit specialist WordPress hosting first, but will continue on to wipe out the entire Web hosting industry as we know it today. Within five years, today’s mainstream Web hosting customers will be more comfortable with rich, well-designed interfaces that allow them to do more themselves, rather than rely on the supposed “expert support” in the traditional hosting companies, and this will collapse the industry down to a handful of providers with excellent software teams and massive infrastructure. I would not be surprised to see, before the end of this decade, SquareSpace or, even, Automattic acquired by one of the cloud giants as they seek to bolster their position.

Looking slightly further ahead, within a decade from now we are likely to see cutting-edge hosting, with deeply integrated applications, provided as part of Amazon Prime or Google accounts. The cost of all website hosting will be free or insignificant, and all hosting will be of more of less the same speed and reliability. The future will look back at today’s industry, and the time we spend dealing with hosting issues and optimization, as charmingly antiquated.

Looking ahead two decades, we will all be replaced by robots that look like Matt Mullenweg and Sergey Brin, while drones modelled after the laughing head of Jeff Bezos hover menacingly overhead.

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