Is web hosting market saturated?

sid-180 · 27 May 2011 at 19:28

My boss at work is looking into setting up a web hosting company and it seems pretty much everything he touches seems to turn to gold

So is the web hosting market saturated?

He seems to think with good marketing and support he is looking in his first year at gaining 2500 - 3000 customers!

Now i am a little thrown back by his estimates as i think he may be off the mark by at least 1000 customers in his first year.

Can anyone shed some light on this if he is being silly but again he has 3 IT business's and all 3 business's do really well.

daz · 27 May 2011 at 19:42

I think the average cost per acquisition is around £80-£150...

So to gain 2000 customers, you'd be looking at spending £200k in marketing.

Immsy · 27 May 2011 at 19:42

Theres are few people who run hosting companies about in this forum who are better qualified to answer, but I think his estimates are "ambitious" to say the least.

Kemik · 27 May 2011 at 19:49

Go to webhostingtalk. It's absolutely saturated. I suppose with a lot of time, effort and money you could elbow your way in to the market.

sid-180 · 27 May 2011 at 21:21

My estimates were around 60-80 customer a month i suppose with a little marketing i.e. google, magazines leaflet drops at universtities and business marketing i suppose 120-160 customers per month.

Rroff · 27 May 2011 at 21:26

It is absolutely saturated but some can make it work, my brother gave it a punt and done fairly well from it - but others haven't been so lucky.

Beansprout · 27 May 2011 at 22:06

It's certainly a growing market but it's one with expensive start-up costs - you can setup on a low-end server with a cheaper provider, pay attention only a few hours a day and so on, but you'd build up no reputation for top quality service and, compouned by no track record, would therefore find it difficult to grow.

Of course you can throw serious cash at it and grow essentially out of nowhere like Justhost did and hope that he gets bought out by a bigger fish, but this still means becoming familiar with a highly technical/specialised industry and being able to run a 24/7/365 service. It's not a 9 - 5 business.

It's something which, if you want to do well, will take over your life unless you hire staff but if you do that, you'd have to trust them well and pay them accordingly, etc.

He may be better starting off simply as an affiliate of a hosting company and making a 25 - 50% cut for a tiny fraction of the work

JimAroo · 28 May 2011 at 14:49

Saturated, everyone seems to be doing a bit of it these days. Amount of people that can bang out a quick website in Dreamweaver that is poorly coded, has invalid markup and plain bad are even able to get people to pay them.

Most people just can't tell the difference between good and bad quality of work. That's the problem, this allows pretty much anyone to do it.

And thus, saturating the market.

hittman · 29 May 2011 at 09:42

I think the market is saturated but as your boss is already doing well with his three other businesses, he could probably make it work due to his experience, contacts and capital to throw at marketing?