Interland bought for $130 million!

[James]

Have you seen the news, Interland has been bought by Micron Electronic Inc.

Extract:

"The combined Web hosting company will be named Interland, and will have six data centers, 112,000 customers, and more than 227,000 paid hosted Web sites, Micron said."

Read the full story at:

http://www.webhostdir.com/news/



[Edited by JamesCross on 03-23-2001 at 12:26 PM]

[Mr Chunder]

Wow ! That pretty big. I suppose this marks the start of whole era of host company amalgamation. They will no longer be small one man band type companies but corporates with almost household name status. I wonder if the service and reliability will improve to end users or will it create a mass of confusion within these merging companies so that the customer ends up being forgotten.

[akashik]

I think it will prove pretty bad for the end user. You see it already with a lot of the larger hosting companies. They already refer you people as 'Account No. X', or at the very least require some sort of identifier so they even feel they should offer support. It happens outside the hosting industry everyday. Try ringing your phone company and opening with "Hi, my name is *insert your name*, and I'll like to check something on my account".

It's not their fault really. There's a point at which it's impossible to juggle people by their names alone, but you're talking about hosting companies here host thousands, if not hundreds of thousands of sites, all joining together. The day of the 'million domain host' can't be far away. If something goes down and half those sites are offline for even an hour, think of the sheer hell that'll break loose - unless they have one hell of a support system in place :)

It used to be that bigger was better, and in a rare case or two maybe it still is, but when bigger gets out of hand then I think you'll find the general end user will be happy with a smaller host who remembers their name.

Greg Moore

[rajiv]

Selling a hosting company is slowly becoming a trend!!
What do you think is it right from the point view of customers...
It creates a lot of panic and confusion in customers...
What do you guys think??

Thank you,

[Mr Chunder]

I suppose it would only create panic when you are a happy customer and it is your hosting company up for sale and the buying company has a dubious record or, its' management put financial ambitions well up the priority list compared with customer service.

I don't think that it matters if large hosting company labels you as account X, so long as they respond to phone calls, emails and fix problems right away or even better, prevent the problem from happening in the first place.

I would say that the bigger problem is that there are too many bad hosting companies out there. How many people are truly happy with their host and are prepared to be loyal? Or how many chop and change seeking better service and price ? I hear that the turnover rate is very high in this industry. Is this correct? do hosting companies notice this and if so, what efforts are they making to keep their customers? I am probably wondering off the pointof this thread !

[Edited by Mr Chunder on 03-29-2001 at 01:04 PM]

[akashik]

Rajiv,

I think we'll all a few recent events of hosting companies merging or being bought out that have scared the pants of their clientele. I blame poor management myself. They are getting into another company without first spending a *lot* of time working out to seamlessly intergrate the new clients. These people signed up for a plan because it was the right price, and had the right features for what they needed. Suddenly they get an email saying they've been bought and sold, and here's your new options - take it or leave it.

In Interland's case it's hard to say what will happen to their customers. Companies that big work on a whole different plane to the rest of us *lol* As their support is probably outsourced in the first place it'll probably stay that way, or brought into line with another outsourced support company. Hardware is a fairly moot point with those guys too. Again though it will depend on what exactly they *did* buy. The customers, or the whole package - servers, buildings and all, or something in between.

The state of the whole hosting industry is still pretty healthy though. There might be some separation between the really big guys and the small guys and the middle ground gets bought, merged or whatever, but with 16000+ companies out there there's still plenty of choice for everyone :)

Greg Moore

[rajiv]

You are quiet right

[akashik]

I hear that the turnover rate is very high in this industry. Is this correct? do hosting companies notice this and if so, what efforts are they making to keep their customers? I am probably wondering off the point of this thread !


Well, maybe a bit of a wander, but it's related and maybe the central concern for most people when this happens to them :)

Turnover or 'churn rate' is high when you compare the industry as a whole to something else (like banking). It's probably due more to the ease at which people are able to change accounts than anything other single thing. The idea is for people to have as little trouble as possible signing up, and then make sure they are comforted knowing they are able to leave at any time. If you provide a good service however the latter rarely needs to be applied.

People in general are getting a little fed up with poor customer service - not just in hosting, but pretty much everywhere these days. As companies start looking to please their stock holders more and more, instead of their clients this is beginning to increase. People are treated as commodities, and not as people.

We don't notice it personally but a look through any forum will show up a lot of very dismayed people almost begging for a pointer at a good service where they can just drop their site in and get on with their lives. You can tell they're tired of having to go through that dance month after month.

As far as what efforts we take ourselves, well it's hard to describe without breaking the no advertsing rule here, but any good hosting company will say 'Support, Support, Support' Uptime is great, deals are fantastic, but at the end of the day if you need to know something you'll be much happier if your hosts support team is there giving you the right information you need. Many customers aren't overly internet savvy, so they want real answers to real questions.

Greg Moore

[James]

I've commented on this before on other forums so forgive me for the repetition :-)

I think one of the main reasons for high churn rates in our industry is the speed of technical advancement.

e.g

Customer A, chooses a hosting company based on price specifications customer support etc. They sign a 12 month contract and "happily" start paying their monthly fees.

After 11 months of their contract the customer begins to look around for a competitive quotes, looking for the best deal available.

Technology has moved on, and they're easily able to find a higher spec machine from a "new" competing hosting company for the same money as their old one.

Unfortunately their existing provider has got to deal with their now outdated hardware. They have two choices, offer a budget package on their lower spec servers, or go on another buying spree and upgrade their racks. Either way the older more established host is going to have financial pressures the newer hosts have yet to face.

Unless they're a huge business, the chances are they wont be able to profitably compete on price with the new companies entering the market.

In my opinion the survival of the more established hosts is reliant on the level of support and expertise they can provide. Ultimately as the market matures, web site owners will realise that price isn't everything. If you want to run a successful web business you should establish a long term relationship with your host.

Here Edith the lesson ;-)

[akashik]

I think that maturity you mention is already beginning to happen. In forums everywhere you're beginning to see things like "I got their 'sooper dooper turbo charged wow' account, but then had to wait a week to them to reply to a question I had". Most people never utilize half of the account they have in terms of space, so people are discovering rapidly that they should use that same money for a smaller, but slightly more expensive account for the features offered, knowing what they are really buying is good quality tech support. Naturally that's a huge generalization, as some hosts with big numbers *are* actually very good for support, while some smaller accounts still offer poor support.

Thankfully people have forums to point them in the right direction huh? :)

Greg Moore

[RotoHost]

Many people are driven to a webhost by all of the bell & whistles it offers, rather than checking out what really matters - support. All of the features in the the world will not help you when your site is down and no one is available to help.

And, yes, the various hosting forums are essential to the consumer looking for a host. It's a quick way to get a feel for a company (seeing how they handle themselves in a public forum)

Just my $.02 :)

[akashik]

Jim,

Good point. I'm sure you've seen, like I have, a few hosts who handle themselves pretty badly when they come under fire. If they're like that in public, I can only imagine what they'd be like with private email :)

Greg Moore

[Phiberop]

Micron Electronics the computer maker??? That's rather odd, I know Micron is selling off it's computer sales division. Guess they are just going where the money is, but something seems strange :)

[akashik]

Well it's not too strange I suppose. Microsoft, Dell and Compaq are all getting into the webhosting market too now. The last year or two has been a pretty big downturn in computer sales so I suppose they're all looking at ways to get a bit of cash. How effective they'll be considering the way this industry works will be interesting. Last time I rang Compaq for customer support it wasn't the happiest experience of my life *grin*

Greg Moore