Cloud, Clutch Report

2016 Cloud Hosting Survey

November 25, 2020

by Riley Panko

Marketing Communications Manager

How much do you know about your web hosting provider? Are you knowledgeable enough about web hosting to make an informed decision about the particular features best suited for your business?

The web hosting industry can make a seemingly informed IT insider pause. For a small- to medium-sized business (SMB), the decision may feel overwhelming. Clutch sought to determine behaviors and opinions regarding web hosting to help SMBs gain insight into the web hosting sphere. Furthermore, we specifically highlighted the increasingly popular field of cloud hosting.

Key Findings

  • 72% of SMBs changed web hosting providers sometime in the past 5 years.
  • The largest percentage of SMBs switched hosting providers to find a better value.
  • An overwhelming majority of SMBs experienced an issue with their hosting provider in just the last year.
  • Security of the service is the biggest consideration for SMBs when selecting a hosting provider.
  • Nearly 95% of SMBs either already use a cloud hosting service or plan to transition to one.

Recommendations

  • Closely evaluate the price of a hosting provider in relation to features and amenities, since the market is heavily competitive.
  • Web hosting is a highly technical field – it’s in an SMB’s best interest to find someone knowledgeable about the decision-making process, if they do not have the skill themselves.
  • You should probably consider cloud hosting services if you haven't already. Experts agree that it’s the way of the future.

Mass Migration in the Hosting Sphere

The hosting market is increasingly a fluid and shifting environment. Our data results found that 72 percent of SMBs changed hosting providers sometime in the past five years.

Industry experts discussed how this migration is due to more and more competition entering the field. In fact, in April 2015, 15,225 businesses offered Internet hosting services within the United States alone and that number has only grown.

“Data migration is mostly because of the commoditization of hosting. Every year there are more and more providers for hosting, creating more options. And as these competitors come into the marketplace, the offerings and pricing tables are more robust.” – Rachel Bair, Director of Hosting & Client Services at Unleashed Technologies

“It is not very surprising that many are switching due to price, to be honest.  It’s a very competitive space.  Companies are constantly seeking a better value.” – Osman Seyrek, CEO of Renovatio Cloud Solutions

Given the increased competition, it’s natural that the largest percentage of respondents who switched hosting providers did so to seek a better value elsewhere.

While competition may be driving down costs, the price of web hosting services aren’t arbitrary. A large variety of factors influence the cost of a hosting provider. According to experts, these factors include, but are not limited to:

  1. Location and quality of data center
  2. Infrastructure that the web platform is built on
  3. Level of staff employed
  4. Degree of security

Therefore, it is in an SMB’s best interest to closely evaluate the elements and amenities of a web hosting provider in relation to the price to ensure a fair deal.

The Downsides of Hosting

Unfortunately, working with a hosting provider isn’t always the smoothest of tasks. In fact, only 14% of respondents did not experience any challenges with their hosting provider in the past year.

The provider isn’t necessarily to blame in all these situations. Experts mentioned how web hosting is a highly technical field – if you don’t have knowledgeable people making decisions, then you can run into problems very easily.

“I think that hosting is much more complicated than people believe. People tend to believe that because one company can do it well, there’s no secret sauce and all hosts are the same.” – Rachel Bair, Unleashed Technologies

“Web hosting has very large selection of technical offerings… so customization and setup is not a simple process if you have no idea what you’re expecting from those services…  I’m assuming that the 14 percent [who didn’t experience an issue] are the ones who have technical capabilities to estimate their needs and make the right choices from the beginning.” – Osman Seyrek, Renovatio Cloud Solutions

Thus, to curb hosting issues, it’s best to do your research and ask for help if the technical details are out of your depth. For small businesses unable to hire outside help, a plethora of online resources exist, including entire websites - such as HostingAdvice.com - devoted to explaining the industry. 

Security Matters Less When Considering Big Players

Security weighs heavily on SMBs’ minds when selecting a hosting provider.

However, security shouldn’t always be a huge consideration, according to experts. The biggest providers in the field have the resources to provide a level of security likely higher than an average SMB needs.

“When you’re dealing with big hosting providers like GoDaddy or AWS [Amazon Web Services] – those are big companies with a lot of technical resources and security is one of their main expertise.” – Raul Ramirez, CEO of Renovatio Cloud Solutions

However, because the hosting market’s competition steadily continues to increase, smaller providers often seek to stay relevant by offering lower prices, with the consequence of subpar service.

“If people deal with different providers like Amazon, Microsoft, Rackspace, etc. – the security issue is not very important. But lower end service providers actually put a lot of responsibility for security on the client side. This creates issues, because not every company can have a CTO which will review all things related to security on a hardware and software level.” – Alexander Lipanov, COO of Softarex Technologies

If you’re seeking a secure hosting provider, the higher cost of big providers might be worth the peace of mind if you do not have the resources to implement extra security measures. If you do choose to go with a small provider, be sure to closely evaluate its features.

The Appeal of Cloud Hosting

Industry experts agreed that cloud hosting is the way of the future.

“I don’t think you can truly move forward within a company without using cloud in some way – whether that’s by buying software as a service from somebody or creating your own cloud infrastructure for your business. To stay competitive in your own vertical, cloud hosting will be the way to go.” – Rachel Bair, Unleashed Technologies

In fact, many SMBs seem to recognize this fact already, given that so many either already use the technology or are planning to transition to it.

Some of the recognized benefits of cloud hosting include:

  1. Cost

“Ensuring cost effectiveness does not mean selecting a cheaper provider, but determining if using the provider is more cost effective to the organization itself.

How much money is spent supporting our own server room with system administrators? This will be one amount. And how much we will pay for the same server facilities in some data centers? This can be cheaper in most cases.” – Alexander Lipanov, Softarex Technologies

  1. Security

“There’s more and more protective security being offered through cloud services, since that is the way the market is moving, with less and less focus on on-premise solutions.” – Rachel Bair, Unleashed Technologies

  1. Better performance

“The reliability of data centers is much better than the reliability of [a business’] own servers placed in some other room.” – Alexander Lipanov, Softarex Technologies

However, most SMBs seek a cloud hosting provider for a variety of individualized needs. In fact, when the survey asked respondents to rank their reason for choosing cloud hosting, the results all ranked similarly. 

Given this finding, it’s clear that cloud hosting’s benefits are not universally agreed upon – but its versatility accounts for much of its popularity.

About The Survey

Clutch surveyed 300 small and medium-sized businesses with 2-1,000 employees. 68 percent of the companies consisted of 200 employees or less. Over 95 percent of respondents worked at a manager level or above.

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