Your Product is a Commodity: What Now?

Judah JohnsVice President Business

DevelopmentReseller.PlusServer (HEG)

Hard Truths•Death, Taxes… Commoditization•The cycle from product launches to maturity to consolidation to commoditization is faster than ever•In a commoditized market, owners of hosting companies need to rethink their business

Used to be•Even mass-market clients wanted “hosting”•Cloud was cool

Fact•Hosting isn’t cool: Digital Ocean was cool... Sort of•Mass-market trends•Automation is not going to be good for everyone

• Annual global IP traffic will hit 2 zettabytes (1000 exabytes) in 2016*

• Global IP traffic has increased 5x over the past 5years and will increase 3x *

• CDNs will deliver carry almost 2/3 of traffic by 2019*

• 2/3 of all IP traffic will originate from non-PC devices*

• Traffic from wireless/mobile devices will exceed wired device traffic in 2016*

• Globally, mobile data traffic will grow 3x faster than fixed IP traffic from ’15-’19**

All these things will affect consumer behaviour, especially for hosting providers who are very near to the infrastructure serving these clients.

*Cisco VNI 2015, **Akamai State of the Internet 2015

• It’s like ignoring Net Neutrality: it will affect your business

• Amazon / Microsoft / Google are working on Web 5.0

• See specialized WordPress hosts

• “It’s not a commodity!

• “It’s complicated and the clients need our help.”

• “Clients need to be able to pick up the phone. The need handholding.”

• “What about security?”

• “Performance matters, and those big guys don’t provide it.”

• Or… “Storage!” ... “Scalability!”

• “You can’t commoditize service.”

• Product Innovation

• Packaging

• New market niches, especially in unsophisticated areas

• Generate more referrals

• Offer increased service

• Find out what part of your service you can guarantee

• Partner with complementary products or service providers

• Employ your non-customer facing assets

• What tools do you use daily?

• What are you an expert in?

• What advertising hacks have you discovered?

• What other industry do you understand well?

• What other industry or market do you always look at and think, “They could totally do that better.”

• Do you have a real, active program in place?

• How does it work for your employees?

• Is it only your sales guys working to bring in new business?

• Do you have sales? Or is it all inbound?

• What incentives are in place?

• You run a hosting company: TRUE

• On a daily basis, you only do hosting: FALSE

• Do you know tech: YES

• You know how to build a product and market it: YES.

You have hidden assets and skills that you can use to

grow your business.

The majority of the Internet is run by small to medium sized hosters.

Many will not survive the next 5 years.

There is plenty of room for those that innovate to not only survive, but thrive in

doing so.“IF NOT US, WHO? IF NOT NOW, WHEN?”

-JOHN F. KENNEDY