HOSTING INDUSTRY SURVEY RESULTS

Conducted by

2016

Hello,

I am Igor Seletskiy, CEO of CloudLinux. Recently, we have conducted a comprehensive hosting industry survey and I am excited to share the results with you!

This survey was broadcasted to web hosting experts across the globe, with 714 responding to it. These professionals have shared their view on issues related to VPS, security, and other services and systems. The survey also covers topics related to customer expectations, business growth, as well as challenges associated with it.

I would like to thank everyone who participated in the survey!

Igor Seletskiyi@cloudlinux.com

Respondents profile

Company size Role

714 Respondents

Respondents include…

27% of respondents do not have a VPS / Dedicated Hosting offering

16% of VPS / Dedicated Hosting respondents don’t offer shared hosting

34% of respondents offer Application hosting to their customers

27%

16%

34%

Stability of Servers, 43%

Server/Website security, 48%

More Power, 52%

Running Special Applications, 56%

Root Access, 58%

More Resources, 66%

Main reasons customer buy VPS/Dedicated Plans

Top issues hosting providers experience with VPS / Dedicated servers

Other 8%

Customer complains about server stability 15%

Difficult for you to keep servers stable 17%

Difficult for you to keep servers secure 22%

Customers need much support 45%

Low margins 51%

Too much competition 61%

" Difficult for you to keep servers secure and stable when the VPS is self-managed. "

" Lack of good software for VPS hosting. "

" Lots of manual work when preparing customized hardware configurations. "

" A lot of maintenance for us. No automatic roll-out of VPS servers, too costly to realize that. "

Some “other” reported issues are …

" To many low cost providers with horrible service "

" Abuse "

" Clients don't know how to manage servers. "

" Monitoring and managing VPS against abuse (spam, excessive resource consumption, etc.) "

" What issues?! :) "

65% of respondents said it is very or somewhat difficult to upgrade customers from shared hosting to VPS / Dedicated.

Over 70% of respondents are worried about VPS / Dedicated security. Also, over 60% reported that most customers are also worried about security.

Over 60% reported that customers worry about security. Top reported issues are:

13%

19%

25%

28%

37%

45%

48%

49%

53%

61%

67%

DNS Poisoning

Information disclosure

Privilege escalation

XSS attacks and similar

Comment SPAM

Website Defacement

Code/SQL Injections

Brute force attacks

Remote exploit

Malware infection

DoS/DDoS

Managed service is sold for an additional

fee

53%Managed service is included with

VPS for free

30%

Not offering, but planning to add 10%

Not offering, and not

planning to add 7%

Breakdown of managed service hosting offering

Hosting Insights: 2016 vs 2011

92%reported that

customers expect to have more managed

& preconfigured, easy to deploy

services than 5 years ago

67%reported that

customers expect to have more

control over the server than 5

years ago

Top 3 reasons respondents would resell a security product to customers

To offer better services

48%

To minimize support issues

To make money

“To provide better security for clients … to reduce the complains/possible abuse cases resulting in more

client satisfaction and less support issues. In the end,it is all about the client satisfaction.”

10% of respondents reported they are not interested in reselling security products

24% 16%

Joomla / Wordpress hosting

36%

Offer additional 1-3 applications

22%

Offer additional 4-10 applications

9%

Offering more than 10 applications

33%

Hosting Insights: Application Hosting

Only 34% of

respondents offer

Application hosting to

their customers.Nearly 74% of those offer it

as part of the shared platform

using Softaculous,

Installatron, etc.

Top reason hosters don’t offer Application hosting: No time to focus on it.

SolidFire 6%

Pstorage/Virtuozzo storage, 9%

Ceph 11%

NetApp 12%

Other (see comments), 25%

iSCSI 28%

NFS 58%

Other storage systems most commonly mentioned are:

SAN, AWS, ZFS, Local, Fibre Channel

Hosting Insights: Storage Systems Utilized

Business Growth & Challenges

57% of hosting companies report static or lower than expected growth in 2016

42%remain at static levels compared

to 2015

21%Over-performing

22%Hitting growth

targets15%

Underperform

Reported level of satisfaction with 2016

business growth

Business Growth & Challenges

29%To remain static

at the level of 2016

36%Over-perform 30%

Hit set targets 5%Underperform

Expected growth in 2017

Other 3%

I don't expect expansion 22%

Conquering markets in new countries 23%

Conquering new market niches 35%

Extension of a product range 38%

Attracting new types of clients 52%

Other ways include:Better marketing and product

advertising, better data centers, acquisition

Plans to achieve expansion in 2017

58%report they

intent to offer new products or services in

2017

New services will include:

• Docker / Container hosting• E-comments solutions• Larger hosting plans• SSL Certificates• Storage solution• Enterprise email solutions• Cloud Hosting• Openstack• Managed colocation• Hosted Applications• Security services• PaaS• Managed & unmanaged VPS

For a complete list, please request a

full version of the survey results by

emailing news@cloudlinux.com

Business Growth & Challenges

Other 4%

Training 16%

Lack of talent 19%

Lead conversion 22%

Resources 34%

Sales expertise 35%

Money 39%

Marketing expertise 47%For accomplishing higher growth, hosting companies lack…

Top other 3 include:

• Lack of time• Economic situation• Competition

72%report revenue from existing customers is

the biggest contributor to

business growth

Business Growth & Challenges

4%

14%

15%

22%

23%

39%

42%

64%

Other

PPC

Email to list

Sales people (telemarketing)

Content marketing

Search Engine marketing

Social Media

Referral

Best way to reach new prospects and

generate leads

Business Growth & Challenges

64% of companies report they need little

to no help from a sales person to close deals

Sell online only35%

< 25% of deals need a sales …

25-50% of deals need a sales person 17%

50%+ of deals need a sales person , 9%

Almost all transactions need sales

persons help, 10%

Business Growth & Challenges

Reported sales person’s

involvement

50%report

advertising performs the same as in

201613%

over-performs12%

hits expectations

24%Underperforms

Effectiveness of advertising for hosting companies in 2016 compared

to previous years

Business Growth & Challenges

4%

5%

7%

10%

19%

19%

22%

27%

Email

Forums

SEO

None

Google AdWords

Social Media

Other

Word of mouth/referral

Types of advertising

reported as the most effective

Word of mouth/referral is #1 in generating new leads

Business Growth & Challenges

Business Growth & Challenges

Effectiveness of advertising: another look

And finally …

If there was something hosters could change in the way they do hosting…most notable answers:

• Stop selling dedicated servers• High-availability shared hosting• Make customers pay more• Stop worrying about security• Improve marketing• No-support hosting• Have a great sales team• More defense from site hacking• Sell more add-on services• Add cloud services• Stop offering phone support• More effective advertising• Simplify offering for customers• Automation, automation, automation…• And “hire three more of you”...

“Decrease the number of emerging technologies which grow fast and that the clients don't

understand”

If interested, please request a full version of the survey

results by emailing news@cloudlinux.com.

Conducted by

Findings from this survey can be republished without approval request

but with the reference and the link to the source.