A number of web hosts are expanding the services they offer their clients, realizing that staying in such a tiny niche stunts their growth. In November, Endurance International Group Holdings announced that they were buying Constant Contact Inc. for $1.1 billion. For years, Endurance has been solidly in the web hosting business, but competition is getting fierce. With thousands of web hosts in North America alone, it’s no longer reasonable for an enterprise to “only” offer hosting. Of course, most small web hosts don’t have billions sitting around for expansion and acquisitions, but there are many things you can do to offer more to your customers.
One example is offering virtual private server/VPS hosting in addition to basic shared hosting and dedicated hosting. This is something few hosts do, but it’s becoming a big demand and is much more affordable than buying a multi-million dollar company! VPS hosting offers better security and speed than basic shared plans, but for the same price. Soon enough, website owners will catch on and if you don’t offer VPS, your clients will be going elsewhere.
Bigger is Better
According to the Endurance announcement, some of Constant Contact’s fantastic features will now be available to current and future Endurance customers. This includes managing events, integrating social media, and email marketing options. Already, Endurance offers great services for web hosting software, targeting small and mid-sized sties/companies. Endurance is the company behind HostGator and FatCow (to name just a few), so it’s clear that they have deep pockets. However, the enterprise still serves as a great example for smaller hosts looking to maximize profits.
As for Constant Contact, the company has been around for over 20 years. It was founded in a Massachusetts attic, but had some tough times in 2015. During quarter three, the shares of Constant Contact dipped to dangerous levels. People were subscribing less, and there seemed to be no solution. When Endurance bought the company, the stock shares were going for $32, which is much lower than the surprising August “high” of $43.18 (even after the spring disaster).
After 20 years of battles, it’s possible those behind Constant Contact were just tired. They experienced great success, and in more than two decades made a serious name in the tech industry. In 2015, Constant Contact focused on non-profits and small businesses, featuring fun templates and an easy way to advertise in email. They still had three million subscribers at their low point, but BizLand still called them a “bust.” Endurance expects to get subscribers beyond the five million mark in a short timeframe.
Endurance plans to operate their acquisition as a brand separate from hosting, and the deal is schedules to be finalized in early 2016. For other web hosts, this is a great lesson in how expansions can offer security to your business. It’s kind of like freelancing vs. having a permanent, single job. A lot can go wrong with all your eggs in one basket. Why not spread them around?