Rackspace, Others Gain on GoDaddy in SMB Web Hosting Market

GoDaddy’s hold on the SMB web hosting market, through cost savings, additional features and brand awareness, is weakening with the growing popularity of cloud servers.

That’s according to a new survey and analysis report from Clutch focusing on behaviors and opinions regarding web hosting. The survey included 300 U.S. SMBs with two to 1,000 employees, with 68 percent having 200 employees or fewer.

Eighty-six percent of SMBs said their web-hosting provider offers cloud-hosting options. Also, 26 percent, the largest percentage, of SMBs currently use GoDaddy as their hosting provider, followed by CloudSigma at 12 percent and Rackspace at 9 percent.

Riley Panko, a Clutch marketing analyst who focuses on cloud research, tells Channel Partners it wasn’t surprising that GoDaddy was the most used web hosting provider.

“However, we didn’t expect the popularity of cloud servers amongst SMBs to be quite so high — the fact that 86 percent of web-hosting providers offer those products, though, means that the cloud is already more influential in the web-hosting market than we previously thought,” she said.{ad}

Some 57 percent of SMBs use site backup as an additional feature from their hosting provider, while 55 percent use email hosting and 42 percent use mobile access to administration and statistics, according to Clutch. The largest percentage of SMBs (40 percent) back up their website and applications exclusively with their hosting provider.

GoDaddy is well known for being a full-service hosting provider, but the company has angled its cloud-servers marketing toward developers with small-business clients, as opposed to small-business owners, according to Clutch. As a result, the features they promote are more technical in nature, it said.

“GoDaddy clearly had challenges with cloud servers in the past, as they had a failed attempt at launching the product in 2012,” Panko said. “The re-launch of their cloud-server products is an opportunity for the company to dig further into a market heavily in flux. Ninety-five percent of SMBs use or plan to use cloud servers in the future; if GoDaddy doesn’t secure dominance through cloud-server products, they will fall behind.”

Given that GoDaddy’s revenue structure increasingly depends on hosting services – hosting brought in $160.4 million in the first quarter of 2016 – its ability to remain dominant in the SMB cloud server market could be vital, according to Clutch.

“The web hosting landscape is not like five years ago,” said Osman Seyrek, COO of Renovatio Cloud Solutions, a cloud technology and custom software development firm. “There are way more competitors right now … so all the participants are trying to provide extra services in order to get the upper hand.”