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This past week I have been going through the latest group of reviews that the independent review panel have churned out. Many are quite good. Not too leave any spoilers, but AISO did exceptionally well in the Green Hosting category. But it led me to thinking about the current situation for the web host industry.

It reminds me of the cable TV industry actually. Now you too can be the proud owner of 10,000+ channels for your viewing pleasure. But come on, how much TV do we really watch? For myself, I watch very little. I have a handful of shows I watch when I can (normally I save them up for a weekend of melting my brain) and a few non-fictional shows that I find diverting. But in all, I imagine I watch shows from about 6 channels.

I dropped cable and dish network because of this. I can see all I want to see on Hulu and various online video sites. And I know I am not alone. Even my friends who enjoy letting their brains ooze out their ears from TV meltdown also spend more time on Hulu than they do on cable TV.

How many online users use the 10,000+ features a web host has? I would imagine they too are like TV watchers, they have a few features they require and won’t use any of the others. I suppose its comforting to know that you can add ColdFusion to your site, even though you are running pure PHP, but honestly, isn’t it like having the Golden Oldie Polka channel alongside your Food Network (or substitute for favorite channel)?

I am tired of reading on supposed help sites that price is the main factor when buying web hosting or anything else. When you go to the grocery store and buy lettuce do you check the price or check to see if the stuff is rotting? When buying milk do you check the price or the expiration date? When you buy furniture what is the first then that catches your eye? How it will look in your living room, or the price tag?

Price is not the main factor. If you make price your main factor you are going to wind up disappointed. Instead let me offer a replacement to Price and that is Cost.

Surely I jest yes? Isn’t cost and price the same? Some of you already know where I am going with this and others need an explanation. Price is how much you pay from the outset. It is the sticker cost of an item. For instance, $1.99 a month for a web hosting plan, the price would be $1.99. Cost is how much you end up paying over the long haul of the product or service.

For instance, taking a jaguar (price at a cool $60,000) to a mechanic to find that the parts need to be special ordered (ka-ching!) and an authorized mechanic should install them (ka-ching!). That you have to use the premium gas (ka-ching) instead of the cheap stuff. The oil put in the car must only be synthetic (ka-ching) and since the engine is constantly purging oil, the topping off of the oil reserve is a weekly activity (ka-ching). As we add all of these together we might find that the initial $60,000 is dwarfed by the total cost of ownership of that vehicle.

This can be applied to web hosting, especially those who desire the world for free from their web host. However, this brings up a bit of a quandary. If people know you get what you pay for, if people understand that $1.99 is probably really cheap (thrift store cheap) for web hosting why do they still want to have everything for a few bucks? I have to assume it is because of two things.

1) What idiotic company would sell a product without making a profit on it? The logic then goes, if you can make profit off of 1.99 a month then why are there companies selling the same stuff for 5.99? 10.99? 19.99? Are they all greedy or something? Which leads to my other point.

2) The average person doesn’t know the true cost of the service.

As a service industry, web hosting requires staff, a lot of staff depending on quality level. Employees don’t come cheap, in fact I would think that salary would most likely be the highest cost for companies who put support ahead of other factors. The unfortunate part is that this large cost is difficult to manage. Let’s face it, customer support staff has a high burnout rate. Hopefully, they are being moved to different departments if they are talented, but that doesn’t help the customer support section. New employees must be trained as old ones leave. Companies tried to lower this large cost by going overseas. Instead this often made their customers hostile. So hosts were forced to shave costs everywhere and hope it adds to big savings.

Virtualization is one of those shaves. Being able to combine more accounts on a computer and use every last resource in the data center greatly reduces power cost, real estate, and the rest. Automation reduces work load of employees, streamlines efficiencies and plays well with others, especially virtualization.

But even if you used green energy servers, topped them off full of accounts (without overloading), automated everything, purchased discounted bandwidth, used recycled air from outside… did everything right when it comes to cost, you still couldn’t justify $1.99. In fact, I would believe it difficult to get a high level of customer support for less than $10. And that is being generous. Especially considering that even with the best video FAQs and rock solid hardware (which would also cost a lot of money), there are a lot of customers that just want to talk to a real life person. And if you want to staff it 24/7 you need several shifts of customer support techs. Not too mention writers who can update the FAQ and knowledge base, while promoting the company. What’s more, the cost to acquire a customer generally put the web host in the hole sometimes by a few hundred dollars.

Though it is treated like a commodity, I assure web hosting is not. If you want nothing, then feel free to pay nothing. But, if you require something more substantial, do not balk at paying more upfront. The question then becomes is it worth paying more upfront to ensure you don no pay a huge amount later? I think you know the answer to that.

I was once told by a very wise and eloquent man and mentor that pride gets in the way of learning and that the first thing you must do to learn is to humble yourself. Those who believe they know it all will learn nothing from others, since they all ready know it all. However, those who are humble are willing to assume that they don’t know everything and will listen to what others have to say.

One of the problems of being an expert is that we believe we know more about certain topics than others and in so doing close the doors of learning. As many know I went back to finish my degree. Not necessarily because I needed to, but because I wanted to prove what I know and that is that I could. I graduated a week ago with highest honors (yes a little self plug there) and in looking back I wasn’t always kind to my fellow classmates. By doing so I closed off many opportunities for learning.

Expert status is fun. I enjoy fielding questions, be it from email or face-to-face. I enjoy being on the ground floor of a lot of today’s innovations. But if there is one thing I learned from going back to school it would be that you can learn something from anyone, be it a new technique or just patience.

Not too long ago I was on a small shopping spree. I needed to pick up a few items for my new home having recently moved to SoCal such as Home Depot, Lowe’s, the Container Store, and various others. As I was going from one store to the next picking up odds and ends I found myself in desperate need of a bathroom.

Being too far from home, I ordinarily search for a gas station (learning all sorts of new things about me today), however none were in sight. The urgency of my need forced me to look anywhere and everywhere. I came upon a row of stores and went from one to the next. In my yellow haze, I noticed a grocery store and thought to myself perfect; they must have a bathroom.

The sounds of water misting vegetables, customers filling large water bottles, and even seeing a few employees downing cans of coke was becoming too much. At last I found the bathroom. I went for the handle. It wouldn’t open!

Now I am a patient man, and regardless of the pain I was beginning to feel I stood their, trying my best not to do any sort of dancing in place… and given the circumstances I think I did quite well. Figuring there was someone in there, obviously the door was locked, I had no reason to expect something more sinister was afoot.

Unfortunately, I was wrong. Not only was there no one in there but a second glance of the door knob struck me cold. There was a coin deposit attached to the door. For a low installment of two shiny quarters you too can pee in an area deemed socially acceptable. I checked my wallet, my pockets, my car… no change. Now I had thought of many ingenious ways of making my displeasure known. Granted most of them are illegal in 17 states and some 30 odd countries; I decided to refrain. Defeated I climbed back into my car and drove off.

I know a lot of companies are looking to save some cash. Who wouldn’t? But there are levels of service that are expected. There are some features that should not be served a la carte, but come with the solution as a whole. That grocery store is not in the business of selling convenient plumbing or water service. It is in the business of selling food and supporting items. The amount of money they gain from selling bathroom rights is minimal. The amount of money they save from not having to clean the bathroom is also minimal. In fact, I would wager that they are either at the break even point or are losing money.

I was not the only one to leave in a huff. There were a few other customers who saw the cost of doing their business and were equally frustrated. I imagine at least one (other than myself) simply left the store without purchasing anything.

In the Web hosting space, don’t offer me 24/7 support and then tell me I have to pay for additional support tickets after my first 5. Don’t tell me I have unlimited space and then say I can only have 1 database on my account.

Don’t tell me I am a welcomed and valued customer and then in the same breath charge me for nit-picky fees for items that cost you next to nothing to provide, but help to make me feel at home and comfortable.

Coincidentally, the first store where I need to go actually had a free bathroom in it….

Being a newly “created” SoCal transplant served me well today as I calmly drove down the 5 to get here…. No really the drive was very peaceful, learned a few new words as well. I am reminded of two things: 1) I love my phone 2) we have come quite a long way in the hosting industry… so why does it feel like last year?

Apps! Clouds! Acquisitions! Growing your business! If you squint at the name and place your right thumb over the date you might think it was 2010 all over again.

The cloud has arrived! Well yeah, it has been hanging out, parked on the couch drinking your beer and stealing your cable. It’s like daddy’s little girl and the redheaded stepchild all rolled into one. Convenience and Security both still seem to be at odds. And standards? Still seemingly years away. Consumers want it, but we need it to live up to its word. That’s all that needs to be said. As an aside, who, cloud providers, can guarantee my data will be stored in my country (not necessarily US) and not be spread globally? If it is global, can you guarantee me data won’t be subject to the jurisdiction of multiple nations? Think about it.

Apps! I love apps; hell I am writing this blog from my phone. Sidebar: anyone else get the impression that session speakers know a lot more than what they are saying? Seriously,  with a handful of exceptions, presenters have a personal stake in not telling you everything. I say tell me and I might just hire you. Food for thought.

Apps: simple and complex, modular, delightful wastes of time or powerful tools to augment everything that is fine and good in the world. We have the delivery. We have the tools. We have the technology. But we lack creativity. Don’t just build an app cause someone told it will help your stickiness. Instead find out what people do the most on your site and make that mobile. Now go and be fruitful. I will expect my royalty check in the mail and its d-u-n-l-A-p not o-p.

Acquisitions, going to listen on Tom Millitzer’s presentation at 1. So howabout we take a break here and come back fresh?

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