What I Learned at HostingCon 2006

February 1, 2007 by Derek Vaughan

The web hosting industry`s annual trade show, HostingCon, was recently held in Las Vegas, Nevada. In conjunction with The Hosting News, HostSearch special correspondent, Derek Vaughan, was present and summarizes the event.

HostingCon 2006 saw over 1200 web hosting professionals converging on Las Vegas to particpate in the year`s most anticipated web hosting event. According to show organizer, George Roberts, the last few weeks generated an enormous response - with over 400 registrations piling in during the last 2 weeks of registration.

The web hosting community was not disappointed. A solid line up of first class speakers and sessions was followed by an impressive and dramatically expanded show floor featuring the hosting industry`s finest vendors.

One of the highlights of the show was the keynote panel composed of the following industry professionals:
Moderator: David Snead, Attorney, W. David Snead, P.C.
Panelist: Ian Andrusyk, President and CEO, FastServers.Net
Panelist Lou Honick, CEO, HostMySite.com
Panelist, Jeffrey Stibel, President and CEO, Web.com
Panelist, Christopher Faulkner, CEO, C I Host

The panelists covered recent new product introductions for their respective brands, examination of the true penetration rate of web hosting among small businesses and how to reach them, a discussion on how to find and train good people, and the general challenges facing the web hosting community.

Here are the top things I observed at HostingCon 2006:

HostingCon has become the must-attend annual event for the web hosting industry. Last year the show was in its infancy. This year the show really blossomed and came into its own. In discussions with other exhibitors and attendees, I heard over and over again, "There`s no other show that targets the web hosting industry".

HostingCon doubled in size from last year. Last year, one wondered if anyone would show up - fortunately they did. This year one wondered if the attendees from Chicago would still come to the show in Las Vegas. Wow did they come! The show attendance was over 1,200 - with many attendees signing up in the last few weeks before the show.

Four large-company web hosting CEOs can deliver a huge amount of valuable information in about 40 minutes. As noted above, the keynote panel on day 2 (Lessons from the Trenches) was a fascinating discussion which ran the gamut from dedicated servers to pricing and commoditization to customer acquisition, to finding and training good people. This was truly the essence of group learning in a conference setting.

Customer acquisition costs are still rising, while hosting company valuations have plateaued. Multiple web hosting professionals including Matt Heaton, President and CEO, at BlueHost and Joe Bardenheier, VP Corporate Development, Endurance International Group, Inc. confirmed that the cost of gaining new customers (whether organically or through acquisiton is continuing to rise. Unfortunately, on the buy side, Hillary Stiff, Managing Director, Cheval Capital, Inc. revealed in her discussion on mergers and acquisitions in the web hosting industry that hosting companies are currently selling for around 1X annual revenues.

Web hosting leaders are bullish on account growth over the next few years. Attendees were very bullish on the growth prospects for web hosting in the near term. Most companies are seeking creative ways to grow both their account sign ups and also revenues (ARPU) for existing customers. Few are looking for an exit strategy.

Derek Vaughan is a feature writer and web hosting expert who`s work appears courtesy of The Hosting News.

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