Most of the affiliate programs - ones meant to be for the publishers had one main goal in the past - driving more sales and branding the name of the respective company. Of course this was strongly related with the word of the mouth that spreads the news that company A offers super affiliate program and it pays!!!

We’ve seen that many companies offering scam offers and non realistic commissions to the affiliates - this is over now but it has been part of the Affiliate Marketing era.

We see and some very big names that are specialized in affiliate programs - those are probably the only properly working signs of affiliate marketing around. These pay off to the affiliates, but the commissions they receive from the companies are huge - and this is what made the first hosting affiliate war some years ago.

Then, we started to talk about how saturated the web market is as whole - and everyone started to think about the customer. Don’t get me wrong - not the customer and his real needs but the customer in numbers.

How to get more and more customers, it really did not matter the price - then we came up with all those loss leading strategies and shiny discounts, free domains for life etc! And there you go - Overselling came to make it “even better” to find a stable niche if you want to offer good and reliable hosting services.

All this was totally connected with the development of the online affiliate marketing - and the hosting affiliate programs are ones of the most used and preferred by the ‘make money online’ people.

What an affiliate program gives to you as possible customer of a hosting company? It actually does not give anything special - it can only mislead you and second, you are making money for someone else. But all this is almost gone - the web hosts do not count on the affiliation anymore - its just part of their services and the most important job that the affiliate programs do now is just for branding. The internet users now know what lies under the URL they click on - it is enough to read the name of the host that’s been marketed and you can go directly to the web site and order what want.

The next thing that makes the affiliate programs do look not that popular now is the fact that reseller hosting has been in its peek for over 2 years and only this year we started to see that people are looking not only for the cheapest available offer but for reliability and quality.

This has been foreseen and by the resellers - they started to expand and are moving to VPS services or even Dedicated servers to expand their business and in the same time - to provide more quality to their end clients. Some of them are starting to move in the clouds - which is even better and proves that the internet entrepreneurs are quite ingenious when it comes to development of the technology.

One other point in the affiliate marketing strategies is to offer even more to your affiliated clients - different bonuses and incentives for bringing more customers to the business. What I am talking about is the company I am related closely with - Host Color. The Affiliate Program is quite simple and in the same time it is very flexible and promising - it gives the affiliate percentage of each sale made, but most important - it pays and for each unique visitor, does not matter if he buys or not.

But what I think is very unique and brings even more trust to the program is that with every step - sold product, new customer, bought hosting service, unique visitor, even review or few good words for the host’s reputation or bad but objective ones will give the so called Reward Points that can be used for exchange of a services or cash.

Still, even I am recommending the company’s services and affiliate program, I think that the good days of the affiliate marketing are almost over, at least for the hosts that what to make money out of it.

The new technological edge is coming through our door and we have to see it, at least we have to figure if we can follow the revolutionary ways to produce more, to use less, to gain more.

What I am talking about? Cloud computing, load balancing, system clustering or whatever you want to call it. The important thing here is that we have to stop talking about the traditional server systems, the way we know them and continue our vision into new direction.

Systematic improvement leads to constant and progressive increase of profit and sales - of course if the right measures are taken and the right amount of money are spent.

And I am not saying that this is valid for the web hosting industry only - no, this applies to all web processes and business initiatives. The modern web presence will require us to have quality services, market orientated prices and model that will allow us to give the consumer the best available services he can get. And this will be possible of the wrong overselling model is gone.

The cloud computing technologies enable the web hosting companies to provide more quality and adequate pricing and in the same time more flexibility in terms of offerings richness, almost zero time for reaction, security, scalability and customization processes.

Of course, the involvement when you want to have a stable system are bigger than just renting few machines and make them overcrowded as Beijing. You need to have the right business plan and the necessary investments to reach the level of the new hosting models.

What can go wrong?

- the prices of such technologies will push forward only the bigger companies and will ‘eat’ the small ones (which may be a good thing after all)
- the overselling model may be fully integrated into the ‘clouds’.
- the new model may increase the prices and change the customers reaction and thinking
- this model may make the Virtual Private Server hosting disappear or just be invaluable

Why cannot be wrong?

- the service quality will be outstanding compared to what we know now.
- the reliability and the risk are not that high and its not even presumable in some cases
- will change the meaning of ‘You get what you pay for’ in a positive way
- will decrease the needs of constant technical support
- you cannot use loss-leading strategies to sell the product

The reversing parts of this post’ title means the different ways of comprehending the cloud computing and the reflection over the web hosting industry - it can be both influential and discouraging. The good thing is that with those new technologies, we may bring and new models of customer behaviour and expectations as well as morality of the industry players - in the end, its all business.

There is a real chance if you are employed by mid-sized software or web service provider to start looking for a new job. The companies are once again looking east to outsource their call centers and customer support. Some even start of deploying the service totally from countries where the costs are a lot more less than they are paying for maintaining the business.

Is there a really big difference?

When the companies started originally to outsource their call and support staff in the mid 90′, it was not any big issue, as people did not have any notion what can this mean to them. For the public this is more a pure investment, rather than anything provoked by the running costs of a company.

Well, that’s the way it was. After some 2-3 years, the usual web service consumer started to differentiate the current position with the one s/he was upright. The possible incompetence of the local support and the lack of dedication against the eventual knowledge and fast support coming from the outsources agencies.

Or, the same eventual knowledge but lack of enough English language knowledge or strange accent as an obstacle for normal communication, which may be a problem for the customers and turn their backs and seek for another service provider.

The customer wants the job done, not the job personified.

I think that most of the people really don’t care if the phone rings in UK or Indonesia, as long as their problem is solved quickly and without further explanation. Furthermore, the cultural differences may bring something positive to the outsourced support - kindness, dedication to the problem, even more professional attitude and extra help you may not receive by a local support staff.

Making the outsourced support works as local.

Hard to do but, if you have strict rules and company norms, I doubt the company will fail to succeed. Of course, having the call and support services outsourced and the technical staff locally, you risk to have lots of miscommunicated issues and delays, but with a decent system of exchanging messages and prioritizing the arisen problems it may be even better way to do business.

The posed question was towards owners of the hosting business, mostly. It contained and a sub-question, what we can do to keep the customers loyal, because the crisis affects all of us.

Is it time for a change?

What kind of change? The business model the companies use or the way they treat their clients. Well, hopefully we are talking about the first. The suggestions of the forum thread were, that the hosts should start involving themselves more and more in the day-to-day problems of the company, talk to the customers, offer them different discounts, loyalty rewards etc.

All this sound fine - but lets see the picture as whole. You have a web based business and you need to push more and more to gain space in your niche. Then you need reliability in terms of quality of service you pay for. Also, you need friendly and helpful customer service to help you with your site building.

What else - yes, competitive prices of your host, that will keep you away from the rivals. All these are very good starting point for every customer, who values and knows what lies in the hosting bottom line.

The other piece of this would be the accurate attitude, the right efforts and business view of every web hosting involved person who want to profit from his business, from one side, and to provide quality of service, value added offers, not-loss-leading market strategies and overselling practices.

If one day (after the crisis is gone) the customer starts to evaluate adequately what he gets, and what he pays for and the hosting companies starts to carry for their clients, not only in times of global economical stagnation, then it will become evident if this business comes deserves the loyalty of the consumer.

Probably, one of the most important considerations would the reputation of the web host. Secondly it may be the friendliness of the host, including the host’s website design, the billing system, the software it offers and the software it uses for its automotive activities.

Current Situation

In the times, when the companies started to offer more and more technological services and put the key to importance into delivering the hosting as well designed and user friendly system - it became evident that the so called hosting control panels will be the part that will put away or attract, or at least keep the customers.

We have seen many control panels - some big companies even decided to go and develop their own automation systems for the management of the clients, which lead to market saturation in this segment too.
Of course, depending on the specific business model and orientation - the biggest part of the web host went for using ready-to-deploy hosting panels for its shared hosting needs.

The likes of Ensim, cPanel, DirectAdmin and Plesk were the ones that lead the technological ways at the beginning of this century. There were and many open source panels, that could not, and still cannot make rivalries, because of the lack of support, development processes or just the panel’s architecture itself.

Nowadays, we are becoming more and more pretentious as customers and what the industry needed to do is to offer some kind of standardization or at least some major improvements of the hosting software it offers.

What future holds?

One of the steps was to introduce the software packages (libraries) coming with each panel, that as the companies says “will ease” the client experience and will provide more opportunities and options for any site developer or owner.

The next step was the introduction of more and more functionality inside the control panel - by adding different frameworks, newest version of the software, multiple website support, multiple-user interface, reseller options, even overselling option :).

All this is fine and made the eventual peak of this part of the hosting industry - most of the hosts were using cPanel or Plesk (because of the efforts of the mother companies or just marketing) and if you are host who wants to be on the top, you need huge investments for developing and marketing your own software or just go and use the industry leaders.

From customer’s point of view, if most people use cPanel, why would bother using something else (which proved to be wrong is lots of cases)?! But still, if you don’t use Plesk or cPanel, a very big part of the potential clients will stay away from you.

As everything, this will change - in a positive way probably and I will never stop talking about something that is the most important thing in every business or area of life - Standards.

At the Parallels summit, this subject was welcomed by most of the participants and I hope it will stay alive for as long as it becomes reality. The web hosting industry needs quality, high standards, rules. Either way, it will stay the way it is - highly saturated and unstable.

We have seen hosts come and go - it will be the same with the hosting control panels. Most of them will pass away or as its the case of Parallels - they will just buy all others. Actually, they did - excluding cPanel, but who knows :)!.

I think that I will be fine with this as long as the standards are introduces and the companies are respecting this. Of course this is only one part of the picture. The other may be the fact that one or two big players will hold the whole industry and will possibly lead to monopolization and law suits in the future. But still, the main focus, apart from making more money, should be offering the customers enough, but quality resources that will provide the web hosting market with defined rules and only the price and the business model will differentiate the web hosting companies.