If you’ve used shared web hosting for your website, most likely you’ve been using cPanel. This is a popular website management platform which allows web hosts to provide users with their own massive amount of features on one server.
Recently, cPanel has announced new price increases. Some hosts like GoDaddy, HostGator, Blue Host, etc., have stuffed tens of thousands of user accounts on their servers at a low cost because of the close competition between these hosts. Since the competition for web hosting is already highly competitive, the margins are thin. These price increases are going to reduce these companies’ revenue, and of course are going to pass along those costs to the end-user.
I’ve enjoyed a significant amount of value on my a2 Hosting account for years. Thanks to the value that cPanel provides, I’ve been able to host many different websites and enjoy email features at less than $10 per month. I’m not concerned about my costs going up any time soon as I paid for 3 years in advance, locking me in. However, I’m still impressed by the increasing amount of value I get from this service.
Calculating cPanel’s Increases at Scale
The cost increases at first might not seem like much. At scale, they aren’t that significant for larger hosts.
Their Premier license is $45 per month and allows up to 100 accounts on the server. Each additional account is $.20. The aforementioned hosts have thousands of accounts on the same server.
Let’s imagine you have 1,000 accounts on the same server:
900 accounts x $.20 = $18
That’s $63 per month. $756 a year per server.
Most hosts tens of have hundreds, thousands, or tens of thousands of servers.
Smaller Hosts and Developers Will Feel the Pain
The larger hosts I discussed earlier aren’t the ones that are going to suffer the most. It’s the smaller hosts and resellers such as website developers and designers who host their clients’ sites are also going to be hurt.
It may seem like we’re talking just a few more dollars each month, but at scale, every dollar counts. These cPanel users have thinner margins, and their real take-home income comes for churning product or designs, not the hosting.
Open Door for Competitors
This will surely open the door for competing website hosting control panels and dashboards to target the smaller agencies and resellers. Granted, many of them are far behind when it comes to features and community support.
It’s hard to say how much this will affect end-users, you know, small-time bloggers like you and I. I expect pricing to increase, but not nearly as much that places it out of reach. Most entry-level cPanel shared hosting accounts are around $3-5 per month on the low-end to $12 on the higher end, when paid a year in advance. If each new account charges the host another $.45, I expect the costs to increase about $1.
That’s not a major change for most low-cost shared web hosting bloggers are either recreationally managing their website or community, or have higher-priced plans that serve larger amounts of traffic.
New Era of Shared Web Hosting
Because of the increased costs and new avenues for shared web hosting control panels have opened, I do see there will be a new era in this hosting industry.
cPanel may make shareholders happy in the short-term, but unless they can innovate at a much faster pace than the competition can meet them at parity, I suspect cPanel’s market share will diminish.
In the meantime, if you’re in the market for shared web hosting, I recommend a2Hosting and locking down your rates now before they increase.