Yesterday the folks @ cPanel lobbed something of a grenade into the middle of the web hosting industry with a blog post entitled Announcing Account Based Pricing.
Long story short, they are increasing the cost of cPanel for pretty much every situation under the sun effective September 1st. The old pricing model was a flat monthly fee per licensed hosting server, while the new pricing is directly tied to the number of web hosting accounts on the server.
Now, this announcement has sparked a number of reactions, including anger, confusion, and fear from around our industry. We’ve seen reports of providers who believe they will see massive increases in their cPanel costs going forward, with some expressing concern of just how they are going to make the numbers work. These conversations have lead to discussions of providers moving to other platforms, cutting ancillary features out of their offerings to lower costs, or simply closing up shop as they will no longer be able to financially stay above water given the new pricing model.
Some of those reactions and discussions have filtered out from the industry watering holes and into the webmaster forums and chat rooms, to the point we have had more than a couple clients reach out in the last 24 hours asking for information on the topic from our perspective.
With that in mind, even though we don’t yet have 100% of the picture (the pricing being bandied around so far is ‘retail’, we’re not yet sure exactly where our final pricing will land), I wanted to take a moment to discuss both the big picture, as well as what it means for us here at Pure Energy.
In the big picture, things could get dicey for some of the lower cost hosting providers over the next couple months. The lower end market is run on razor thin margins, and, well, I’ll be blunt, it’s hard to stay afloat selling $5/year hosting if your control panel alone is costing you $4/year per account.
For our own environment and business model, we’ll see around a 3x increase in our monthly cPanel license costs, at the retail pricing we’ve seen so far. While not ideal for us, especially coming so closely on the heels of the cost increase we absorbed just a few months ago with the addition of CloudLinux to our servers, at this time I believe we can make the numbers work for our existing Shared Linux Web Hosting plans without a price increase, and without any other substantial changes to our service, plans, or features.
We won’t have 100% of the picture until we get firm pricing from our provider, but to be honest, the bigger concern for us is the uncertainty this injects into the idea of cPanel as a stable platform for our future:
- Our biggest, as of yet unannounced, project for 2019 was a ‘scratch our own itch’ service that we were hoping to integrate into cPanel pretty tightly and offer to our users as a value added feature of hosting with us, as well as to market the service to other hosting providers as a way to scratch their itch as well. This is on hold (the integration, not the service!) while we see how the cPanel landscape shakes out.
- A smaller project we had been looking at involved clients who find themselves needing much larger resource allocations than any of our current plans offer. The idea here was larger servers, larger plans, fewer clients per server. We have to re-run the numbers there to see if cPanel still makes sense once we have the finalized pricing.
- cPanel’s immense popularity has long made it the de-facto ‘go to’ for any provider/service/platform that had a product of interest to the hosting industry. The fallout from this price increase, if it serves to fracture the landscape of providers, could very well jeopardize the dominance that cPanel currently enjoys in the market. If that happens, what happens to the 3rd party interest/support for cPanel?
Some of these are obviously questions that wont be answered for some time, for right now however, things, for us, are status quo. We’ll keep doing the best we can for our clients, keep our eyes on the industry landscape, and keep moving forward.