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The hosting industry consolidation problem

PE-owned conglomerates now control 65% of small-business hosting. Here's what that means for you.

MOMaya OkonkwoVP, ProductApr 4, 20267 min read

Over the last decade, private equity has quietly bought up most of the hosting brands you grew up with. Bluehost, HostGator, iPage, FatCow, JustHost, A Small Orange — all owned by the same parent company. Six different brands, one P&L, one playbook.

The playbook

  • Acquire the brand at 8-10x EBITDA.
  • Cut support headcount. Replace humans with chatbots.
  • Raise renewal prices 30-40%, hoping nobody migrates.
  • Bundle in upsells — backups, SSLs, security scans — that used to be free.
  • Repeat in three years with another acquisition.

It works because hosting is sticky. Migration friction is real. Most small businesses, when their renewal bill jumps, just pay it. The P&L improves. The brand decays. Eventually the customer leaves, but by the time they do, the acquisition has paid for itself.

Why it matters

The brands look independent. They aren't. When the parent company has an outage, six brands go dark together. When the parent decides to ship the support team to a new outsourcer, six brands' customers experience the same regression. The diversity is cosmetic.

What to look for

If you're shopping for a host: check the corporate registration. Look at who actually owns the brand. Ask for the renewal price in writing. If they won't put it in the contract, the rollup is already happening.

We're not the only independent host left, but the list is shorter than it used to be.

MO
Written byMaya OkonkwoVP, Product

Spent five years inside the PE-rollup hosting world. Now building the opposite.

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