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GoDaddy, (((Media Temple))), And The Horrible World Of Web Hosting

Web hosting is a horrible business.

There’s potential for massive profits: most customers of shared hosting and VPSes never come anywhere near their resource allocations so the machines can be extremely oversold, and most dedicated-server customers keep paying the “new” price of the server every month for years after its value has plummeted through the floor.

But it’s also highly commoditized: hosts can’t differentiate their products very much, there’s effectively no barrier to entry, switching at any time is fairly cheap and easy, and most customers buy primarily on price.

Long-term reliability and reputation are spotty and hard to evaluate. Most customers haven’t tried many hosts, so reviews have little context or credibility. Even credible reviews may not apply to your situation, since customer needs vary so widely — a novice running a small phpBB forum on a managed VPS with cPanel will have a very different experience than a sysadmin running a high-traffic web app from ten unmanaged dedicated servers. And since large hosts have complex infrastructures, different customers of the same company at the same time with the same needs can have very different experiences by being in different datacenters, behind different routers, or served by different virtualization-host servers.

Most hosts are mediocre or overpriced, so when word of a good, reasonably priced host gets around, they usually get a deluge of new customers, leading to frequent changes and growing pains. So even if you pick a “good” hosting company, being their customer today or next year might be significantly worse than it was when their good reputation was built.

The combination of high profitability, heavy competition, lack of differentiation, and volatile reputations leads to frequent mergers and acquisitions.

As just one small example: if you were an EV1 Servers customer ten years ago, a 2007 merger forced you to become a customer of The Planet instead. But in 2010, SoftLayer — which was formed by ex-executives of The Planet — pulled a NeXT and “merged” with The Planet by taking it over, “sunsetting” its infrastructure, and making you a SoftLayer customer… until a few months ago, when IBM bought SoftLayer. Now you’re a customer of a Wikipedia article with “multiple issues”, wondering where your commodity web host fits in “a branded ecosystem of cloud computing products and solutions from IBM” as they assure you nothing will change for the worse.

Web hosting customers are nomads. If your host hasn’t been ruined yet, just wait.1

Today, news broke that GoDaddy bought Media Temple. GoDaddy is a horrible company run by horrible people selling horrible products. Media Temple made a big name for themselves in the late 2000s with modern design, strong branding with lots of parentheses, and heavy marketing in the Rails and design communities, but I’ve never been a customer of theirs — they always looked overpriced to me, and they’ve had a lot of growing pains.

If you’re a Media Temple customer wondering whether you should prepare for the worst, the short answer is: probably. While GoDaddy claims that Media Temple will be run as a separate business, with the implication that nothing will be changing and Media Temple customers shouldn’t be worried, look at the language they’re using:

As for why [Media Temple] decided to finally exit after all this time, co-founder Demian Sellfors said that this was always the plan.

“We’ve had our eye on an exit since we started 15 years ago,” he told me. “We regard ourselves as entrepreneurs first and we designed it for exit from the start, even if on the way we accidentally built a phenomenal culture and a business that resounded with the marketplace.”

Translation: “I’m outta here.”

Virb was acquired by Media Temple last year, but isn’t included in the GoDaddy acquisition. Virb’s blog post is so clear that you don’t even need to read between the lines: (emphasis theirs)

After early meetings with GoDaddy, it quickly became apparent that we shared different visions for our website builders. So… I’m thrilled to announce, GoDaddy has decided Virb will be sold back to its original founder and investors, Brad Smith (that’s me) as well as Media Temple’s co-founders Demian Sellfors and John Carey.

Translation: “We hate GoDaddy, and we’re all outta here.”

It looks like there are about to be a lot of job openings at Media Temple, even at the highest ranks. (And who will GoDaddy replace them with? Open-minded, outside hires? Sure.) Some turnover after an acquisition is normal, but this looks above average already, and likely to get worse — how many people with enough taste to create and run Media Temple are likely to have a positive opinion of GoDaddy?

Shawn Blanc is more optimistic, hoping that this “new GoDaddy” is improving and becoming less horrible, but I don’t believe that for a second.

If you’re at Media Temple and not running for the exits yet, I suggest that you at least make an escape plan.


  1. People always ask me what host I recommend. Since the environment is so volatile, take all of this with a grain of salt:

    For VPSes, I use and recommend Linode. They’ve been remarkably consistent over the last couple of years, and their control panel is excellent. I ran some test servers on the cheaper, SSD-equipped DigitalOcean over the last few months, but found them to be inconsistent and immature. I think they’re having trouble keeping up with their growth.

    For dedicated servers, after prior mediocre experiences with Rackspace and ServerBeach, I hosted both Tumblr and Instapaper at SoftLayer (well, The Planet first) and was generally happy most of the time. But in the last year, their pricing (especially on RAM) has become less competitive and the salesman discounts have become weaker, and the IBM acquisition has me worried for their future. After testing Overcast cheaply for months on Linode, I just deployed it full-scale on a server at Limestone Networks, which has very good pricing, but looks a bit young and unproven. Here’s hoping it doesn’t suck.

    Of all types of web hosting, shared hosting is consistently the worst. It’s the cheapest by far, and you get what you pay for: I’ve never used or heard of a shared host that was consistently good for most of its customers. My least-horrible experience was with DreamHost, so I guess I “recommend” them: if you need the worst kind of web hosting, you might as well not pay much for it. 

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