Over the last few years we have seen a number of high profile entrants into the web hosting market, but we have also seen a number of high profile mergers and acquisitions. After this burst of activity, is the consolidation phase now over? Can we now look to the future?

Unfortunately for many, consolidation in such a competitive sector as web hosting will be constantly ongoing. One of the main problems seems to be saturation in the market place, and the ever increasing cost of advertising for new customers, not to mention pressure on margins. This has enabled a number of the smaller players to look towards adding a larger partner to their business, becoming part of a more securely financed group and being able to offer more services.

When the merger is optional it can be very beneficial to both parties, but some of these deals can get nasty, with the bigger boys looking to squeeze the smaller companies out of business, and then pick up their customers for nothing. This can be when the consumer will suffer in the short term, and possibly have an unplanned move forced upon them.

It seems that more and more the web hosting business is becoming a side show for the main income streams of today, which include web design and the many other advisory services. This is fine if you have more arms to your business, but if you only have web hosting services to offer then you are in a very difficult position.

The world of web hosting is cut throat, and will remain so for some time to come. You will see many changes and deals announced in the future, although the long term direction of the industry is still unclear.