May 23 2008
Red Ocean – Hosting Industry In Malaysia
It’s a cut throat competition in Malaysia, not to mention we are also competing with hosting service providers around the world, even Google!
Just a few years ago hosting providers were offering hosting space for less than 50MB. Now they must offer space in terms of gigabytes (and even more)! The competition seems to be based on who can offer more space, and so we have to offer more space to keep up with others. This translates into higher costs for all players.
Just a few years ago we could charge RM280 for 30MB. Now you can get gigabytes at the same price and even more! Hosting providers are constantly pampering the market with lower and lower price. This translates into lower margins for all players.
Hosting space and price alone are enough for us to suffer. With lower and lower margin, it may not be profitable to keep doing the same things. Perhaps this industry is also no longer attractive for new entrants. But luckily my company can survive thanks to the number of customers we having, for now.
Anyway I found one or two hosting companies doing quite well in seeking a way out of this, by offering hosting packages bundled with other products, charging unbelievably low price for the first year, packaging their services as tangible products, branding themselves as solution partner to certain market niches such as bloggers, and doing other innovative things.
I do have a few ideas to make the red ocean a little bluer. Just sit back and watch out, who knows I may surprise you? 
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