Just five months after officially launching a cloud server product at the beginning of May, web hosting giant Go Daddy has quietly abandoned the model, choosing instead to focus on the more traditional product the company has seen success with.
As of yesterday, at least, the link to the cloud hosting products page on the Go Daddy website was redirecting to the company’s homepage, while last week the cloud servers provisioning tool was still live.
In a post made Tuesday on GigaOM, Derek Harris says an anonymous ex-employee of Go Daddy shared an internal memo, in which Go Daddy said the cloud server business wasn’t seeing traction among the small and medium-sized business customers on which the company is focused.
“After reviewing all of our hosting products, we decided to double-down on our shared hosting and site builder products and invest to win in these spaces,” Harris quotes from the letter. “As part of this focus, we will discontinue Cloud Servers as a stand-alone product.”
Go Daddy wasn’t available to discuss the issue on the phone, but CIO Augustine Goldman confirmed the move in an email comment.
“We are focused on SMBs and SMBs don’t use our Cloud Servers product the way we are offering it now. So, in the weeks ahead, it won’t be a stand-alone product in and of itself. However, we plan to continue developing cloud technology into our other hosted products,” he wrote. “We will continue to support existing Cloud Server customers in a variety of ways.”
Go Daddy is the first large hosting company to formally back out of the cloud server market, after joining the land rush that has seen the majority of web hosting providers rushing to develop some kind of pay-as-you-go cloud server product, following in the footsteps of market-leader Amazon and its incredibly popular EC2 product.
While I haven’t spoken to Go Daddy about it officially, it seems unlikely the company will stop supporting existing cloud server deployments in the near future. The company will probably wait for existing cloud server customers to migrate to other services before it ultimately ends the product’s life.
For the hosting industry at large, the impact of Go Daddy’s decision to back out of the cloud server business could be interesting. The company’s lack of traction, and lack of success with that particular product could be taken as a sign that traditional shared hosting providers aren’t equipped to compete in a cloud server market, where customers have different demands.
It could also mean that, as Go Daddy suggests, the sorts of SMB clients currently using shared hosting services don’t necessarily have a need for the scaling or pricing granularity that cloud servers offer.
Then again, it could say something specifically about the sophistication of Go Daddy’s customers , a true “mass market” audience, given the company’s success in marketing to the average Internet user and the first-time website operator.
Talk back: Is Go Daddy’s decision to back out of the cloud servers business a sign of failure, or a smart move away from a bad business model for the company? Does it suggest that shared hosting firms can’t compete in the cloud business, or reassure you that there’s still a big market for shared hosting. Let us know in the comments.