Web hosting and economic downturns

How is Web hosting affected during an economic downturn? From both a user and a host perspective, the answers vary. User View Depending on your host, things can get much better or much worse. People usually stop spending money on things deemed un-necessary during a downturn, and hosting usually falls under this category. Because of this, hosts will often enter into price wars in order to attract business from those who are still looking for hosting. This can be good for you, because it means you will be spending less on hosting. This can also be a bad thing, however, because it may mean the host has cut corners on the quality of the service, or on the quality of customer support. Host View A few years ago, the prospect of an economic downturn would not have been so scary a proposition. Lots of people still needed hosting, and competition was not so fierce. But things happened (such as 1and1 entering the U.S. hosting market, GoDaddy gearing up its hosting service, and a plethora of free hosts launching) that caused competition to thrive. Another extended economic downturn may not be so pretty. Users are far more likely to choose dominant hosting providers than go with an unknown name that may go out of business due to cash flow issues related to a recession or economic downturn. Bigger hosts can also offer better incentives and discounts to get users to signup. Your Thoughts What do you think? What does an economic downturn mean for hosts and hosting users? Daniel Briere runs the 07x.net free web hosting service. He has been involved with the Web hosting industry since August 2004.