The Abominable, Overzealous & Down Right Despicable Highway Robbery of Windows Web Hosting: A Brand Story

In the fairy tale land of the World Wide Web, where dreams, memes, and strategic theater build empires, there are two main players when it comes to hosting a website; Linux and Windows. But while Linux is arguably faster, more reliable, and more compatible with developer software, Windows hosting still comes at a premium price. Is this because Linux software is free and Windows is a big brand that comes with licensing fees? Why yes, this is true, but not in the way you might think.

License to Brand

Since their infamous deal with IBM to retain ownership of the MS-DOS OS way back in 1981, Microsoft has leveraged itself as a strong global brand. As the personal computer invaded homes in the early 90’s, so did their Windows platform and other proprietary software - software that doesn’t come cheap to hosting companies who must pay licensing fees. Ordinarily this would explain why Windows Hosting costs so much more in comparison to free open source Linux software. However, under further scrutiny, shouldn’t the cost of licensing Windows software when spread over a certain number of users make the difference in pricing less jarring? It would, except for the other barriers that the proprietary software has created.

Proprietary Software and Barred Entry

As stated before, the Windows brand thrives on proprietary software. Since its founding, the company has crafted a rich catalogue of go-to applications. Some software comes prepackaged on personal computers that oust potential rivals before they have a chance to penetrate the market. Other software, that isn’t for the mass market household-use, such as web framework applications and professional tools, come at a premium to purchase - a premium that an emerging developer cannot or will not pay. So what does the young developer do? He starts experimenting with technology that is free and readily available, like Linux-based applications. He learns to use it and manipulate it and becomes a force to be reckoned with.  Soon you have a generation of developers who have become experts and consultants, which builds equity for the Linux brand. Just as Apple used the “cool factor” as a challenge to the Microsoft Windows Corporate Giant, Linux has become the underground hero to emerging developers.

Effect of Developers on Market Share

So how does this effect hosting? Well, the biggest difference between Linux and Windows hosting is the framework applications that are used to create a website. If a developer uses ASP.NET, Access, Microsoft SQL Server, or any other Windows-based applications, then they will probably go with a Windows hosting plan. However, if they are a part of the generation of developers that are used to open source programs that are compatible with Linux, such as PHP or MySQL, then they will go with a Linux hosting plan. Based on market share data, more developers now prefer the Linux platform.

Currently, Linux controls 54% of the web hosting market, while Windows retains 25%. With less than half of the market, web hosting companies are not getting the number of users needed to make the cost of licensing fees negligible to their consumers. Through their licensing, the very same mechanism on which their brand was built, Microsoft has created a backdoor for a challenger brand to gain market share.

Strengths, Weaknesses, and the Bottom Line

So what is the moral of the story? Sometimes your greatest strength can become your greatest weakness. Microsoft has realized this and developed initiatives to counteract their loss of market share. One example is the Webspark program, where developers and small businesses can use Windows applications free for up to three years. They have also started offering cheaper servers. Finally, Microsoft has sponsored a lot of research showing how Windows-based servers are better and cheaper (in the long run) than Linux-based servers.

Whether Microsoft’s strategy works in their favor remains to be seen. While great hosting companies such as Westhost and Dreamhost still offer Linux hosting at a much cheaper rate, there are a few companies such as Midphase and The Planet who offer Windows hosting at comparable prices. This offers hope that one day Windows web hosting will give Linux a run for its money, while providing web entrepreneurs, and their pockets, a sigh of relief.