Openhost, once an NZ-owned success story, is disappearing. Will customers stay local?
Yesterday, customers of our competitor Openhost got some news that they might not have been expecting.
"We are pleased to announce that Openhost and its products, services and customer subscriptions have recently been acquired by a leader in the hosting and domain name services field, Crazy Domains. …Crazy Domains is a division of Dreamscape Networks, an entity which operates a number of online service providers trusted by more than two million small business owners and individuals worldwide.”
- Openhost email to customers, 19 August 2021
In short, this is the end of Openhost as a brand, following the end of Openhost as an NZ-owned company last year. Around that time I wrote about acquisitions and brand mergers in the NZ tech sector, and web hosting in particular:
"A successful exit shows that you’ve run a good race. But historically customers haven’t always won from deals like these - especially after the original owners, who have deep ties to the people they serve, eventually move out of the company.
"Too often we’ve seen good New Zealand hosting companies move to new owners and end up delivering lower-quality service to their customers.
"The NZ hosting industry history books are littered with botched mergers and acquisitions, giving all NZ hosting companies a bad reputation."
- Me, 8 December 2020
Looking at yesterday’s announcement, and thinking about where customers fit into all of this, it feels like a familiar pattern repeating itself. This is one of those changes that works for a company’s owners and investors. Customers? That’s a different question.
It’s migration season. Will you take the Crazy option, or stay local?
Next month Openhost customers will be migrated off the hosting platform they were moved onto only a few months ago. Then they’ll be lumped in with Crazy Domains customers from all around the world. So ends the story of what was once the largest NZ-owned hosting company.
We have a number of customers who have come from hosting providers overseas, including businesses that started local but found themselves caught up in web industry acquisitions. A common refrain is that the service they got from overseas couldn’t meet their expectations, especially if they had once been teamed up with a local provider.
Nothing is set in stone, but yesterday’s announcement from Openhost seems to fit a familiar pattern. I worry that kiwi companies are about to be let down by a global megabrand that simply can’t build relationships with their customers the way a local business can.
Especially since a migration is happening anyway, it’s a good time to ask where you want to be. You could be another number in the books of Crazy Domains and Dreamscape Networks, or you could be hosted on our servers right here in New Zealand. SiteHost customers rave about our support and our managed services, and we love getting to know the people behind the sites that we host. The same expert team supports our sister brand, MyHost, and the straightforward web hosting packages that we offer there.
I worry that kiwi companies are about to be let down by a global megabrand that simply can’t build relationships with their customers the way a local business can.
My brother Nathan and I founded this company back in 2004, and we’re here for the long haul. SiteHost is 100% NZ-owned and staying that way, because we love being part of New Zealand’s close-knit industry. The relationships that we enjoy with our customers are incredibly important to us, but I can’t explain it as well as a customer who we spoke with recently, Dan Hay from The Fold:
"I've hosted with a lot of American companies, and their support is either next to none, non-existent, or handed off to a call centre that's really not well connected to the company at all.
"One thing that I've really liked with SiteHost is the proactive nature. When sites are heading into trouble, whether it's stretching the resources, bandwidth, CPU or often storage, we get someone from SiteHost contacting us saying, 'Hey Dan, this site was just about to fall apart, because it's just about to run out of resources. We've added a bit more to make sure that it's humming over the weekend. And now we can deal with it when you're back on Monday'.
"That's really awesome. Rather than getting a call from the client saying the site has just crashed, I'd much prefer that proactive approach."
We believe that New Zealand businesses deserve great local hosting options. Openhost customers should take a good look at what’s available from locally-owned companies like us and MyHost, rather than just going Crazy.