MidPhase Study Says SMBs Hit by Recession

Last week, hosting provider MidPhase issued the results of a study the company conducted with customers, which found nearly 60 percent of small and medium-sized businesses felt they had been affected by the recession.

Surveying more than 3,000 of its SMB customers, MidPhase asked customers about changes in their revenue and the reasons for those changes, along with a series of questions about their hosting needs and choices.

"We feel this is a true cross section of American Internet users," says Marc Bollinger, Midphase general manager, quoted in the press release.

According to the study, 58 percent of customers indicated a decrease in revenues ranging from 5 percent to more than 60 percent. One of the main reasons cited was the difficulty of finding new customers.

MidPhase says many customers indicated that they have sought to create new revenue streams through online business, with 60 percent responding that they are “supplementing their existing income with a web presence.” More than 47 percent say their web presence will represent less than 10 percent of their income. Many of them expected that amount to grow.

MidPhase is one of several hosting companies (Fasthosts and The Planet among the others) that have recently begun conducting and publishing customer surveys as a way of gathering information about their target markets while also becoming more expert in the needs of the customers they serve. These projects suggest the first steps in a trend toward placing value on in-house research within the hosting business. Certainly, hosting providers understand the value in the appearance of thought leadership in whatever market they choose to serve.

Hosting software company Parallels recently appointed former Tier 1 Research associate Joshua Beil to create a research practice within its business. Beil conducted an email interview on his web hosting research with the WHIR in August.

"People are going online to make money,” says Bollinger. “A motivated individual can have a new business up and running in a matter of days; and we're providing the tools to do it. 71 percent of the respondents said they looked at three or more hosting companies before selecting Midphase and 70 percent claimed that our products and services were important to the success of their businesses. This indicates our customers carefully selected a hosting partner that would enable them to succeed."