I hesitated for a long time to publish this article. I’m aware that this could be construed as me slagging off on a vastly larger competitor for the attention, even though I’m under no illusion about how many people actually read my writings. I’m also aware that criticizing competitors goes against professional courtesy. I do technically compete with EIG, even though in the time it takes EIG’s CEO to blow his nose he gets more new customers than I have customers total.
Yet I find the business practices of EIG rather gross, and I feel obligated to be part of the movement that’s grown over the past few years dedicated to shining a light on their duplicitous business practices as a warning to customers. So, keeping this as professional as possible, let’s dive right in to one of the largest mystery companies in the web industry.
On Thursday, June 22, I finally completed a months-long process: I moved my own website and all of my web hosting clients (I have enough that this was no small task) from HostGator’s reseller web hosting to the dedicated hosting servers of InMotion Hosting. Since 2013 HostGator had experienced a steady, saddening decline in website speed, uptime and service quality. Chat support reps seemed less knowledgeable, some of them spoke in broken English and others needed to be asked questions several times to get clear answers.
Similarly, Bluehost, once the cream of the crop of web hosting companies even at a shared hosting level, has seen an appalling plunge in service quality for reasons that I outlined in this article. Bluehost’s support reps had degraded to constant finger-pointing and blame game playing over their own issues and linking to random Wikipedia articles.
Not to be outdone, another current client of mine had his website unceremoniously shut down with no warning by JustHost because of a rumored security breach – even though he was paying extra for the “guaranteed protection” of a JustHost security suite. My client was upset at the time, telling me that he’d have never expected this from JustHost.
What do all of these companies have in common? Their falls from grace coincided with their respective acquisitions by Endurance International Group.
Endurance International Group, or EIG for short, is a web hosting conglomerate; essentially a parent company. They’re absolutely massive to the point where they’re probably the largest web hosting company in the world today.
After being founded as a web hosting company in 1996 in Burlington, Massachusetts, EIG kept a relatively quiet presence. They didn’t have the visibility of Network Solutions or GoDaddy for a long time. Around 2010 was when EIG started…not making a name for itself, per se, but becoming a much larger presence in this industry. In 2011, Endurance was bought from Accel-KKR by Warburg Pincus and GS Capital Partners, for around $975 million. In October 2013, they went public in October 2013 after raising $252 million. In a 2015 earnings call, EIG reported a remarkable 4.2 million worldwide users.
So how has this company that even many burgeoning web designers aren’t familiar ascended to such monolithic status? This company does virtually zero advertising of its own and is nowhere near of a household name even to web developers in ways that CloudFlare or GoDaddy are. What’s their secret?
The answer is simple: EIG has bought its enormous status through a massive, frantic spree of acquisitions over the past several years. EIG has acquired some of the biggest names in the web hosting industry and controls 60 brands, including HostGator, HostMonster, FatCow, iPage, JustHost and BlueHost. A full list as of January 2017 can be found here (more on this later).
EIG often makes these large acquisitions with very little fanfare and it can be argued that they go out of their way to hide this business practice. You won’t find a full list of EIG-owned brands on its website other than some very visible, cherry picked acquisitions that received significant press. The company’s press release section conspicuously lacks any press releases about its extensive history of acquisitions. Research As A Hobby, in its own research on the company, made the curious discovery that EIG removed a page from its own website with this little gem:
Acquisitions are a key component of our growth strategy. Using a proprietary methodology, we have completed acquisitions with more than 30 hosting companies and migrated hundreds of thousands of customers onto our platform since 2001. (Source: a copy saved on June 28, 2012)
Unfortunately there’s a simple reason why EIG goes out of its way to be quiet about its acquisitions and what companies it controls: EIG has a very bad reputation of causing the quality of web host it acquires as subsidiaries to absolutely plummet. Review Hell has chronicled the shockingly recurring instances of downtime for millions of customers over the past several years:
December 31st, 2013 – Bluehost, HostGator Among EIG Brands Hit by Massive New Year’s Eve Outage
May 19th, 2014 – Yet Another BlueHost and HostGator Outage
Outages are bad enough, but there’s also the issue of plummeting service quality, slower website speed and general lack of reliability. Individual stories of business owners or developers expressing dismay with the state of their web host after an EIG acquisition appear again and again. So what’s going on here?
The siphoning of resources is simply a cost cutting measure by EIG designed to do business by reducing expenditure while increasing profit margins. EIG “optimizes” cost structure by moving its customers to much less reliable hardware. Here’s Review Hell again with the state of HostGator after its acquisition, and I can vouch for this one personally:
The switch from SoftLayer to the EIG-owned datacenter in Provo, Utah is one of the biggest reasons HostGator customers saw a reduction in quality and service. Since EIG took over HostGator servers were a lot slower; support staff was not as helpful; live chat, tickets, and phone support response times increased; etc. A combination of these problems has shed some light for existing customers and many have made the switch to other hosting companies.
EIG has also become notorious among savvy web hosts for significantly restructuring the entire business model of a successful web hosting company as part of said cost cutting measures. It turns out that EIG almost always scales back or completely lays off the existing support staff, opting instead to use their own internal support staff. According to Review Hell and Web Hosting Talk these internal support personnel are often short staffed, lacking understanding of an acquired company’s customer base and culture, and are often trying to juggle a large number of customers at once.
As a result there simply is not enough to staff to deal with the growing customer base as EIG continues buying up web companies at frantic levels. Customers deal with lower quality support, which could be reversed if the decision makers at EIG put a greater emphasize on staffing and training their technical departments, which…let’s be fair, they’ve shown no inclination to do.
The insidious part, again noted by most of EIG’s other critics including Review Hell, is that customers only see EIG-owned brands externally. They don’t look different even if they might feel different:
In most cases, both existing customers and potential new customers of EIG-owned companies will only see these brands from the outside. For example, HostGator still looks pretty much the same as it did – they continue to have the same brand name, logo, website, promotions, plans, etc. However, EIG has completely revamped and overturned the administration and technical side of the business.
At this point you’re most likely realizing what the endgame goal is of EIG acquiring so many trusted brand names in web hosting. Let’s say you’re fed up with HostGator – whether or not you realize EIG now owns them – and decide to go searching for a new web host. You might quite reasonably do a Google search and look for the resulting lists of best web hosts. Or if you’re slightly savvier you might look at an industry review of the best web hosting services, like Hosting Facts.
If based on your research you decide to move to BlueHost or A Small Orange based on your research, you might not even realize that EIG owns both of those as well. As a result, EIG has not only retained you as a customer but you’re likely to deal with the exact same problems you encountered at HostGator.
In short, EIG’s core strategy is to become the biggest in the industry without regard to the detrimental effect it has on its acquisitions or their customers. As a result EIG has essentially adopted a strategy where it operates as a shadow web host, banking on customers to stay uninformed in order for them to be retained.
This is bad business. It’s anti-consumer, it’s unethical, and it creates an adversarial relationship with your own customers. This shouldn’t be how any company conducts business.
I already know the usual rebuttals: EIG is a business, it exists to make money, it’s not breaking the law, and business isn’t fair. Even if you accept those things to be true it’s not an excuse to bank on keeping customers uninformed as a business strategy. Legal scrutiny is one thing; ethical scrutiny is another.
So to reiterate, look at this list of web hosting companies under the EIG banner. If you see yours, or one you’re considering working with here, I would strongly consider an alternative.
The good news here is that despite the company’s best efforts EIG is not a monopoly. There are still many independently owned web hosting companies or even subsidiaries that want to make money and be successful while also emphasizing uptime, customer service and reliable support. Just to prove that I’m not shilling for web hosting clients (though I’d be remiss if I didn’t point out that I am happy to host you!), I must give Hosting Facts credit. They penalize a number of EIG-owned brands on their list but they give the nod to several web hosts I’d recommend.
A2 Hosting, SiteGround, Dreamhost, and of course, InMotion Hosting are all safe bets. The latter company is one I can now definitely vouch for, especially given how easy they made migrating a huge reseller account like mine.
Update 6/26/2017: It’s been brought to my attention that EHost, which I previously recommended, is part of EIG and a sister brand of IdeaHost, with the same systems as each other. As such I’ve removed them from the list of web hosts I’d recommend. Shout out to Two Palms Host for pointing this out to me.