$23m to a WordPress biz? Why top-end hosting is big money

Website hosting may not be the first thing you consider when looking at tech industry growth, but venture capitalists North Bridge are betting different. This week, the investment biz sank $23m (£15.4m) in WP Engine, a hosting company in Austin, Texas, that specializes in the WordPress open-source online publishing software. …

[Anonymous Coward]

S&M

"The money will be largely spent on sales and marketing"

Anyone else see a problem with that?

[Tom Samplonius]

Re: S&M

""The money will be largely spent on sales and marketing"

Anyone else see a problem with that?"

If your platform is built (and they are offering services right now), and the market is the entire world, then yes, it usually comes down to sales and marketing.

[Ole Juul]

Expensive

the bet is that $29 per month seems reasonable for a personal website

Can someone explain to me what a customer would get for that amount of money that they wouldn't get from a $4.99 per month (or less) shared hosting plan? Some companies offering shared hosting have both excellent customer service and one click site building software or WordPress, or whatever you want. If the market is for first timers, I don't see them sticking around as soon as they see what they can get for a fraction of the price elsewhere. Perhaps this is what Keef (above) is hinting at. Sales and marketing doesn't actually offer any direct benefit to the consumer.

PS: I was just looking around earlier, and found that one can get a low end dedicated server for less than $20 per month. OK, that's not useable by most of the "personal website" crowd, but it's an interesting comparison with the prices on offer here.

[Tom Samplonius]

Re: Expensive

"Can someone explain to me what a customer would get for that amount of money that they wouldn't get from a $4.99 per month (or less) shared hosting plan?"

Geographically diversity. Shared hosting is one server in one data centre. And WP Engine also uses a CDN.

[Ole Juul]

Re: Expensive

Geographically diversity. Shared hosting is one server in one data centre. And WP Engine also uses a CDN.

For a personal web site? How would a site visitor even know if there was a CDN involved? From the Western side of Canada I can browse through a VPN in Eastern Europe and get perfectly good performance browsing a cheap shared hosting site in a Seattle data centre. Yes, I just did that to make sure. :)

[Anonymous Coward]

Alternative headline:

High-end hosting biz needs VC marketing money to chase low-end growth market.

There goes the high end.