There will always be a market for a smaller host.
Being big does not always equate to quality or good service.
Nor does being small obviously.

The key to small range hosting is retention. When you get clients you keep them.
Big hosts can afford to blow off complaints and have large turn over but a small host needs to go the extra mile to keep all clients satisfied.

A small company can make a very good living doing only local marketing at a comparatively cheap cost.