Complaints & Rumors

Is The Planet in peril?

2008 was a difficult year for The Planet. Founded in 1998, the world’s largest privately held dedicated web host, The Planet, faced mammoth challenges last year. An electrical fire in late May 2008 swept through their Houston data center, knocking out 9000 servers, impacting 7500 customers and 700,000 websites for at least two days. In October 2008, The Planet secured a massive $45 million dollar credit facility from Wachovia and Bank of America. The plans for this loan are still unannounced, but we can safely speculate that the money will be used for company solvency, market expansion, and a more diversified hosting portfolio.

Judging by their 4th quarter of 2008 report and recent, aggressive ad campaign, The Planet is starting on an uphill battle. The 4th quarter saw a modest addition of 1400 new customers, adding to a group of 25,000 customers and 14.5 million websites worldwide. In hopes of boosting sales, The Planet announced on January 19, 2008 a free month with a yearlong contract. Just a few weeks later, in mid-February, it began advertising 3 months free with a yearlong contract. These discounts are desperate, especially for such a popular and established host.

Speaking of desperate, let’s revisit the 4th quarter report. Three phrases stood out to me. The Planet acknowledged a “challenging economic environment,” but said that “customers can be confident in our financial stability.” These two statements are not inspiring, but “[The Planet] will again… deliver solid revenue growth in 2009” really gave me pause. In press releases, we learn more from what is left unsaid. The Planet did not speak of substantial revenue growth in 2008. It mentioned the word “again” which could allude to 2007, or even 2006. What we know about 2008 is that The Planet received a huge loan, and its flagship offering, dedicated hosting, is now being overshadowed by the more flexible cloud hosting.

In order to compete, The Planet expanded to three main hosting options, including self-managed, colocation, and outsourced managed. In February 2009, The Planet announced a new tool that guides customers into the best hosting option for their needs. Why The Planet decided to announce the implementation of this tool escapes me. Any one who can answer the 6 questions asked on the guide can also look at the side-by-side comparison chart and decide what’s best, without clicking through the questions. Most will find the guide an unnecessary distraction. It can only be supposed that the real purpose for advertising this guide tool is just to get more potential customers interested in taking the quiz. Once on the site, expect to receive a “3 months free” offer. One can only hope that this year is better than the last, for The Planet.

Rating:

Tags: credit, data center, economy, financing, managed hosting, The Planet, web host