Another One Bites the Dust: AWS and Azure Kill Off Another Competitor in GoDaddy

One more cloud vendor has found out that unless you go big, you get wet. GoDaddy has decided to move out of the public cloud market, which it entered with much flag waving and fanfare in March of 2016. This is starting to be a common theme, with vendor after vendor giving up the ghost. VMware recently offloaded its vCloud Air division to OVH.  

Some have said that GoDaddy’s cloud was in direct competition with AWS, but I did not see it this way. Yes, GoDaddy used the same technology partner as AWS to provide a simple onboarding process. The partnership with Bitnami gave its customers a quick and easy way to mix and match over 140 applications to GoDaddy hosted cloud servers. However, GoDaddy’s audience comprised much more cost-conscious SMBs, not enterprises. This was both a boon and a bane. GoDaddy had the chops in the SMB market space with its pile-it-high, sell-it-cheap domain name and website business, and the OpenStack-based IaaS cloud did at least make sense for those customers.   

However, it was not to be. GoDaddy has sent emails to its customers explaining the timescale for the closure, and SVP of Hosting Raghu Murthi confirmed the shutdown with the following statement: “After serious consideration, we have decided to end-of-life our cloud servers’ product. Our goal from the beginning was to create simple and scalable services for small and medium business owners. We’re proud of what we built, and now we are focusing on building a robust and scalable solutions based on OpenStack infrastructure. GoDaddy Cloud Servers provided numerous learnings for us that we’ve already been applying to other products and services.” What is interesting is that if you read between the lines of Raghu Murthi’s statements, this is not a full reversal from GoDaddy’s public cloud ambitions, but rather a refocus. This position is further backed up by the comany’s statement in its email that “In the coming months, we will be informing you of some exciting opportunities to move your services to other GoDaddy products.”

It’s not clear whether GoDaddy has any plans to offer cloud services down the line. This is not its first time to the open/shut rodeo: it pulled out previously in 2012.

This raises the question of what exactly GoDaddy will do with its OpenStack investment. Can it just keep offering websites and cheap domain name services? Yes, this is still a lucrative business, so it will be able to keep the lights on. Recent acquisitions point to more diversified services and product offerings. Sucuri, one of these acquisitions, provides a method to secure websites without the need to be Kevin Mitnick. ManageWP and WP Curve provide a simplified method for administering WordPress-based websites, and FreedomVoice provides a cloud-based messaging platform that will give the company plenty of room for maneuver and upselling from a basic website. These services, coupled with a valid and robust OpenStack environment, will allow GoDaddy to expand out of its IaaS ambitions and perhaps move to more platform- or service-based offerings—it is difficult to say. What exactly will happen to its customers that are already in its cloud? Most likely, they will be pointed toward GoDaddy’s VPS product. This is a more traditional virtualization offering.

One wonders who, if anybody, can push AWS and Azure from their positions of power. Many have tried, and many have fallen by the wayside. Oracle is talking a good talk, but again, it is purely enterprise focused. SoftLayer and GCS are also enterprise focused. AWS and Azure are dominant not because they are enterprise focused, but because they know how to deal with the SMB marketplace. However, just because they understand the SMB marketplace does not mean that they are the best place for SMB customers to place their digital assets.

At this moment in time, their position of hegemony is secure. However, as the Chinese move their clouds global (Alibaba, for example), this could change. Another thing that could trigger change is if enterprises and countries start to turn to smaller, more insular nation- or region-based clouds with no ties to the US, or if other countries start to gain traction. That would open a whole set of different kinds of issues.


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