Hosting Downtime and Competition

Hosting and colocation are highly competitive businesses. That competition gets heated whenever a prominent provider experiences an outage, as rival providers seek to poach customers who are unhappy their site is offline and searching for news about the outage.

For many years "rescue marketing" was commonly seen in Google keyword searches, as hosting companies would purchase text ads tied to keywords, including trademarked brands of a provider experiencing an outage. Frustrated customers Googling for information would encounter hosting offers from competing firms.

In recent months the trend has shifted to Twitter, where rival hosts have begun pitching their services using hashtags, the topical phrases included in Tweets (such as #fisherfire) to aid topical searching. By adding an outage-related hashtag to an "adverTweet," some providers have sought to market their services to customers affected by outages.

ServInt brings an interesting perspective to outage-related marketing in a blog post today, in which CEO Reed Caldwell discusses the recent outages at Rackspace and reflects on the post-downtime scramble for customer loyalty.

Caldwell notes that ServInt has been in business for 15 years and suffered a major outage in 2004. "We have had honest, healthy competition from friends and colleagues and we have seen disingenuous poaching by hundreds of companies who - surprise - aren’t around anymore," Caldwell writes. "What we are seeing now is a reminder of how a responsible company handles a serious issue, and how some companies try to take advantage of that.

"(Rackspace) had a bad week, but are holding themselves accountable and encouraging their customers to do the same," he continues. "Ultimately, the true test of a company is not how well it does at the top of its game, but how quickly it gets back up. Rackspace will get back up and we look forward to it.

"There are several companies, if you can even call them companies, who have been in business for less time than a stale pot of coffee and are throwing mean spirited, transparent promotions out to justifiably angry customers. We feel this is not only in bad taste, but it is unethical and an excellent testament to how they view their fellow hosting providers. You attract customers by providing great service and thereby earning it, not by bashing someone else’s."

Is "rescue marketing" a winning strategy or a shady tactic? Do customers respond to these pitches? In our experience, customers' willingness to jump ship is closely tied to the details of the incident, and whether it was avoidable. But it is also influenced by what they learn about their provider during an outage. We've seen plenty of examples of both good and bad customer communication during downtime.

What's your take? Share your thoughts in the comments.