Honesty or Reliability? I think most people would choose reliability over honesty. If that's the case, then LunarPages has trumped the business model of DreamHost. This article intends to look at the business implications for the web hosting companies in their two different strategies, and the results for their bottom line and overall customer appeal. The two companies have somewhat of a rivalry going on, partially due to them being relatively similar in scope and size and thus good comparisons can be drawn between the two.
While Dreamhost has starkingly honest omissions of any error on their "status" blog, LunarPages has far less updates on their blog and is generally against frank omissions of error. The DreamHost strategy, is that by reporting on any error, and assuring the customers they are being dealt with, has a twofold benefit.
First, the strain on customer service will be reduced by customers who experienced that problem, but can rest at ease that it is being deal with. Second, for those who did not feel the error, they can look at all the past problems that were experienced and their quick resolutions and feel confident in any future error that it is being resolved. Also, this method led to their casual addressing of a problem earlier this year.
A simple DreamHost "typo" caused the prior DreamHost billing cycles to have nearly $2 million in erroneous charges. Because they decided to report this on their blog, as always, rather than keeping it limited to a professional notification sent to each user directly, many users who suffered overdraft fees, credit card expenses, and other problems felt insulted by their "Do'h" Simpsons reference and other joking references on the subject.
Whereas, the Lunarpages on the other hand, does not report every little error on a blog, and generally purges overly-negative comments on their forums, as opposed to DreamHost who will accept and address those situations. Assuming that 90% of most errors are not felt by the vast majority of webmasters who do not dote on their websites constantly, perhaps reminding them of previous errors could make them uncomfortable. The webmaster will realize a delay in service occurred that he would not of otherwise known. If this is true, LunarPages will benefit from that ignorance, and DreamHost will suffer from needlessly worrying their users.
One could argue DreamHost's method may foster dissent, and ultimately allow fellow DreamHost users to band together in dissent, perhaps forming critical websites themselves, LunarPages' method suppresses it and leads to far less critical pages being developed, as there is no basis for fellow LunarPages users to communicate their concerns and learn the extent of any failures.
The proof is in the pudding, perhaps, and the fact is LunarPages does slightly lead DreamHost in revenue and growth. As one merely searches for DreamHost, you can find via google three times more DreamHost complaints in the form of critical webpages, 34,000 results for the term "DreamHost complaints", whereas LunarPages has an amazingly small number of 12,000 for "LunarPages complaints". DreamHost has indeed had more problems, failing to survive the LA blackouts as LunarPages did (both are based in the greater LA area).
So whether their comparative successes depend on solely this factor is of course untrue, it does however, play into their successes or failures of marketing their product. Perhaps at this point it is impossible to deem one method a complete failure or success. Only time will tell.
Jonathan Baldwin runs a Web Hosting Comparison website, where you can find this article, LunarPages vs DreamHost and reviews of Cheap Web Hosting Services.
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