cPanel Price Increase 2019 - Update

A Change in cPanel's Pricing Policy

You may have heard the news about the sudden, large increase in license prices announced by cPanel in 2019. The news caused enormous shock and great unrest across the entire web hosting industry. The story is extremely interesting because it is a textbook example of what any business owner should avoid. So it is worth giving 10 minutes of your time to read the timeline.

cPanel

cPanel is server management software for web hosting environments. cPanel, the company that makes it, holds a market share of over 80%, and some claim the figure reaches 90%. It enjoys a monopoly position, since it is the company that has been setting the industry's trends. Basically, cPanel introduced a technology first, and the rival software followed later (sometimes much later). A typical example is Plesk, the second software by market share (about 10%), which introduces technologies 1 year after cPanel.

As software, it is built on the Perl programming language. It is stable (though not as stable as it should be, of course) and relatively easy to use for a professional. cPanel's innovation was bringing all the small quality tools together into one larger piece of software. Web hosting had always relied on scripts. cPanel integrated all the free open source scripts that were worth having and made them available with just 1 click. Because it helped every hosting provider simplify its work a great deal, and because it was offered at reasonable prices, it established itself as the top choice in its category. cPanel was the name in the industry.

This success made cPanel a very tempting investment for big investors. Many times in the past we read about large offers that its owner turned down, without ever learning the exact amount offered. Until the offer he could not refuse came from Oakley Capital.

Oakley Capital

A few months ago cPanel was acquired by a fund called Oakley Capital. It is a very large fund based in the United Kingdom, with unknown investors and a bad reputation (like almost all funds). It buys large companies in the e-commerce sector in America and Europe and applies a skimming policy (for those familiar with marketing theory). The fund became more widely known in the industry when one of its companies, Webpros, acquired Plesk in 2017. In 2018, through Plesk, it acquired SolusVM, a platform for creating VPSs. The same year it acquired cPanel, which caused quite a few reactions even then. In 2019 it acquired WHMCS, the billing system used by most web hosting companies worldwide.

With the purchase of Plesk and cPanel, Oakley controls more than 95% of the web hosting industry! This fact alone makes it almost a monopoly. According to experts, the competition authorities of the European Union and the US should have stepped in. Because it can reshape the industry at any moment, as it wishes, with a change in prices. Which is exactly what it did. And with the purchase of WHMCS it showed its intention to become the price-setting force in the industry. Below we will explain what makes Oakley untrustworthy.

The cPanel price increase fiasco

It was expected that cPanel would raise its prices. It had not changed its prices for a great many years (almost 15 years). The old management was satisfied with the company's revenue and profitability. So it did not see fit to raise prices and upset its millions of customers. Although on the surface the management did not change, the owner of the company did. Investors, naturally, want to get back the amount they invested as soon as possible. As a result, they changed the pricing policy, which brought huge increases in license prices.

cPanel, however, had not informed anyone about the upcoming price increase. Not its large customers, not its resellers, not its close partners. That was the worst part of the whole “fiasco”. One day in June, in the middle of the holiday season, they decided to go ahead with the largest percentage price increase in the history of the web hosting industry (and undeniably one of the largest in any industry). This caused unrest, dissatisfaction and anger.

The situation gets more complicated

It was clear to us and to many others in the industry that a price increase was to be expected. The investors expect to recover the capital they invested in buying cPanel as soon as possible. What was not expected, and came as a surprise, was the pricing policy cPanel chose. They introduced a “per account” pricing model for both VPSs and Dedicated Servers. It does resemble that of Plesk, which now belongs to the same fund, but it is clearly worse.

This change hit the industry very hard, causing immediate problems, since it completely changes costing and profit margins. Previously, cPanel licensing was extremely simple. They offered a VPS license at $20 a month and a Dedicated license at $45 a month. In terms of accounts, there was no limit at all on how many accounts you could host on your server. cPanel resellers offered each license for as little as $15, a reasonable price. This pricing regime applied for more than 15 years across all control panels. Those that tried to introduce a different pricing model in the past “vanished from the map”.

The old pricing policy

Until recently, cPanel licensing was extremely simple. They offered a VPS license at $20 a month and a Dedicated license at $45 a month. In terms of accounts, there was no limit at all on how many accounts you could host on your server. On average, a Dedicated Server hosted 3000-4000 accounts. These shared the $45 cost of cPanel and the rest of the software.

This pricing regime applied for more than 15 years across all control panels. Those that tried to introduce a different pricing model in the past “vanished from the map”. The recipe that has been proven to work is paying for each license regardless of the number of accounts on the server.

The new pricing policy

Under the new pricing policy, for the price at which you used to buy a license for the whole VPS, you now buy a license for just 1 account/user. For up to 5 users the license costs $20 a month. For up to 30 users the cost is $30 a month.

For up to 100 users the cost is $45 a month. This is where it gets interesting. Each additional user above 100 costs $0.20 a month. So let's recap:

Previous price: cPanel Dedicated License – $45

New price: cPanel Bare Metal License – $45 (limit of 100 users)

3000 users x $0.20 = $600 (+ $45 license) = $645 a month or $7,740 a year

For an average hosting business, the price went from $45 to $645 a month. That translates into an increase of 1,333.33% for the cPanel license alone, every month … Will the hosting provider absorb this increase? Or will the customer accept a higher price for their plan? Neither, of course. The provider will choose different software and abandon cPanel.

The backlash against cPanel

The gigantic price increase is in itself one factor that caused a backlash against cPanel. However, what infuriated many of its partners was the way the matter was communicated. cPanel's communication was highly unprofessional, because of the lack of adequate notice. Clumsily and with a lack of respect, cPanel informed everyone in the same way, through its blog. Not even cPanel's closest partner companies knew about the changes. A telling case is that of its largest partner, which found out about it from a customer's support ticket. Even the notices through the other communication channels arrived late.

This, as you would expect, angered the whole industry. It showed the manner and the attitude with which the fund wanted to treat cPanel's customers and partners. There was already a negative predisposition against the fund. This development was the last straw. Justified and widespread reactions flooded the cPanel forum within a short time. The reactions were so strong that cPanel temporarily stopped new accounts from being created on its forum. Everyone wanted to show how furious they were about this decision.

A week later, cPanel published the response of its former owner, creator and current director to the reactions. After the classic line about listening to the feedback, he simply explained how partners would be billed. They took nothing back… They just presented the new pricing model for their resellers in more detail.

Providers call for independence

This event made clear to the whole industry that providers need to become independent of software companies. The now extremely high price and the poor treatment of customers were the trigger for putting the future of the industry up for discussion. Quite a few providers are promoting the idea of supporting small, independent open source software. They do not want the same story to repeat itself. After some research we saw that there are indeed web hosting management tools that are very promising. They do not belong to companies, they are open source and each is based on a community of developers. Unfortunately, though, they are not supported or updated enough and they are far behind cPanel. If they are supported properly, they could become a fine alternative on the road to independence in the future.

Providers feel betrayed, because the new pricing policy is as if it were pushing them out the door. Providers have three reasons to change software. First, they want to leave cPanel for obvious reasons. Second, they want to get out from under the fund's umbrella to avoid similar situations. Third, they want to stop depending so heavily on a single company. An alternative must be found to cPanel, Plesk, WHMCS and SolusVM. We believe these trends will hit the profitability of these companies hard and will become a driver of change in the industry.

Independence is always, and in everything, legitimate. The question is at what cost a company becomes independent at software level. You can leave cPanel. cPanel's price increase helps such thinking along somewhat. But where will you go, and when?

Where KONET stands

Fortunately, at KONET we never piled 3000 accounts onto one server. This practice would certainly have cut costs considerably and increased profit margins. However, the risk of data loss is great. If the data on a server with so many websites is lost for reason a, b or c, and the backups do not work for reason x, y or z, the reputation and reliability of the business will be destroyed. The risk is big, and no profit margin can cover it.

We host a significantly smaller number of accounts per server. Even so, we too face a huge percentage increase in monthly costs. Because of this, we are unfortunately forced to raise the prices of our Web Hosting plans.

We carried out in-depth market research to find an alternative. For now, unfortunately, there is no worthy alternative to cPanel. Plesk, the second in sales, is at best 1 year behind cPanel in upgrades and features. On average it is 2 years behind in capabilities… It has neither the documentation, nor the support, nor the community that cPanel has. Direct Admin is also a counterproductive solution. It is cheaper, but it needs at least 2 years of development to catch up with cPanel, if it ever does. The other tools are even further behind and have serious security gaps… Despite the many good points they show, they cannot provide the stability we require.

To sum up. cPanel has raised its charges. This forces us to raise our charges too. Thank God there are many control panels that have been strengthened by these changes cPanel caused. We hope this will boost competition. But none of them can be a reliable alternative right now. So for now we are staying with cPanel, and in the long term (3+ years) we are looking to find an alternative.

For what happened next, see the article the new cPanel price increase from 2024.