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Jeff Chandler

Automattic Makes Second Investment – WPEngine

WPEngine LogoThe big news over the past 24 hours is that Automattic has made their second investment, this time in a WordPress hosting company called WP Engine. WP Engine is a relatively new hosting company that manages WordPress.org installs for roughly 30,000 clients. The other side of the news is that a new partner program by Automattic called VIP Support For Webhosts which aims to provide VIP Support for Web Hosts including advanced systems and developer support for infrastructure-wide issues and improvements; annual review of the client’s entire stack as it relates to WordPress hosting; annual security audit and review of best practices and more.

Pretty cool to see Automattic making investments in WordPress centric companies. But what I want to know is, who can afford $50.00 a month for webhosting? By the way, the usual price is $100.00 per month. Congrats to WP Engine though for landing the funding and becoming the first partner program company for VIP support.

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27 responses to “Automattic Makes Second Investment – WPEngine”

  1. VIP Support for Webhosts is very good news. Something along theses lines is the only realistic way to prevent all the ridiculous problems that large webhosts were having with WordPress earlier this year.

    It is not that hard to keep WordPress running smoothly and a personal one-to-one connection with someone knowledgeable in Automattic, along with actual onsite work, training and auditing should ensure that the giant webhosts stop making dumb mistakes and giving WordPress a bad reputation.

    Is a quarter of a million per year too much?

    It depends. I see the trend towards all Webhosting essentially becoming WordPress hosting increasing. If a giant webhost can state that their provision of WordPress is “Automattic certified”, that will be a valuable competitive edge. Frankly, they also seem to NEED the help – I recently set up WordPress for a client on Godaddy and was shocked by how needlessly messy and time-consuming the process was and that was on an account specifically sold as “WordPress hosting”!

    I would have imagined that a company as massive as Godaddy, with presumably millions of hosting customers, would have got WordPress done to a fine art but no, they really haven’t.

    So, what Automattic are selling is on-call expertise, marketable certification and, effectively, the “official” endorsement of certain webhosts over others.

    The most important thing to notice is the requirement that “Each of your hosted WordPress installations must include the Jetpack and VaultPress plugins” – keep a very close eye on Jetpack, it is going to open the door to all sorts of interesting, revenue-generating things in the near future but, right now, the mandatory inclusion of VaultPress will allow Automattic to harvest some revenue directly from end-users. I would not be at all surprised to hear that, in some cases, the hosts get the VIP Support for Webhosts service for free for allowing this and possibly even get a cut of each VaultPress sale to one of their customers.

    Today’s announcement goes some way towards explaining yesterday’s mysteriously disappointing pricing for VaultPress Multisite – keeping the notional value of each and every VaultPress instance as high as possible will give Automattic more room to manoeuvre when negotiating with the webhosts.

    As for WP Engine’s pricing, $49 is not that much when compare it to the $40 per month that VaultPress Premium costs – people are clearly willing to pay quite a lot for peace-of-mind – but the hidden catch with all their packages is that you will run through your pageview cap long before anything else. Having a CDN and all the other fancy stuff is a bit of a joke if you are effectively limited to an average of 70 views per hour, including all the page refreshes that a lively comments discussion generates.

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  2. It appears to be all Automattic all the time around here these days. Where is the coverage of what is going on outside of Automattic with all the other commercial WordPress businesses? Or has this site become AutomatticTavern instead of WPTavern?

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  5. US$50 is a perfectly reasonable price. It’s not good whatsoever if you have even a moderately popular site as you will below through the page view cap lickity split. But if you just have a simple business site which you want to make sure runs smoothly, then US$50/month for WP Engine seems like a great option.

    I’d have no problem recommending it myself, but only for specific people who would make good use of it. For the average site owner, it would be hideously expensive since they’d need to pay a LOT more than US$50/month.

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  7. WPEngine’s pricing is reasonable. Their target audience are businesses using WordPress and full time bloggers. We pay much more than that per month with FireHost, which I believe is who WPEngine itself uses. Page.ly does too. FireHost is excellent. WordPress hosts built on top of FireHost give you the rock solid hosting of FireHost at a lower cost.

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  8. I have to disagree. If you only have a small business site, why not just pay $5 a month with a site like HostGator. I appreciate that automatic upgrading and back ups is a nice addition but I’d rather just get a reliable host that was cheaper and back it up using vaultpress. I honestly can’t see what they’re doing to justify that ridiculous price.

    Their next package is $199 a month and only allows 250,000 views and one multi-site. You can get your own dedicated server for that price.

    Seriously, maybe I’m missing something, maybe they do something that other hosts do; but I don’t feel they do anything to justify these prices.

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  9. @Andrea_R – Yes, definitely a good match for a fairly substantial proportion of site owners, $50 wouldn’t go too far if you had to hire WordPress expertise to iron out the sort of nit-picky problems that crop up from time to time and, yes, the support included with most webhosting doesn’t go too far.

    @Ryan Hellyer – Yeah, that pretty much hits the nail on the head: looks good for a relatively low-traffic site that needs above-average uptime and responsiveness but the jump from $49 to $199 is a bit of a trap, especially as the type of site owners who feel the need for special hand-holding would, presumably, find it difficult to move a suddenly active site elsewhere but, of course, most sites will never encounter that problem.

    Much as I love WordPress, I quite often come across situations in which WordPress is not strictly necessary and, if a business needs a simple, reliable Web presence, I often point them in the direction of SquareSpace, mainly because I know that the included support will include all aspects of the CMS, whereas mainstream hosts are reluctant to cover all aspects of WordPress.

    WordPress-specific services seem, thus far, to be a lot more expensive but I would certainly recommend Page.ly or WP Engine if the person asking was already comfortable with the WordPress dashboard, loved a particular WordPress theme or needed functionality that only a WordPress plugin could provide.

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  10. @Kevin Muldoon – don’t you think that matching $5 hosting with a $15 or $40 backup service is a bit lop-sided? Is that really all that different from spending $50 on a service that includes pretty much all the reassuring benefits of VaultPress?

    There is nothing wrong with $5 hosting from reasonably reputable companies as long as you are relaxed about the occasional glitch or performance issue but for the vast majority of business owners it is cheaper to simply pay $50 and not have to deal with those distractions. Predictability has value.

    As for getting a dedicated server, sure, you can do that for $199, you can even get a fully-loaded VPS for $100 that will have a thousand times more capacity (in terms of pageviews) than the $199 WP Engine account but you are massively underestimating and undervaluing the experience and expertise that you have but which the vast majority of customers do not.

    It all boils down to time: all of us here have spent thousands of hours mucking about with hosting and that’s cool, because we love this stuff, but the average person has no natural interest in it, would not know where to begin and, if he/she had a spare hour, would far prefer to spend it with the kids / the dog / the television.

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  11. @donnacha of WordSkill.com – Well the basic backup plan of vaultpress is $15. If you compare the $199 package with 250,000 with a $50 VPS with the $40 VaultPress premium service you would get a better deal.

    Are you suggesting that WP Engine will not have the occasional glitch or performance issue? I’ve used dozens of hosts over the last 12 years and price is never a guarantee of reliability or service.

    Also, I think it’s a disservice to hosting companies with reasonable price plans to assume that they don’t help with WordPress related issues. I had a dedicated server with WiredTree for years and they were great with WordPress. My current host, ServInt, know WordPress inside out and have managed to resolve all issues/problems I’ve had (even ones not related to hosting) within 20 minutes of raising a support ticket.

    I understand that people are willing to pay more for support – I myself am happy to pay more for good support and good service as I really don’t want to spend time solving problems. Though I still think that their hosting packages are very limiting for what you pay.

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  12. @Kevin Muldoon – totally agree on WiredTree, love that company, but my experience with ServInt was highly variable. The problem is that hosting is extremely cyclical, in every sense: companies overstaff when trying to build their reputation, then coast for years on that reputation; good staff move on, standards slip, the sense of mission fades, the installed base of clients starts to get milked.

    My point is not that WP Engine won’t have problems – as a relatively new company, they haven’t proved anything yet – but their positioning makes sense: they are explicitly focused upon WordPress hosting and are charging a sufficient amount that it is reasonable to presume that maintaining a knowledgeable staff will be possible.

    With $5 hosting, by contrast, it is not reasonable to assume that the staff will be knowledgeable. You can get lucky, sure, and I always appreciate my good fortune when I deal with someone who knows their stuff and is willing to go beyond the usual limits of their support policy, but I don’t expect it. WiredTree are patient, obliging guys but, ultimately, the written contract I have with them clearly defines the limits of what they have to do, I cannot base my business decisions upon the assumption that they will continue to exceed those limits, I certainly wouldn’t recommend that any of my clients rely upon that assumption.

    Suggesting that a busy, non-technical person get a $50 VPS, even a “fully-managed” one, is madness, just knowing what to order requires a certain amount of expertise. Hell, even knowing which VPS providers are currently good requires expertise or dozens of hours wasted soliciting advice on forums, and then you’ve got all the overhead of running a VPS, keeping it secure, etc. No, that’s a terrible idea for most regular human beings.

    My rule of thumb is that any working professional’s time is worth at least $100 per hour, probably more in most cases. I don’t advise that any consumer remain wilfully ignorant of the products and services they buy, natural curiosity should compel them to at least understand the basics, but we need more services like WP Engine and Page.ly and all the other services that will emerge to astonish us with their seemingly insane prices but which, ultimately, will empower their customers to get more done in the limited time available to them. We need evermore value-added services because this is how quality takes true root, how a market evolves upwards from bare considerations of cost and raw specifications, this is how good service and real knowledge start to get their just reward.

    Rejoice, equally, at the fact that Automattic are now charging Webhosts $250,000 per year for what is, effectively, partial access to one WordPress expert, because it is planting a flag which suggests that all this stuff we know, all this expertise we’ve accumulated over years of mucking around with WordPress, is truly valuable.

    I’ve always been a little reticent about charging my clients because, I guess, secretly I don’t feel like WordPress stuff is work, I don’t feel that it’s fair to charge $120 an hour for stuff that I enjoy talking about anyway but I came to realize that, actually, you can save people so much wasted time, effort, frustration and thousands of dollars by giving them the right information at the right time. My guilty conscience says “C’mon, they could easily learn all this stuff for themselves, it’s not Rocket Science” but, actually, it may as well be Rocket Science if the information they need right now and is not already in their heads.

    So, yeah, while I find WP Engine’s pageview limits a tad cynical and the jump to $199 alarming, I don’t have any argument against the principal that serious, specific expertise from WordPress guys like us is worth far more than the cost of silicon, metal and electricity.

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  13. @Julian Suvarez – Not really. There has been an onslaught of news and stories regarding Automattic as of late but it’s not as if I’m solely covering them and not anything else. It’s what’s in the news and I’ve chosen to share my thoughts on what I think is interesting or note worthy. Stick around for awhile, you’ll see the variety.

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  14. @donnacha of WordSkill.com – You make some very good points. Obviously my views are coming from someone who has used a lot of hosts and has some experience with WordPress. I do still feel what they offer in their plans is a bit stingy though I understand some businesses will pay anything for good support.

    I really do feel for anyone who pays two hundred bucks a month for a website with only 2,000 page views per day (page views, not visitors). In kind of curious as to what type of website can justify paying this amount with such low traffic. Their conversions must be high.

    Again, great comment. I’m replying via my phone so I can’t go into as much detail as I would like :)

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  15. @Kevin Muldoon – if there is one thing I’ve learned while supporting a very popular commercial plugin for WordPress used on over 250,000 sites it’s that there are a lot of very bad web hosts and in my experience you typically get what you paid for. There are exceptions, but in general the low cost hosts can end up costing you time and money with annoying issues.

    If you rely on WordPress as a vital part of your business and find $50 or even $100 a month too much for hosting than you may be doing something wrong.

    For non-business sites, hobby sites and early stage business sites the low cost hosts can do the job. But if you start getting a lot of traffic, require more server resources or require more reliable service for mission critical uptime and responsive support you’ll want to stay away from the cheap hosts.

    We’ve BlueHost and had a good experience, but eventually we hit a wall and our server resource needs could not be met. We switched to FireHost and went from paying next to nothing per month to a few hundred per month. But we wouldn’t do it any differently. FireHost is as rock solid as it gets. Which is why services such as WPEngine and Page.ly rely on them for their infrastructure.

    Depending on your needs those are the 3 hosts I’d recommend. Page.ly, WPEngine and FireHost.

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  16. So I’m doing something wrong because I don’t want to be ripped off for my hosting costs? That makes no sense ( for the record, my monthly hosting costs are more than $100 a month but I don’t think that’s relevant to whether I’m doing something right or wrong).

    I’m happy that you found a reliable hosting service but you need to realise that there are a lot of cheaper services that offer reliable hosting. And just don’t because they aren’t focusing solely on the WordPress market does not mean that some companies don’t have some very capable WP guys in their team.

    As I noted before, I’ve used dozens of hosting services over the years. I experienced terrible support and downtime from a hosting company that was twice as expensive than its competitors – a company that promoted its good brand name and reliability heavily.

    I’m not disputing wpengine or any of the companies you mentioned offer poor service but you need to recognise that their prices are high.

    High prices need to be justified in my opinion. I pay less than $10 a year for my domains. Some uk domain companies charge £30 a year and charge you extra for features that should be free. Since they are charging 5 times more – does that make them better? I know you are not suggesting this but I’m trying to illustrate my point. Suggesting someone is doing something wrong because they don’t want to be charged 3-4 times what competitors charge is ridiculous.

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  17. @Kevin Muldoon – You completely missed the point. I never said anyone using low cost hosting is doing something wrong. I said if you rely on WordPress for your business and think $50 or more is too much for hosting than you are doing something wrong. That doesn’t mean a low cost host won’t do the job. It means when the time comes to step up to more expensive hosting you balk because of the price… you are doing something wrong.

    Retread what I said rather than twisting my words and taking it as some sort of personal attack.

    I clearly stated we used BlueHost, as cheap as it comes, and it was great. BUT the time did come when the low cost solution was hurting our business and we had to step up and switch to a higher end solution.

    Low cost hosting will only take you so far if your site is truly successful.

    As for support with higher end hosts, as with anything there are good companies and there are bad companies. I know from personal experience that FireHost provides the highest quality hosting and support I’ve experienced and I’ve been doing this for 16 years. There is a reason why companies like WPEngine and Page.ly stake their success as hosting companies on partnering with FireHost. A bad partner could kill your business in that situation.

    Ultimately if you find $50 or $100 too much, who cares? You obviously aren’t their target audience. There are plenty of customers out there that will value what they offer and have no problem paying the premium. There are enough solutions available to keep all kinds of customers happy.

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  18. $50 for daily backups, fully managed, malware scans and core upgrades for clients is a GOOD price. Most sites I setup are on a MT DV at that price and it doesn’t come with all that. Most aren’t all WP but… just sayin. Grats to WP Engine guys… anybody have a number on that investment?

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  19. I’ve been eyeing the hosting plans at Wp Engine for some time now. I currently run my WordPress installation (single site) on a dedicated machine with a rackspace CDN, and Super Cache. Things are running just fine, but I am interested if things can be faster and more smoothly run with WP-Engine.

    I was also looking at WordPress.com VIP hosting but I can’t afford their $2,500/mth price tag.

    I’m also a Vaultpress user so having the Automattic name on WP-Engine sounds very good to me.

    Do you think I should just stick with my current hosting or do you think WP Engine would be a better hosting? I have about 330,000 monthly pageviews at the moment and so I’ll be over the $199/mth price.

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  20. @Carl Hancock – Sorry if it came across that I was trying to twist your words. That’s not what I’m trying to do.

    The thing is, millions of people rely on WordPress for their business. I think very few businesses will actually be paying $50 a month as the page view limit is so low. The majority of businesses will be paying at least $199 a month to use their service.

    I’ve had my websites hacked in the past and had databases corrupted too. For 5 or 6 years I had my own dedicated server which cost me around $300 a month. So I know first hand how important back ups are and protecting your website against malware etc.

    Even small blogs and websites will generate more than 50,000 page views and be charged $199 per month. I’d say that most websites between 50K and 250K page views per month should be considered small-medium (certainly those around 50k-100k page views). For those websites, $199 can be a big expense, particularly if their website has yet to bring in income.

    I appreciate that these services are targeting those who can afford it i.e. ecommerce websites who turn a big profit, business websites that are for clients etc. And many people who run these types of websites aren’t that experienced using WordPress.

    Perhaps the best way to look at WP Engine is that the price can be broken down as 10% hosting costs, 30% back up costs and 60% management/support costs.

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  23. Disclaimer: I am a founder at WP Engine, but I am no longer with the company. I still advise and am a shareholder, but I am not involved in day to day operations.

    From the first day of business at WP Engine, we knew we were not for everyone. Most average bloggers and businesses will do fine with lower cost solutions. They were never our target audience, although WP Engine enjoys moderate success even among this demographic.

    Our target was the individual blogger that has primary interest in the health, wellness and speed of their WordPress blogs, businesses and VIP customers who did massive traffic on a daily, weekly, monthly basis and found their sites were “too big to fail”.

    The recent price increase from $49 to $99 and $99 to $199 reflects that reality that significantly-sized customers will pay premium prices to ensure their WordPress site is safe and sound and in good hands.

    I’m excited for my colleagues at WP Engine who are continuing to build a superior product and are making strategically notable decisions like taking Automattic investment money, as well as others like Silverton Partners and Eric Ries, to name a few.

    Thanks for the writeup, Jeffro…

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  24. @Kevin Muldoon – I agree; that’s a steep price. I use Host Gator’s business hosting for ALL of my WordPress sites, get more than decent traffic, and host a WordPress blog-farm on the same plan, ALL for $14.95 a month, and my sites’ up-time has been 100% since I bought this plan over at Host Gator over year ago. I don’t knock on wood, but I WILL stick with $14.95 for now.

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  25. (This is Jason, founder of WP Engine)

    Great points all around!

    One argument is that “70 requests/hour” is incorrect — you’re assuming even traffic distribution which is not the case.

    Also, the fact is we’re not nazi’s about the limits. If you burst for one month due to big press, that’s OK. If it becomes a pattern, then it’s time to move up, but it sounds like you’d agree that moving up the tiers for a site that gets e.g. 200,000 pv/mo is also pretty reasonable for all the stuff we provide.

    Also we know first-hand that a $200/mo VPS machine does not have “a thousand times the capacity of the $199/mo account.” We have customers who actually do have a thousand times that traffic, and they will attest that that’s just not true.

    As for folks like Penina who spend $14.95/mo with lots of sites with lots of traffic and never had a problem — that’s fine! It’s absolutely true that not everyone ought to pay $49/mo or $199/mo for WordPress hosting.

    But for every one of our customers (which as you point out is quite a bit), they used to have $14.95/mo hosting or in some cases thousands/month, and all found it lacking for themselves, and found that we’re a better choice.

    I think it’s great that there’s tons of choices for WordPress hosting, and I hope people simply consider WP Engine as a good choice for a CERTAIN type of site and site-owner, and use our competitors when they are in fact the better choice.

    I would think Automattic — and Matt in particular — would agree!

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