UPDATED 12:05 EDT / JULY 21 2017

CLOUD

Amid fierce competition, GoDaddy pulls the plug on its cloud servers

A little over a year after entering the business of providing computing and storage via the cloud, GoDaddy Inc. appears to have thrown in the towel.

The hosting giant notified customers in an email publicized on Thursday that its Cloud Server instances will be discontinued as part of a gradual shutdown set to take place over the coming months.

GoDaddy said the first offering on the chopping block is the catalog of preconfigured apps that it has been offering for the service in collaboration with Bitrock Inc., better known as Bitnami. The collection, which includes some 140 popular software images that can be deployed without having to manually set them up in a virtual machine, will go offline on Nov. 15.

GoDaddy plans to follow up the move by pulling the plug on all remaining Cloud Servers a month and a half later. The shutdown likely has something to do with Lightsail, the virtual private server platform that Amazon Web Services Inc. introduced not long after after the launch of Cloud Servers.

Jeff Bezos’ firm developed the offering to court the same group as GoDaddy, namely developers working on small web projects that don’t require too many computational resources. Not only is their pricing similar but AWS has also partnered with Bitnami to provide pre-packaged applications. Competing with the cloud giant likely would have been difficult for GoDaddy in the long run, especially given that there are other players as well.

As a result, exiting the market may turn out to be a wise decision. But GoDaddy still needs to address the fact that a growing number of businesses are moving from traditional website hosting services to AWS and other cloud platforms with more flexible pricing.

One of the ways the company hopes to address the trend is by offering various services for easing day-to-day operations. As part of the effort, GoDaddy picked up a maker of website security tools called Sucuri Inc. earlier this year and previously bought two startups that focused on simplifying WordPress administration.

The company’s biggest acquisition in recent memory was the $1.8 billion purchase of competitor Host Europe Group Ltd. last December. On Tuesday, GoDaddy offloaded the PlusServer managed hosting business it obtained through the deal  to British private equity firm BC Partners for $456 million. 

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