Market Intelligence Briefings

The hosting industry's reliance on blended contract churn is often masking portfolio deterioration. In-house analytics teams proudly separate first-year churn from repeat churn, but this merely measures when a customer stops paying. It ignores how and why they leave.

To assess the true valuation and health of a digital asset portfolio, churn must be dissected into:

Migration Churn (Addressable): This represents competitive loss. The customer is actively moving their digital asset to a rival for better pricing, features, or support. A concentrated migration corridor here will tell the hoster exactly where they are falling short of customer expectations.

Natural Churn (Structural): The domain is simply not renewing at all. Distressed portfolios carry up to 70% natural churn, signalling an aging customer base, low-quality acquisition cohorts, or deep renewal friction. In most cases, this churn is non-addressable. The hoster has to spend top dollar in CAC to replace vanishing assets, instead.

ShareShift delivers granular insights on both migration and natural churn every week for hundreds of providers across 19 countries. For this post, we took last week's churn patterns across Germany, Sweden, Spain, UK and Poland, and extrapolated to an annual churn rate. You'll see clear regional differences both in natural churn rate, and share of migratory activity.

When top-line domain growth flatlines, how do you value a hosting business? We propose a data-driven valuation framework that goes beyond revenue multiples to assess portfolio quality, churn resilience, service attach rates, and infrastructure modernity. Essential reading for PE investors and M&A advisors in the sector.