I think it's actually being slowly eroded away from different angles. It's niche providers. WordPress being a huge niche, I've been watching it grow from everyone being in the ~$20-30/month range to full on enterprise grade hosting (http://reviewsignal.com/blog/2016/09/14/500month-enterprise-...).
But there's at least a couple dozen providers now who have built WP specific infrastructure at all sorts of price tiers for consumers.
You've also got your SquareSpace/Wix/etc. Shopify. Traditional shared hosting is becoming less necessary in my mind for a lot of use cases because companies are specializing in areas where you would normally say 'just get a shared hosting plan.'
The biggest problem though to completely get rid of the shared hosting space is price. Digital Ocean works because the lack of customer service. Shared hosting needs to have a lot more customer service (or you get EIG). But at the $5/month price point, the economics of it are terrible. The way to get around it is specializing, reducing complexity and issues, which is exactly what I see happening.
Growth is slowing, but that market is still growing.
I would think there's room for some middle ground, like DO, but with more sophisticated self service tools to deploy popular software, install OS patches, and so on. Tools that work for non technical people.
Yes, at a higher level, dumbed down installers with reasonable default settings. Deploying whatever applications are popular at shared hosts, like Wordpress, Drupal, Magento, BBS software, and so forth.
And providing some equivalent to Cpanel for things like OS patches, domain management, SSL certificate management, automated backups, web analytics, file manager, etc. Cpanel's license costs are pretty high...they charge per customer / per month, and so it sets a minimum bar for what you can charge.
If you incorporated additional functionality, you could capture more of the market. What wix.com does, for example.
But there's at least a couple dozen providers now who have built WP specific infrastructure at all sorts of price tiers for consumers.
You've also got your SquareSpace/Wix/etc. Shopify. Traditional shared hosting is becoming less necessary in my mind for a lot of use cases because companies are specializing in areas where you would normally say 'just get a shared hosting plan.'
The biggest problem though to completely get rid of the shared hosting space is price. Digital Ocean works because the lack of customer service. Shared hosting needs to have a lot more customer service (or you get EIG). But at the $5/month price point, the economics of it are terrible. The way to get around it is specializing, reducing complexity and issues, which is exactly what I see happening.