The Parallels Summit 2010 in Miami was a great event – good content, conversations and all of the SMB hosting industry leaders were in attendance. In the 11+ years, I have been in the hosted infrastructure business, this is only the second time when all of the indicators are moving in the right direction. Back in the late 1990’s you could not – NOT be successful as a hoster. Now, in 2010 – all of the hosting providers that are succeeding are transitioning to a strategy of higher margin – applications and application management AND at the same time launching the next generation of higher margin cloud infrastructure services. We are an industry that is going through a rapid transformation.
John Zanni’s keynote: “The New Face of Hosting” was a great overview of the state of the market, end-customer perception of a hosters role and how key decisions and people at several hosting companies are succeeding during this transition. John started by presenting some research that demonstrates that the market is growing. Not only are agile small businesses increasing their revenue during the Great Recession but they are waking up to the fact that IT is not a core function does not need to be completely on-site. A recent survey by Microsoft found that 65% of SMBs are already using Software as a Service (SaaS). SMBs that are not using SaaS saw a 44% increase in their consideration of outsourcing applications with a total of 73%.
Now many SMBs are exploring web-based services beyond simply using a vendor for sales lead management or online banking services to increase employee productivity and cut costs. These are the applications which naturally fall into the realm of the hoster. From hosted email, to wireless communications enablement, to online collaboration services for business users. The Microsoft solutions in these areas are perfect for helping businesses achieve these goals. Hosted Exchange, Wireless Access to Enterprise – Class Email and Hosted SharePoint are easy services for hosting companies to get involved in. Whether deployed in the hoster data center or re-sold through a reseller, hosters that offer these applications are deepening their relationship with their customer. John Zanni said that some hosters are doing both – a combination or reselling hosted Microsoft Communication services and also hosting it themselves.
John’s central theme of “Key Value Add, Provide Services that Interact, Leverage Existing Investments, Scale up and down and Platform selection” are the key tenants for any successful hosting provider. Today’s model is far removed from the past – offering just servers or just Web hosting is not sustainable. Relationships matter. Businesses want solutions not technology. Hosting providers that are growing today are considered by their resellers or end-customers as business solutions providers – not technology providers. John encouraged the audience to think about how their offerings could seamlessly work together as a platform to enable the ultimate offering. The magic of the Microsoft platform is the seamless offering – Websites and Web Applications which interact with Hosted services like Exchange, SharePoint and the Hosted Dynamics suites. With integrated offerings – focused on solving business issues, a reseller or hosting provider will quickly be considered a “trusted advisor” and not a vendor with a monthly bill.
In summary, John said: “Help your customer’s move to the cloud in a way that makes them comfortable” and “….focus on providing value to your customer”. I think the overall theme of the keynote was: it’s not a technology sell – it’s a about helping the reseller or end-customer aligning their business processes and technology platforms to build profit through operational efficiency. Therefore, hosting providers that make this transition will grow rapidly as the economic conditions improve.