Hosting

Hosting is a new way of managing a companies computing needs and provides and alternative to in house IT management or complete outsourcing, both of which can be expensive and in some cases risky options. Hosting answers all the issues that these create by lowering costs, reducing capital expenditure and giving greater control and flexibility to a business

The hosting market is rapidly growing for several reasons; broadband technology is enabling remote users, availability of secure internet applications as demonstrated by online banking, the move from capital expenditure to operational expenditure and new markets are opening up as the concept of cloud computing and SaaS make on-premise software available as a hosted solution.

The estimated European total available market for hosting is forecast to be $4.9B in 2009 and in the UK alone there are approximately 400 hosting companies that require hardware and software to run their business.

Storage Hosting

Cloud Hosting

Cloud hosting is a pool of resource, either server or storage, which is scalable and often virtualised to offer service and support over the internet or secure dedicated links. In some cases it is also referred to as utility or grid computing, cloud hosting provides a management infrastructure for companies with large amounts of distributed data that require scalability and flexibility to deal with various market conditions at any point in time.

SaaS

Software as a Service (SaaS) can be described as hosted software solutions where a company will provide software services to a business allowing that business not to pay for owning the software package but just for using it. This process offers levels of service and flexibility that commercial software licensed products cannot compete with.

The main benefit to business is that while internally operated software requires a huge initial investment for installation and usually involves a level of complexity which demands extensive IT support, SaaS models allow the user to pay as they go without any of the hassles associated with installation or maintenance. All the user needs is Web access to have a range of sophisticated technologies at their fingertips.

Hosting company requirements

For any hosting business, as with all companies, margin is a key factor in profitability. There are a variety of issues they have to consider in order to balance the books between profitability and the service levels they need to offer to their customers. The two main issues they face are keeping infrastructure costs low whilst optimizing operational costs, not easy to do when you consider the main pain points they face in today’s world:

CAPEX to OPEX cost of hardware
Rising cost of power
Ensuring they have enough power to keep their data centres running
Actual cost of building data centres
Cost of managing data centres from floor space to people
Cost of managing data centres from day 1 before services can be billed
Time to billable services (As in time to market for hardware suppliers)

Things to consider

When selling in to hosting companies you will need to consider various factors outside just hardware costs, as we have seen there are various aspects of their business they have to consider. Service & support levels, rapid deployment of hardware, environmental considerations, resource management and knowledge of products that reduce cost and help develop their own growth are just some of the skills required in this market. Hardware is a requirement that enables them to sell their services but anyone who can deliver this with minimal overall cost and allow them to services and bill their customers quickly will be in a strong position.

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