Cloud computing, virtualization, companies going public in web hosting, new server technologies like Windows Server 2008 – these are just a few of the many changes that are on the web hosting horizon. As we prepare to exit the year 2008 and enter the year 2009, The Hosting News tapped into a few experts on web hosting to get a sense of what is to come in the New Year. Here is what they had to say.
Daniel Foster is the co-founder of hosting company 34SP.com. According to the company’s website, ”34SP.com was established in the year 2000. The company was founded with the aim of bridging the gap between sophisticated hosting solutions and affordable prices. Leveraging the power and stability of open source software with a commitment to ethical business practices 34SP.com has become synonymous with reliability, professionalism and value for money. Growth of reputation has been matched with an expanding range of services, seeing 34SP.com become a fully fledged service provider. A diverse range of clients now rely on 34SP.com to support their business operations, with available services ranging from dedicated server hosting to colocation.”
Mr. Foster forecast the following for 2009, ”In 2009, I’m sure there will be more buzz about cloud and utility computing. I’m also sure that traditional hosting companies which are good at what they do will continue to thrive. Not everyone has the technical expertise to manage a complex hosting solution so hosts that can provide solutions relevant to their customers should continue to see growth. At 34SP.com, we’re expecting to see our growth continue in 2009, and to be able to offer even better service and solutions to our existing and new customers alike.”
Frank Stiff is President of Cheval Capital. He has been an investment banker for over 20 years, during which he has assisted companies including Nextel Communications, NTT/Verio, Fidelity Capital/Colt Telecommunications, and Rackspace Managed Hosting with mergers and acquisitions, equity and debt financing, and other financial services.
Here is what Mr. Stiff prognosticates for the New Year, ”We expect the news to be worse in 2009 that it was in 2008 but not nearly as bad as it will be in many other industries. Most web hosting companies have the advantages of good margins and low debt levels. These factors should protect the industry from large scale bankruptcies and forced sales. We believe that the recession will affect most hosters, generally by reducing the rate of new customer additions while increasing the rate of customer losses. It is also likely that financing of all kinds will continue to be more difficult to obtain.”
Mr. Stiff added, ”Our business is driven by the overall transaction market and today our clients continue to be aggressive buyers of hosting companies. We see that buying demand continuing for the short term. However, as industry economic conditions worsen, the transaction market will likely slow down, although with so many hosting companies out there, we expect that there will likely always be some buyers and sellers. We are also hopeful that acquisition multiples remain stable.”
William Toll works within the marketing and product management functions for managed dedicated hosting company, NaviSite. Mr. Toll weighed in with his thoughts for website hosting in 2009, ”The traditional web hosting industry will transform significantly in 2009, primarily due to the economic conditions that will be a factor in 2009. Many of the smaller web hosting providers will be in jeopardy as they try to continue their operations in this difficult and competitive market. I am sensing that there is a flight to quality Ã¢â‚¬â€œ 2008 was an important year where businesses of all sizes now realize the significant importance of exposure on the Web. Websites have moved on from being just information and or transactional, but the foundation of a strategy to be found. Downtime, slow response, blocked IPs, poor support, billing issues are driving businesses of all sizes to reconsider their hosting provider.
Web and Internet based services and applications are now key components to the back office processes at a growing percentage of companies. File servers, mail servers, business process applications, are all moving out of the local office’s ‘server room’ to the data center. With quality, flexible managed dedicated servers and virtual dedicated servers, businesses are able to ensure their ability to increase productivity by reducing downtime and ensure business continuity by having their applications and services hosted in a professional data center. Banks, insurance companies and CEOs and owners are making the call that the local installation of IT equipment in the office is more of a risk than they are willing to continue with.
NaviSite’s dedicated hosting business will benefit significantly from several trends in 2009. First, we expect an increased interest from small businesses looking for a quality full service managed hosting provider to move to deploy their services and applications with. Small, financially questionable providers are now seen as a risk Ã¢â‚¬â€œ while companies with significant experience with the enterprise that provide an affordable and accessible service for the small business will win new business.
The interest in hosted applications such as SaaS, has not only crossed over to the mainstream, but is now a preferable model for ‘utility’ needs like email, office collaboration and information sharing and CRM. The increasing popularity of hosted Exchange is the best example. With hosted Exchange businesses of all sizes can stop worrying about SPAM, increasing needs for storage and archiving and muitiple mobile platforms for BlackBerry, iPhone, Windows Mobile and more.”
This content was written by Derek Vaughan exclusively for The Hosting News.