HostReview.com Web Hosting Interviews

An Interview with
Web Hosting Roundtable - Industry Trends 2005: Guy Yalif, David Chao,Thomas Vollrath, Ivan Vachovsky, Lance Crosby, Curtis Curtis, Jeremy Sabil, Bevan Erickson, Kurt Daniel, Jay Adelson, Manny Medina, and Bob Leffler,

By Milena Sotirova
Editor DevStart, Inc.

February 09, 2005

1. Please can you tell us some words about you and your position in the company?
2. Where do you see the Industry growth in this starting year? What are the trends you are expecting to see growing in the next 12 months?
3. Discuss your vision for this year in regard to security. Do you see more challenges in this aspect for the Web Hosting Industry?
4. Where do you see the challenges before your company and how do you see overcoming the obstacles going along with the growth?
5. What will be the major acquisition you can predict for this year?
6. If you can summarize Industry 2005 in one sentence, what it will be?

2. Where do you see the Industry growth in this starting year? What are the trends you are expecting to see growing in the next 12 months?

Guy Yalif:
There is clearly ongoing, accelerated adoption of shared web hosting by small businesses.� I believe there is a continuing need to offer services that take the complexity out of hosting, enabling customers to easily create professional looking web sites.� We work to help customers focus on their business and spend less time and energy on their web hosting technology.�

Additionally, I believe there is a need to focus on reliability and creation of a professional look is crucial.� Hosting providers who take the pain out of creating a professional site and who take the worry out of a site being available for visitors will be rewarded with growth.�

Lastly, helping small businesses better and more effectively serve their existing customers and market to new customers is becoming increasingly important and something many customers already - or soon will - expect from their service providers.

David Chao:
I expect to see a strong movement from peak performance to price performance, or more importantly, the total cost of computing. The Internet boom was focused on new features and functionality. The market adjusted in the years following the boom, and now we see that functionality is still important, but with a focus on reducing the total cost of computing. As a result, businesses that can focus on providing cost effective, highly valuable services will be successful. Consequently, hosting providers will have to move to a more virtualized service where single appliances can serve multiple customers.

Also, as we shift toward more on-demand and utility computing, businesses will have to have a better understanding of their computing demands in order to be able to plan the supply. With the problems we saw with major retail sites over the holiday season, it's clear that businesses are going to need highly scalable platforms during peak demand. So, supply must be as fluid as demand.

In 2005, one thing is for sure: we can all expect to see small businesses begin to reap the benefits of complex managed services that larger enterprises have been enjoying for years. The industry is now beginning to provide the managed services that small businesses are in desperate need of - such as managed storage and security services - on a much smaller, much more affordable scale. Verio has had a strong focus on the SMB market for years with Virtual Private Servers, Managed Private Servers and our shared hosting offerings. But even we are stepping up our focus on this market by enhancing our product features to include the more complex services that SMBs need.

Ivan Vachovsky:
Well, one is for sure - businesses and people need web sites to communicate with customers, prospects, friends etc.� I think that we have served the technical crowd already. Those who know how to setup and build a web site were among our first customers. The time has come now for the mainstream business, where our typical customer wouldn't have a clue what is HTML, PHP, SQL etc. We have to be prepared to serve this type of customer now.� It is a huge market and the web hosting companies, which manage to serve it will experience dramatic growth.

Curtis Curtis:
I see greater consolidation in the coming year with many of the smaller, boutique type hosting companies being sold to major players. I also see many of the major players expanding their footprint to offer customers greater choice as to where their server is located. I see strong growth in the game server industry as well as an upsurge in companies outsourcing their IT requirements to hosting companies.

As for a major trend - White label hosting will be the trend in 2005.

Jeremy Sabil:
The industry is still maturing; there will still be tremendous growth from the end user e-mail marketing perspective.

But a more sophisticated user base will be tapped and trained.

Bevan Erickson:
I see the same trends at the start of this year continuing beyond the next 12 months. The flood of new hosting companies entering the market has driven prices down to a virtual floor, and closed margins. Successful hosting companies will need to look to include value-added services to their offerings (without raising prices) in an effort to stand out in the crowd. Despite the fact that consumers will continue to see Price, Space and Bandwidth as key differentiators, they are becoming much more savvy, and now expect full-featured hosting services.

Kurt Daniel:
The Web hosting industry experienced strong growth in 2004 and will continue to expand through 2005. Our growth is one indication of the industry's growth and a reflection of our broad customer base's success - SWsoft has more than doubled its worldwide revenues in 2004 and anticipates similar growth this year as well. A few trends I expect to see growing are more multi-country hosting providers, increased application and gaming hosting, further concentration among leading hosting providers and vendors that serve them, and more standardization of hardware and software platforms and solutions.

Thomas Vollrath:
Security, Storage and VOIP. More and more users will get access to high speed connectivity and this, in turn, will impact the entire applications environment because the user will rely less on locally-stored information.

Jay Adelson:
2005 will show the continuing the growth of last year. Equinix projects a 25% revenue growth in 2005 ($163M to $205M).

Sitting at the hub of the Internet, our vantage point has shown us a strong trend of enterprises and content companies seeking interconnection/exchange services of greater complexity, such as multi-homing, peering, and paid peering. In addition, high power density deployments are becoming the standard due to the proliferation of blade servers and high-density 1U rackmount devices.

Application trends we see being installed include VoIP, e-commerce, broadband to consumer (VOD, streaming downloads, etc.) and a large amount of web service standard-based applications. Both J2EE and .NET deployments are fierce on the enterprise side, running neck and neck regardless of the hardware platform.

Lance Crosby:
I see continued growth in the small to medium enterprise business (SME) as the market continues to outsource IT infrastructure. As an industry consolidator of technologies, our purchasing power and economies of scale allow SME companies to outsource their IT needs at a fraction of the cost. Our goal is to be the new business utility and allow companies to focus on their primary concern....running their business.

I believe the upcoming trends for 2004 will be heightened security needs, servers on demand, grid computing, and overall lower cost and higher value in hosted solutions.

Manny Medina:
Terremark sees great potential in Latin America and expects the technology industry in this region to continue to grow at an increased pace.

Bob Leffler:
The percentage of customers that choose Pathlore to host their LMS has increased every year. This year will be no exception. Our first two quarters of our fiscal year (which begins Oct. 1) has generated more new clients than all of last year combined. I see this trend continuing, since more IT organizations are constrained by a lack of resources. And these IT organizations will continue to outsource applications such as training and HR.