Lately, I’ve been thinking about highest and best use as it would apply to hosted services. I don’t think it’s any surprise or news to anyone that dedicated hosting may, over time, begin to shrink as grids and VPS become more popular and robust. With this in mind, the highest and best use for a company who has a dedicated offering would be to begin the movement of its dedicated hosts away from the physical server in the rack to a virtualized instance that runs across a grid that is shared by others. This allows the dedicated host to maximize the square footage of their datacenter, the power, and other resources, while still presenting that semblance of “dedicated” to the end customer. But, can we squeeze more density into that highest and best use? For many companies, the marketing spin around grid is a SaaS platform where you don’t really have to create a multi-tenant application; you can simply create a virtualized instance per tenant. Traditionally, you would have been buying a physical piece of equipment per customer, but now you can go with the grid and spread your customers across shared hardware. In my opinion, this is half the equation. The other half is to build a platform that sits atop a grid that provides on-demand SaaS capabilities, i.e. an ISV can publish their application into a shared virtualized instance. This maximizes the savings gained from moving away from a physical server per server role, but also maximizes that instance as being shared among multiple customers. Over time, hosts could decide to move their resources away from their traditional offerings into working on these new, next generation SaaS platforms.
What do you think?
