Over the past decade, I've bought and sold many millions worth of online ads. When I ran ISPcheck, I had no real answer for prospective advertisers who wanted to know what results my customers were able to achieve. And when I became responsible for RackShack/EV1's ad buys, I found that there was no easy way to measure ROI.

All I wanted to know at the time was how many visitors from TopHosts versus TheWHIR signed up. But as I've subsequently learned from Ted Smith at Peer 1, I should have been tracking customers throughout their lifecycle. If my cost per sale from Site A is 20% less than Site B, but the average account gets canceled 50% sooner, B would be a better long term investment.

A couple of weeks ago I convinced Ben Gabler at HostNine to install StatCounter, the better to look up new customers and find out where they came from, and which parts of HostNine's website they visited before deciding to sign up. (I've also used Clicktracks and Google Analytics, which provide aggregated data on visitor behavior, but don't allow you to drill down to each visitor's click path.) It just occur to me that it'd be very cool if this functionality were built into ModernBill.

Imagine being able to generate sales reports that tabulate order amounts against referring sources? Or pinpoint content on your site that's most-viewed by your most profitable new customers? Better yet, what if you could instantly compute the lifetime ROI from those $20 Google Adwords bids? Wouldn't you like to know if customers who clicked on your "cPanel hosting" ad stick around 3x longer than those who came through "cheap hosting"?

HostNine already gives all of its resellers free ModernBill licenses, and being able to automate signup/provisioning is awesome. But what if every $19.95 hosting plan came with a business intelligence system that delivers up-to-the-minute knowledge on what website copy and ad venues work? Wouldn't that be something?

AND, what if ModernBill could collect and publish aggregate, industry-wide data on how profitable TopHost-referred customers are, relative to those who came through TheWHIR? Having been on both sides of the table, I think that would really help both ad salespeople and media buyers.

I read about this on Bert Amijo's blog. 3Tera CEO Vlad Miloushev did the math:

1. Google's infrastructure consists of 500,000 to 1 million servers.

2. Google's Q4, 2006 revenue was $3.2 billion. On an annualized basis, that's $12.8 billion.

If you divide #2 by #1, you'd get $12,800 to $25,600 of revenue per server. If you take the average and divide the amount by 12, you'd end up with $1,422/month in sales for each server. Google spends about 10% of its revenue on operations, which equals $142 per server.

As a point of reference, let's consider HostGator's announcement that it will expand its presence at The Planet. HostGator currently leases 1,700 servers, which are home to 500,000 websites. That's 294 sites per server. If HostGator collected as little as $4.84 from each site owner, it'd generate more revenue per server than Google!

HostGator's cheapest service plan costs $6.95/month, but it allows customers paying $9.95 or more to host multiple sites. Which most - including HostGator's 10,000 resellers - do. So Brent doesn't have Larry and Sergey beat. Yet. But while I was doing the calculations above, I remembered a conversation with Lenkov from SiteKreator. Thanks to some kind of caching magic (which ISP-Planet discusses in this article), Lenkov's software can support up to 30,000 simple websites on a two CPU machine.

Let's say Brent springs for a quad core Clovertown from The Planet, hosts only 15,000 websites, and charges each site owner $1/month. This would put him ahead of Google in terms of both revenue/hosting expense ratio, and sales per server.

ISP-Planet says SiteKreator can be licensed for an "unpublished fee". I'll have to ask Lenkov about that...

Liam says this week's most important trend is web hosting providers' continued expansion of data center footprints. The strong demand for hosting facilities seems like a good sign. At the same time, there are a number of outside-world developments that folks in the hosting business ought to keep an eye on.

1. On Wednesday, in addition to officially releasing RHEL5, Red Hat announced that it will soon launch an open source marketplace called Red Hat Exchange (RHX). As Business Week reports, Red Hat will guarantee the compatibility of RHX products with its platform AND provide tech support for each and every 3rd party product on the exchange. In addition, RHX will allow end users to submit ratings, read reviews and compare notes.

2. Later that afternoon, Microsoft said it will buy Tellme Networks. The Associated Press thinks the deal is worth $800 million to $1 billion.

3. Less than a day later, Cisco announced that it has agreed to acquire WebEx for $3.2 billion (or $2.9 billion, if you deduct WebEx's $300 million cash balance).

4. And last but not least Google sort of confirmed that it's working on a mobile phone.

It's a Wal-Mart-ized web; every Big Co wants to assemble a broader range of more seamlessly integrated products for a wider and better networked audience. This leaves less and less of a market for old school vendors who sell standalone widgets to isolated prospects.

For instance, consider 1&1's recent survey of 765 small business owners. Andreas says 100% of the respondents agree that the absence of a company website is bad for sales, but there's much more to these customers' operations beyond setting up a web presence. Might they not benefit from Zoho or ThinkFree powered productivity apps? SharePoint based collaboration? CRM?

More importantly, Andreas counts "hundreds of thousands of US small businesses" among his customers. As such, one super valuable feature that he's uniquely positioned to deliver is a 1&1 social network through which customers can connect with potential vendors, partners and buyers. I feel like 1&1 is really missing out by amassing a sizable community without leveraging it for its members' benefit.

As SWSoft CEO Serguei Beloussov likes to point out, 1&1 and its competitors have sold tens of millions of "web hosting 1.0" accounts, which collectively generate billions in annual revenue. He's absolutely right - but as you see above, the world's not standing still...

Dave Young from Joyent recently blogged about Twitter's use of Joyent Accelerators. Accelerators are Solaris Containers on Sun Fire X4100s with Sun Fire X4500s (also known as "Thumpers") for storage. Joyent promises on-demand, no-leash computing and offers virtual servers for as little as $45/month (includes 256 MB RAM, 5 GB storage, 15 GB bandwidth). It sounds pretty cool - and check out the video of Dave and Jason on Sun's website!

The problem is, after reading Dave's post, I think of him every time Twitter is down. Which, as many of his readers pointed out, happens often. Dave says us complainers are missing the point. Twitter is growing like crazy! It serves 4,000+ requests per second! That's a lot - and Joyent helped get them there! Unfortunately (or fortunately?), Twitter users' demand seems to exceed its already-substantial capacity.

If I were Dave, I'd move Twitter to as many XXL Accelerator Sparcs as it takes. Having come a long way just doesn't make good enough PR fodder when you've got John Edwards live blogging from the campaign trail ("About to make remarks at the Int'l Assoc. of Firefighters. Then remarks at the Boilermakers conference.").

A few months ago, I was telling Steve Kahan over at The Planet that he ought to turn a couple of his sales reps into venture capitalists, of sorts. These folks would scan the customer database for major brand names as well as up and coming influencers. They'd proactively monitor these VIPs' infrastructure and offer free scalability advice and migration assistance. They'd set up an invitation-only beta program and strong arm Dell into providing test units of its latest gear. They'd research these customers' industries and make introductions if they come across people in similar markets...

More recently, RedMonk analyst James Governor suggested something much more radical. Forget that beta program; how about long-term loans for future movers and shakers? And instead of my idea of creating case studies out of The Planet's great working relationships with today's news-makers, take a great leap forward to the open source hardware business model. Put your tools in the hands of tomorrow's innovators. You need to do this quickly, because you're competing with Jeff Barr. In Joyent's case, I have no doubt that last part is true...

PS - It just occurred to me that SoftLayer, in particular, might have much to gain from being a patron to soon-to-be influencers. Softlayer announced a private meet me room a few weeks ago, where developers of different SoftLayer-hosted applications can interconnect without incurring bandwidth charges. So if someone's created a community that many others are eager to extend and/or leverage, wouldn't it be worthwhile for SoftLayer to make itself that community's home base?

PPS - Hosted Solutions, too! It's cool that they're spearheading the Carolina SaaS User Group, but I think what would really enhance their appeal is if they hosted the most-mash-upped apps.

I learned about the IDC storage paradox on Zoli Erdos' blog. Zoli mentions this Associated Press article, which cites IDC's estimate that "the world had 185 exabytes of storage available last year and will have 601 exabytes in 2010. But the amount of stuff generated is expected to jump from 161 exabytes last year to 988 exabytes in 2010".

Even more alarmingly, Dan Farber over at ZDNet reports that according to IBM, "the world's information base will be doubling in size every 11 hours" by 2010. Does this mean that on Jan 1, 2011, our 988 exabytes of data will double to 1,976 exabytes by 11am, and 3,952 exabytes by 10pm?

Fortunately, we don't need permanent storage for all the data we generate. For instance, spam accounted for just 8% of all emails in 2001 (said CNet); its volume rose to 36% by 2002 and 66% by 2004 (MSNBC), and is expected to exceed 90% by the end of this year (IT News). That's a huge amount of data that isn't being saved.

Still, Rich D'Ambrise from Maxell says he expects significant growth in data archiving requirements: in 2007, we will back up 75% more data than we did in 2006. But unlike IDC analyst John Gantz, he's not concerned that we'll run out of space. The storage industry is not standing still. Maxell, for instance, is beta testing 300 GB holographic disks that are no bigger than a DVD, but offer 63x more capacity. 800 GB second generation disks should be on the market by next year, and a 1.6 TB version is planned for 2010. And let's not forget stacked volumetric optical discs (SVOD); each 92-micrometer layer stores up to 9.4 GB. Available storage capacity will absolutely keep up with demand; no question about that!

The real issue is, will we store our zettabytes of data on- or offline? Rich is betting on removable media; he'd rather have mission critical data in his own possession than depend on any service provider. Zoli, on the other hand, says online is more efficient. By sharing/linking to files, we won't each need space for our own copies of the same content. Sun CEO Jonathan Schwartz says offline storage is greener ("when data's at rest, it consumes no electricity") - and easier to transport on a large scale. (As the New Yorker points out, if you made tiny chariots with DVD wheels and hitched them to snails, you'd get faster data transfer speeds than DSL.)

So, what's this got to do with web hosting? For one, you should probably monitor your oversold disk space closely. At the moment, I'm sure hardly any of GoDaddy's $7 hosting customers are using their entire 100 GB quota. But if you consider Rich's 75% growth projection, the number of customers that same 100 GB is allocated to may have to come down.

PS - Here's a GigaOM post on a 10 more fun storage facts.