There are so many things I like about FastServers, starting from its product packages. The lowest-cost SKU on its front page is a $198 Celeron 2.4. I can't think of many dedicated server providers who can match its ARPU.

Among the several thousand EV1 customers I came in direct contact with, folks who clamored for more support *FAR* out-numbered those who wished their hosting plans included more bandwidth. You'd never guess this is the case by looking at bandwidth allocation trends across the industry, but FastServer recognizes such preferences. The server above comes with just 1500 GB, but customers have access to 5 DEFCON service levels.

Some time ago, the CEO at a competitor of FastServers' shared his concern that customers were gravitating towards a handful of rock star data center techs and network engineers. He worried that this kind of dependence isn't scalable. Yesterday I got to spend some time with FastServers VP Sales and Marketing Aaron Phillips; he has a completely different take. When he asks customers for testimonials, many of them mention how much they enjoy working with specific employees. In addition, prospects often sign up because they like what they see on FastServers' staff profiles. (On a related note, check out Michael Cote's post on the value of leveraging non-executive employees' influence.)

FastServers also gives individual employees exposure through its blog and monthly newsletter - which Aaron publishes with *amazing* regularity. Over the past three years, the only month he missed was December 2005.

I think FastServers is awesome - especially since Aaron confirmed that another HostingCon party is in the works :) And I wish more hosting providers shared their openness and consistency in customer communications, not to mention their ability to steer clear of race-to-the-bottom commoditization.

Having bought from, sold to, published a magazine about and work within the web hosting industry, I used to think I understood what this market is all about. But over the past year, I've become increasingly aware that there's more to the big picture than what I'd seen.

It all started when I came across a Marketwatch article about Facebook's $550 million valuation; GoDaddy was worth only half as much. The comparison made me question the relevance of the age-old "bandwidth + disk space = monthly fee" equation. I wondered if launching a social network might enhance GoDaddy's IPO appeal. Shortly thereafter, I learned about 3tera and Amazon's S3/EC2. Dedicated servers began to seem obsolete.

More recently, thanks mostly to Martin MacLeod's BladeWatch, I've been wondering about the amount of Internet infrastructure expertise that resides beyond versus within the web hosting industry. Martin covers a lot of familiar-ish ground - yet he's writing about large enterprises in which the IT department acts as an internal hosting provider. Their responsibilities, I've noticed, aren't very different from ours.

Anyway, there IS a point to all this rambling. I get to be on a virtualization panel with Martin at Data Centres Europe (March 21-23 in London)! I'm very excited about that. The following week, as Liam heads over to Cologne for Intergenia's second annual Web Hosting Day, I'll be on my way to Vegas for AFCOM's Data Center World. I remember telling The Planet's Jeff Lowenberg last year that enterprise-oriented data center events could be a great place for web hosting providers to win outsourcing business. Now that seems terribly presumptuous. In fact, Jeff told me later on that he found Data Center World to be an excellent learning experience.

After Data Center Month, I'll be back in regular web hosting territory. I'm looking forward to SWSoft's Partner Summit (May 7-9 in Reston, VA), ISPCON (May 23-25 in Orlando) and HostingCon (July 23-25 in Chicago). And later in the year, I'm counting on Ismael to organize a second Office 2.0 Conference. If you scroll through last year's list of participants, you'll see a mix of enterprisey and Web 2.0-ish folks. And you'll notice that Joyent - a web hosting company! - was among the event's award winners. Which goes to show that the web hosting industry exists not in isolation, but belongs in a much broader web services ecosystem.

So, which of these events will you be going to?

I missed Doug Erwin's "7 reasons why web hosting is hot" session yesterday. If you were there, I'd love to hear from you - what did he say? What did you think??

Earlier in the day, though, I had a long conversation with Rurik Bradbury from Intermedia.Net about why he doesn't buy the hype. Everybody says the industry is in a great place. I, for one, have been dazzled by Rackspace's 59% growth last quarter. And Don Warnet recently mentioned that October was DataPipe's best month ever. (I *love* DataPipe's "operational empathy" tagline, BTW.)

But Rurik points out that web hosting is heading towards utility-land. Yes - ecommerce and SaaS and Web 2.0 and SOX/HIPAA compliance will continue to drive demand for data center space. Yes, Rackspace's Fanatical Support has been a winning formula. And yes, there's been lots of excitement surrounding grid computing. But let's fast forward to a point in time when web hosting reaches dial tone reliability. Once that day arrives, running a web hosting company won't be very different from running a power company.

The most important implication is, there will no longer be room for large numbers of small players. As a point of reference, you don't choose from a wide variety of electricity providers when you move to a new town. You just sign up with whomever the local utility happens to be.

In addition, there will be fewer opportunities for differentiation. Rurik has never called any power company, and I don't even know the name of my local utility. Fanatical Support doesn't apply in the electricity world, because the technology works too consistently

Last but not least, with no occasions for customer interaction, web hosting providers will become invisible to the average end user. Instead, application developers - such as YouTube's founders - will be the ones who drive innovation and build customer relationships. Continuing with the local utility analogy, do you give your power company much thought when you shop for new electronics? That, Rurik says, is why ideas people will have billion dollar cash out opportunities - and infrastructure people won't.

Rurik thinks Intermedia is in a relatively good position, because Hosted Exchange is more idea than infrastructure. On the other hand, the idea belongs not to web hosting providers, but to Microsoft.

So what now? We didn't come up with an answer. But right after our conversation, I ran into a guy who's getting ready to ditch the shared hosting model and release a bunch of hosted apps he's developed. He knows that the risk is much higher, but he's hoping his payoff will be as well. His business has been making good money, but to him, apparently, web hosting might not be hot enough.

I spent most of this afternoon walking around the exhibit hall. The three most talked-about products seem to be:

1. 3Tera's AppLogic Grid OS (disclaimer: I recently joined the company's advisory board)

2. Righteous Software's backup software (disclaimer: Founder and CEO David Wartell has been a long-time friend)

3. Cleversafe's dispersed storage solution (disclaimer: I haven't looked into Cleversafe at all, but John Martis from Hostway and Will Charnock from The Planet both said it's "just the kind of thing I'd be into".)

These solutions have two things in common.

First, the share the goal of making the web hosting world a safer place. 3tera eliminates downtime - whether unplanned hardware-failure-associated outages or scheduled maintenance for infrastructure upgrades. Righteous Software makes data loss obsolete with affordable, nearly-continuous incremental backups, even on open files. And Cleversafe offer dispersed storage across not one, not two, but 11 different locations.

Second, all three are software solutions. As British Telecom CTO Matt Bross puts it, we're in a software world; we've got to stop thinking hardware. Nicholas Carr is even more blunt; he says software kills hardware:

Consider the telephone answering machine. It began as a bulky analogue box running spools of tape. It turned into a small digital box, often incorporated into a phone. And finally it disappeared altogether, turning into pure software running out somewhere on a phone company's network. Once you bought an answering machine. Now you buy an answering service. And so it goes.

3tera CEO Vlad Miloushev said during his panel today that more than 80% of all servers in the world are maintained by in-house IT departments. This means the web hosting industry has enormous expansion potential, particularly since AFCOM's research shows that 50% of corporate data centers will become obsolete within the next 5 years. At the same time, increasing adoption of hosted versus desktop software will drive just about every software developer in the world into the hosting market.

We'll get all that business, and we'll service it securely, reliably and seamlessly - with innovative software solutions rather than bigger and costlier gear. That's what I see as the next big thing.

PS - There was actually a 4th thing that I found super impressive. Ivaylo Lenkov from SiteKreator mentioned quite casually that he's hosting 20,000 to 30,000 sites per Dual Xeon server. Wow - now that's a profitable operation!

I'm in Santa Clara at ISPCON. After a 9-hour trip from DC yesterday morning, I made it here just in time for Candice Rodriguez's "Hot Shots in Hosting" session. Joining her on the podium were Christian Dawson from ServInt, Will Charnock from The Planet/EV1, Christopher Faulkner from CI Host and Ted Smith from Peer 1 Networks.

After building a national backbone, a CDN and a DSL division, Christian said ServInt discovered the key to web hosting success: organic growth fueled by focus on the business you excel at, and good old fashioned customer service. Will said The Planet, too, has grown mostly from word of mouth. Ted said 50% of Peer 1's sales are to existing customers. And Chris said 40%+ of CI Host's new signups come from referrals.

Half of Peer 1's or CI Host's sales represent huge amounts of business. Which they didn't have to spend any marketing dollars on.

Pessimistic view: There's no way smaller hosting providers can compete by bidding for Adwords or offering $100+ Commission Junction payouts.

Optimistic view: New customers are well worth the high acquisition cost, because over time they'll order additional services and/or refer others. Organic growth will kick in once you build up some critical mass.

Which side are you on?

Earlier this week I spent some time talking to Jason Lemkin, who's the CEO of EchoSign.

EchoSign is an e-signature/contract management service. If you've ever had to collect signed agreements from prospective customers/vendors/employees/investors by fax, you've probably wished the process could be digitized. And if you've needed some old document to enforce a contract or settle a dispute, you've probably looked forward to the invention of a search button for dusty stacks of paper.

In either case, EchoSign is the solution. They manage signature collection (via fax, email and Blackberry) and document archiving so you don't have to. Cisco uses EchoSign, as do sales/HR/legal departments at 15,000 other companies. Jason said he's actually surprised by the adoption rate. He thought it'd take much longer to convince prospective users.

Anyway, EchoSign is hosted at RackSpace. I asked Jason whether it's a heavy burden, being the outsourced archiver of Cisco's contracts. Can you imagine the trouble he'd be in for any kind of downtime or data loss?? But Jason said that with RackSpace, hosting really isn't on his list of top 20 worries. I'm not sure I've ever heard a more compelling testimonial.

Lots of hosting companies have been talking about doing customer surveys. If that's on your agenda, I'd suggesting asking where hosting ranks on your customers' list of worries. Do you think it'd be outside their top 20?

David Young from Joyent gave a great presentation at the Office 2.0 Conference on his company's web services triple play.

Joyent's primary products are Connector, a suite of hosted apps that includes webmail, calendar, contact management and file sharing, TextDrive, a popular web hosting service that's home to 4,000+ Ruby on Rails projects, and StrongSpace, a secure storage service.

David argued that what business users need is a "PC in the sky" that offers read-to-use software for common tasks, computing power for other applications they might wish to run, and storage space for data. He announced a new $15 plan that provides single-account access to Connector, TextDrive and Strongspace.

Connector, by the way, features Skype and Jajah integration, voice being an indispensable mode of business communication. David also pointed out that all of Joyent's products support a wide range of protocols: RSS, IMAP, ichttp://www.inetword.com/mashup/mashup.htmlal, vCard, LDAP, WEBDAV, rsync, subversion... for easy interoperability with any other tools customers might use.

[Speaking of interoperability, check out this mashup grid and the SAM (Simple Ajax Mashup) techniques behind it.]

Joyent was voted Best Office Suite by two-thirds of the conference attendees, placing it far ahead of Zoho, ThinkFree, gOffice (NOT a Google product), and the very cool Salesforce/iNetWord/SharedMethods/Thumbstacks 4-way mashup (see mashup video here).

I think this shows that web hosting plays an important role in the Web 2.0/SaaS ecosystem - and that web hosting belongs in this ecosystem rather than on its own island.

PS - The Joyent folks have a great blog. Check it out, and watch the commercial they made with Sun.

I heard some big numbers from the YouSendIt folks yesterday. Ivan Koon (who ran the PDF business unit at Adobe) and Florian Brody (who was the marketing director for Amazon's A9), said that over 400 million files have been sent through their just-out-of-beta file delivery service. That amounts to over 30 TB of daily data transfer. When we made arrangements to meet a few weeks ago, they had 1 million registered users; now they're counting down to the 2 million mark.

YouSendIt's value proposition is simple. They offer an alternate channel for sending and receive large email attachments. Just select the files from your computer and enter their intended destination. YouSendIt will store them for 7-14 days, during which designated recipients can download them at their convenience. It's a clever twist on email hosting *and* shared storage/online collaboration. It's both, it's neither and it's in demand. 30 TB/day is a lot of data!

Ivan says that his engineering team is working on plug-ins for Gmail/Hotmail/Yahoo Mail to give users one-click access just when they need it. Did they really want to clog up their client's mailbox with that 50 MB presentation?? And if you ask nicely, he'd be happy to build a customized interface for your webmail system (or an Outlook add-on to give to your customers) and share any resulting fees.

I think YouSendIt is awesome. Like DreamHost's music store service, it's a new way of monetizing traditional web hosting assets. Ivan maintains server hardware and connectivity just as you do, but because of the way his service is packaged and marketed, he is gaining very rapid momentum.

Earlier I had dinner with Vlad Miloushev and Bert Armijo from 3tera. Their demo pod at the Office 2.0 Conference had been mobbed throughout the day. I stopped by several times, hoping to say hello, but I was never able to get through the crowd.

I watched Vlad and Bert strategize on how best to help ServePath's sales team follow up the leads they'd collected. (ServePath recently launched UtilityServe, a 3tera-powered utility computing service.) I joked that they sounded more like investors than vendor execs. Bert responded in all seriousness that he is totally invested in UtilityServe's success. 3tera is as determined as ServePath is to see the new venture succeed.

I think 3tera's AppLogic utility computing software is the next big thing - as do 40 or so hosting providers, who are in the midst of conducting evals. But what's even more awesome is Bert's commitment to the ServePath partnership. How many of your vendors could you count on to spend 10+ non-stop hours pitching to your prospects?

I'm in San Francisco for the Office 2.0 conference. I feel like there should be a larger web hosting contigent here. David Young from Joyent/TextDrive might be the token web hosting CEO. (Oh wait - just got a press release that ServePath will be here with 3tera to demo their new UtilityServe grid computing service.)

If you think you're in the business of web enabling small businesses - which quite a few of you do - you've got something in common with Office 2.0's presenters and sponsors. Central Desktop and Near Time (among many, many others) offer web-based collaboration environments, Wufoo hosts forms while Caspio hosts databases, YouSendIt offers large file delivery, EchoSign does document management... Depending on your point of view, they might be your competitors or potential partners; worth scoping out either way.

More importantly for those of you who offer dedicated servers or colocation, every developer of web-based apps needs hosting, and there are *hundreds* of them here.

Over the next couple of days, I'll keep you updated on who these folks are, and what they have to say. In the meantime, I've got an idea... As I commented on Paul's blog yesterday, as soon as I registered for the event, Office 2.0's organizers sent me logins for their SocialText wiki and CollectiveX community. Couldn't hosting companies do that for customer forums?

Some time ago I noticed how sparse the traffic on hosting forums is. Maybe it'd help if hosting providers made more proactive efforts to get new customers involved?