I've got a few more posts to make following the SWsoft summit last week - Internet lawyer and WHIR blogger David Snead made a pretty excellent presentation; I had a very interesting conversation with Microsoft's Michael van Dijken regarding the company's SaaS Incubator program; and there were a few other interesting bits and amusing curiosities.
I'll have it wrapped up, I expect, in time for next week's
ISPCON, from which WHIR writer Justin Lee will be blogging. Check the "WHIR Happenings" blog (
located here) next week for posts from ISPCON.
On to the matter at hand.
And by the way, I would hope that the volume of posts dealing specifically with material from this event doesn't come off as a very vocal personal endorsement of SWsoft the company as much as maybe the natural result of the fact that there were quite a few interesting ideas floating around at this event.
On Tuesday, SWsoft director of hosting market sales Mike Riolo gave a presentation on business models for virtualized hosting. In one of the more purposefully inventive discussions, Riolo set out to offer some new ideas for Web hosts looking to make money from virtualization.
The point seemed to be that while virtualization (in this case, Virtuozzo) can be (and is) used to deliver VPS hosting, the fairly limited approach taken by many of the hosts in the "VPS hosting" market leaves a whole world of possibilities off the table.
The typical VPS hosting arrangement, he says, is three-or-so virtual server offerings of increasing resources and increasing price. But how many customers really go for the larger VPS package? Not exactly a rhetorical question, but the answer is supposed to be the fairly obvious "not nearly enough to make this particular business model necessarily the most profitable implementation of virtualization."
In general, his advice was that a host should be looking to move up the value chain with regard to each of its customer relationships - not exactly a revelation in terms of Web hosting strategy. But his specific advice with regard to using virtualization to propel a hosting business in that direction was the unique and interesting part.
He described a managed VPS hosting model, designed to serve a small-business customer base that knows what it wants in terms of service, but not necessarily in terms of resources. A managed VPS, in this case, is 50 virtual environments on a single machine, each going for about $20 per month. Around those accounts you could offer additional services, at an additional charge. Backups in excess of whatever basic amount (maybe 10) included in the plan, for instance, could go for $2 apiece.
Putting some sort of business-specific software on one of those virtual environments, and delivering it as a service could increase the value of an offering exponentially. Providing a customer with some kind of service means that you're holding their information for them, which means a higher attach rate.
Mix it up. Create a bundle of services that each occupies a virtual environment on a given machine, and then sell that machine and bundle of services, managed, as a package.
Ultimately, the point of the discussion that virtualization can be used to deliver much more than just standard hosting resources chopped into pieces.
TAGS:
swsoft,
virtualization
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