[NOTE: if you want to skip my pitch and go right to the signup page, I guess my ego can handle it. Here's the link.]

This is a first for us - next week we'll be hosting a webinar, in cooperation with Agile Equity, a mergers and acquisitions advisory firm located in New York city and Reston, Virginia.

The webinar's title, "Web Hosting M&A Trends & Outlook," ought to go a long way toward explaining the intent of the session. It's designed to help inform web hosting providers who might find themselves on the radar of one of the companies looking at the hosting business for acquisitions, so that they might better prepare themselves in advance to maximize their valuations.

The webinar will take place next Thursday, July 24, from 2:00 to 3:00 p.m. Eastern Time, and is free to attend.

Agile Equity will be delivering the session, and I'll be on hand to moderate questions from attendees after the presentation.

I think the best way to describe the content of the session would be via Dave Cummings, of Agile Equity, who was kind enough to put together a description for me.

He says the intent of the webinar is to give people who own web hosting and web services businesses a window into current corporate finance activity in their sector and industry:

"Specifically, who's buying and who's selling; what turbulence is going through the marketplace; what new public companies may become a competitive threat. And to also help them better understand the current value of their business based on previous comparable acquisitions."

Basically, if you own a web hosting company and you've considered, or are considering, selling it; or if you're not actively considering selling, but you'd like to know more about the possibility; or if you're not interested in selling at all, but you'd like to know what your company's worth by current measures; or if you'd just like to know more about the M&A landscape, and the effect this activity is likely to have on the hosting business in the near future, I think it would be an outstanding idea for you to set aside an hour this Thursday and come to the webinar.

You can reserve yourself a spot by signing up here.

See you there.

Last night, PEER 1 Network, the dedicated, colocated and managed hosting provider held a customer appreciation event at the reliable Toronto party-hosting spot C-Lounge. A few of us from theWHIR had the opportunity to attend, and while it wasn’t informative in any traditional manner (nor, I should clarify, was that the intent), I did walk away with some interesting impressions of PEER 1 the organization.

 

Notably not a business event, the evening did provide for some opportunities for customers to throw back a couple of "peertinis" on the company, talk business with one another, or to get to know the parts of the PEER 1 team they didn’t already know.

 

I had the opportunity to speak several times, and at some length, to Jose Santos, director of marketing for the company, who has the sort of unique perspective that allows him to provide a very specific assessment of the environment at PEER 1. That is, he has been working with the same dedicated hosting assets since the days of Dialtone Internet, which was acquired by Interland, which later sold its Dedicated hosting business to PEER 1 on the way to becoming the consumer-focused Web.com.

 

Santos, as a result, has experienced a range of working environments, and a variety of corporate approaches to the same customers and products. He’s noticeably not exaggerating when he says the working environment at this company is the best he’s experienced, and that it would take more than money (or, you know, a lot of money) to convince him to move on just now. In PEER 1’s approach to customers, to marketing and to its business, he sees a lot of potential.

 

PEER 1, in the humble opinion of one of its hard-working executives, has the potential to be something special. And Santos wants to be there when it happens. It’s an interesting way to receive that kind of endorsement, for me, and it felt particularly resonant.

 

What that means for customers, in the case of this party, is a display of appreciation that really is that. Nothing more. The company had representatives in town from a few of its various locations, and it made for a unique opportunity to entertain the local clientele. According to Santos, the sales team was under explicit instructions that they were not selling that evening.

 

According to CEO Fabio Banducci, to whom I admittedly spoke for just a few minutes, this event was the first of several the company plans to bring to customers close to each of its several US locations.

I guess one of the benefits of a little experience is that you begin to be able to spot not only trends, but also cycles in the business (technically, that’s the purpose of this blog).

 

I don’t imagine, however, that it requires a tremendous amount of experience, or expertise, to notice the frequency with which “green” hosting comes up these days. In terms of press releases and marketing material, I would estimate that just now, I hear more about Web hosts’ “green” attributes than any other.

 

“Green” hosting, it seems, is well on its way to being the new Web 2.0, or software-as-a-service – the latest gimmick in the Web hosting business.

 

By that I mean that, like Web 2.0 or SaaS, green endeavors in the hosting business address a pressing need (the fact that data center facilities are consuming energy resources at a tremendous, and growing, rate), and admirably so. But hosts have been swept up in the green notion to the point where just about everybody in the business feels the pressure to present themselves as “green.”

 

One product of that mentality is that (as happened with Web 2.0 and SaaS), instead of asking “what can we do to provide our services in a more environmentally friendly way?” hosting providers are asking “how can we describe our services in an environmentally friendly light?”

 

Last week I received a press release from SWsoft, pointing out the energy-saving virtues of virtualization, and including a quote:

 

"Virtuozzo delivers the highest density available in a virtualization solution, enabling hundreds of virtual environments on a single physical server, and so it offers the greatest potential for energy savings," said Serguei Beloussov, CEO of SWsoft. "By using Virtuozzo to achieve their green computing goals, hosting providers can significantly reduce their energy usage while also realizing greater efficiency in their data center."

 

Just a few days earlier, I received a message from NaviSite, describing the energy efficient properties of outsourcing:

 

NaviSite has found that an outsourced IT model can be up to 50% more energy efficient than building a data center for many companies. In general, it takes far less electricity to run a large, energy efficient data center than it does to sustain multiple, smaller installations. So, by consolidating resources, NaviSite's customers are conserving the earth's resources in much the same way carpooling does.

 

Neither of these statements is incorrect, exactly. Nor are the assertions unethical. But they’re pretty concrete evidence that “green” has become the latest Web hosting buzzword.

 

What’s more, they help to confuse the understanding of what we might mean when we say “green hosting” (a term whose definition was already far too confused). Confusion doesn’t help hosting providers, it doesn’t help consumers and it certainly doesn’t help the environment. It dilutes the value of green hosting in general, and it diminishes the efforts of those hosting providers who have gone to great lengths to make their operations environmentally friendly.

 

That’s the real problem with buzzwords. Everybody picks up on them. And everybody applies them. And their ubiquity eliminates their ability to identify anything at all. Try to find an application that isn’t described as “Web 2.0.” Or host that doesn’t tout its SaaS credentials. It’s not easy. And in a few months, I’ll bet, it’ll be more than a little difficult to locate a host that isn’t “green.”

 

Of course, one of the results of this buzz is no doubt an increase in the overall effort to make IT environmentally friendly. That’s a good thing.

 

And the media in general is starting to cut through some of the green hype. This article, on the growing environmental impact of the data center business, and the many ways (including some that I’ve mentioned here) that IT companies are trying to go green, puts it pretty succinctly:

 

“It's a lot easier to put out a news release than to build a data center with a significantly smaller environmental footprint.”

This week, the US Environmental Protection Agency released an alarming, possibly alarmist, report on power consumption by data centers. A very thorough retelling of the material found in the report is available in this Computerworld article.

 

Here is a somewhat more concise summary:

 

- Data centers and server equipment currently consume approximately 61 billion kilowatt hours in the US - approximately 1.5 percent of the nation’s power usage.

 

- That amount doubled from 2000 to 2006, and is expected to double again by 2011 at current rates of growth.

 

- At that rate, the US would need to build 10 new electric power plants during that period in order to meet the energy demand.

 

The environmental impact of IT technology is a topic that comes up quite frequently here at the WHIR. And it’s something I’ve personally pondered quite a bit. While it’s well out of my realm to offer any insight into the accuracy of the EPA’s numbers, I think it’s a fairly reasonable assumption to assume that the largest growth took place during the last two years, as technology phenomena like BitTorrent and YouTube made the distribution of video material commonplace, and led to the consumption of considerably more computing and network resources.

 

It’s probably not outrageous to imagine that those technologies aren’t the richest or most resource-hungry applications that we’ll see in the immediate future. I couldn’t really speculate as to whether the prediction for the future is conservative. But I can say with a fair degree of certainty that it is relevant.

 

Part of the impetus for the EPA report seemed to be the proposing of solutions to the escalating energy consumption situation. The US could escape a future energy crisis, says the EPA, if data center operators and IT managers consider this a reason, and an opportunity, to reinvent their architectures around energy efficient technologies.

 

And the EPA has it’s own agenda (protecting the environment) to promote. According to the Computerworld article:

 

“There are efforts under way by industry groups and the EPA to develop a metric to allow IT managers to compare power use against workloads for these lower-end servers. The EPA is also interested in seeing development of a standard that would allow IT managers to measure the total power consumption against the power consumed inside a data center, giving data center managers a benchmark to use.”

 

The EPA report has seen quite a bit of coverage up to this point, and the beginnings of what I can only assume will be a somewhat widespread reaction.

 

The Green Grid, an environmental .org-type organization becoming fairly well known to the Web hosting faithful, apparently held a webcast Tuesday to outline its own intentions as far as making data centers more energy efficient.

 

I didn’t see the webcast, nor can I find a place to view it after the fact. But I am interested in the Green Grid’s progress. It will be interesting to see if its members produce a truly unified vision, or if there is a potential for self-interest to get in the way of progress.

 

UPDATE: The PR folks at the Green Grid sent me a link to an archived version of the webcast. If you'd like to watch it, you can do so here.

Tuesday’s keynote was set up to be one of the big draws at HostingCon this year - an hour-long panel discussion held at 9:30 a.m. and featuring some hosting heavyweights, including SWsoft CEO Serguei Beloussov, cPanel operations manager David Koston, HostMySite CEO Lou Honick and Touch Support technical director Sean Richards.

 

The session was moderated by WHIR blogger, and presumably other things, David Snead, who has already posted his on-stage impressions of the event (right here, FYI). But I thought it was worth following up from the audience point of view, since the premise of a presentation tends to lend itself better to the edification of the audience.

 

My photographs from this session (as promised in a comment I posted in David’s blog) are unfortunately in the back of a Chicago taxi cab. If you find my camera, do me a favor and post them on Flickr.

 

And I did, it turns out, learn a few things, although how much that related to the “future of service enablement,” as promised by the presentation’s title, is perhaps a matter for debate.

 

The panel members might have saved a bit of time by meeting beforehand to reach the consensus that “service enablement” is a mostly-meaningless buzzword-type term, a process that took up the first 10-or-so minutes of the session. Apparently the original title was “control panel smackdown.”

 

Once the nits were picked, however, the panel got down to the business of relating how it might be related to their own business objectives.

 

Honick, the Web host on the panel, provided some of the clearest insight into the relevant issues for Web hosting. In particular, he pointed out a part of “enabling services” that hosts often ignore. Too many hosts assemble their packages of services without consulting customers on what they might need.

 

The panel at large agreed that customers will tell you what they want, if you provide them with the means to do so. Surveying them to find that out is a key to building the most functional package of services.

 

Ultimately, the as-a-service model for delivering software is going to matter most to answering those customer needs. And software as a service should mean more to hosts than it does even now, with its hot-topic status. Why wouldn’t a Web host have developers on staff, creating small-but-valuable services that go beyond the standard-issue SaaS applications?

 

After all, it’s not too far down the road that hosted Exchange, for instance, will no longer be a differentiator.

 

The feeling I got from this session, and from many of the sessions I saw and the conversations I’ve had at HostingCon this year have left me feeling that Web hosts, by and large, are working within a certain status quo. And if they’re not quite excited to remain on the same path, they are at least mostly content to do so.

 

One of the keys to this conference, I think, was the idea of hosts looking ahead; picking the technologies and trends they want to apply to their businesses. This is not an industry where a service provider can remain relevant without looking to the future.

I spoke to Bert Armijo from utility computing platform developer 3Tera this week, mostly for a feature to be published next week. But some interesting things came up that aren't perfectly suited to the regular feature, and I wanted to get them up via the blog.

A bit of preamble: 3Tera's business model isn't totally typical of a supplier to Web hosts. It's not dependent on a standard licensing fee, and it's a piece of equipment at a set price. 3Tera's income is based on the amount of resources being deployed under its AppLogic platform. And its involvement in the distribution of the service is integral enough that the word "partner" is actually, in this case, a very accurate description of the relationship between Web host and vendor.

So, while 3Tera's goal is certainly to distribute AppLogic-based utility computing to the largest number of end users possible, that doesn't necessarily mean distributing it via the largest number of Web hosts possible. In fact, says Armijo, the company is most interested, as of this moment, in working with a relatively small number of partners, and focusing on making them as successful as possible.

The result of all this is that 3Tera's major objective is not to sell Web hosting providers on the value of the utility computing model; its objective is to sell end users, would-be colocation customers, on the potential of the utility model in general, and the AppLogic platform in particular.

Preamble complete.

Armijo is excited about the growth 3Tera is seeing in the audience for utility computing services:

"Last quarter we saw more than 100 percent growth in the number of customers using virtual private data centers. So it was a very successful quarter. And we're seeing that growth continue into this quarter.

"We're seeing a pattern of users that basically are those folks that we had been targeting since the middle of last year. SaaS and Web 2.0 providers, primarily. And a few of them are kind of prototypical of the business drivers that we've been talking about for a while."

Interestingly, he says that a big part of the interest can be attributed to Amazon's Elastic Compute Cloud service - the very large Amazon brand making the case for utility computing in a way and on a scale that is simply beyond the means of the comparatively tiny 3Tera.

"To be quite honest, the guys at Amazon did us an enormous favor in launching last year because their visibility has really pushed forward people thinking about utility computing. And in the research people do before they sign up a lot of them do find us, and our partners. So it has really helped us to start the conversation with a lot of companies that otherwise might have pushed back a little bit."

[Case in point: while writing this, I Googled "Amazon EC2," and was met, among other things, by a sponsored link to 3Tera's site that asked if I was "waiting for EC2."]

Amazon, says Armijo, is not a company that 3Tera considers a competitor. This is because Amazon's role in utility computing is as the distributor of a service, whereas 3Tera is the developer of an underlying technology. Conceivably, Amazon is a company that 3Tera would consider a possible customer. However, 3Tera's partners undoubtedly consider Amazon a competitor at this point.

But he says the services do deliver two very different varieties of value.

"The two systems are different enough that there's very seldom any difficulty positioning and getting customers to understand the value proposition of the two. AppLogic is all about systems. It's all about large-scale infrastructure that you can actually provision load balancers and VPNs and firewalls and things that don't make a whole lot of sense in the Amazon Web services environment. On the other hand, Amazon is all about resources by the hour, and if what you want to do is fire up a lot of virtual machines, you can do that in a very quick, easy way."

The point being that Amazon, with its very audible trumpeting of the model, is doing a considerable share of the work with regard to 3Tera's objective of selling the idea of utility computing to potential customers.

As you might have already read, Hostway announced today that it has acquired Affinity Internet, adding another company to the short list of Major Players in the shared Web hosting space.

I spoke to John Lee, Hostway's vice president of global marketing and Andrew Schroepfer, president of Tier 1 Research today, which is probably evident from this feature.

As is sometimes the case, there was interesting discussion in both conversations that didn't quite fit into the scope of the story.

One interesting thing that came up was that John Lee, in discussion of the deal, said "I believe this effectively puts us as the largest shared hosting provider in the world. . . in terms of customer count, as well as revenue."

Hostway-plus-Affinity is without question one of the big players in shared hosting now, but this seems like a bit of an exaggeration. But more interestingly, it is illustrative of the fact that the size and influence of a Web hosting company can be hard to define.

Andy Schroepfer agrees:

"As you well know, there are a billion ways to define this industry. If you want to do domains or servers or. . ."

At any rate, Hostway is now of the scale where that kind of assertion, though perhaps not 100 percent accurate is within the realm of believability. What a difference a day makes.

Also interesting were some of the lesser-known assets of both companies, which John Lee discussed:

"I think something that might not be obvious is that as a combined company, we actually have a pretty robust channel partnership, in terms of helping broadband providers both on the telco and the cable side, and online portals, to offer value-added Web services. I can't name names, but as a combined force, we'll have some of the biggest names in North America, and be the private label Web hosting provider to those providers, so that they can offer Web hosting and other Web services, such as hosted Exchange and online backup to their customers, to add more value to their broadband products.

That's probably the biggest part of the not-so-obvious news."

TAGS: hostway, affinity internet, acquisition

Webhosting Day, as you are possibly aware, ended last week. But the thoughts continue. Particularly those that have yet to be written and published.

One of the most impactful presentations of the first day of the deceptively two-day event was the keynote by Serguei Beloussov, SWsoft's CEO. I tend to watch presentations by Serguei, and a few others in positions similar to his, with one eye on the content of the presentation, and one eye on the context. I find that considering, alongside the message, what the motivation behind that particular message might be can lead to interesting revelations about the business. Or somtimes more questions.

The Content:

In this case, it was right in the title: "Hosting 2010 - OPEN FUSION as a Platform for the Success of Hosting Businesses." Like quite a few of the presentations at Webhosting Day, the keynote was more than a little bit of a sales pitch for SWsoft's Open Fusion (arguably enough to make it worth watching for the hosts in attendance. That's not really my point).

The basic premise was that by the year 2010, SaaS isn't going to be a choice that software vendors or hosting providers make, or a philosophy into which they buy. It will just be the way things are. Delivering hosted applications will simply be the job of a host. Certainly not an outrageous claim, in my opinion.

In SWsoft's world, application hosting is made profitable venture by automating, virtualizing and standardizing the infrastructure behind those applications. And, of course, SWsoft happens to have some solutions for automation and virtualization, and a platform for standardization, that you might want to look into.

The Context:

Making the case for SaaS is an obvious objective for SWsoft. Its products are designed with the delivery of hosted applications in mind. And a host could certainly do worse than to build its platform for application hosting out of SWsoft parts.

One thing I found very interesting was the fact that SWsoft (along with Microsoft and several other presenters) was so determinedly evangelizing SaaS.

The people who sell hosts their infrastructure, and the people who invest in the business, and the analysts who advise those people who invest, have been sold on SaaS for a while. And given the amount of material I see coming from that direction, I've become convinced, in particular, of the enthusiasm for the hosted application delivery model around the Web hosting business.

But SWsoft's presentation would seem to indicate that the enthusiasm isn't all the way there among the Web hosts themselves, at least in SWsoft's opinion. Could it be that I've heard the SaaS sales pitch enough times that I've begun to assume there's a level of acceptance that isn't quite there?

During the question and answer period, Serguei asked the audience (of roughly 50 people) how many of them were currently offering hosted Microsoft Exchange (which I perceive to be the sort of default entry-point for offering hosted applications), and one person put up his hand.

Is this a discrepancy between American and European markets? Maybe not. It seems like a similar amount of SaaS evangelizing takes place in North America.

So how far are we from hosting providers in general getting excited about SaaS, and building application hosting into the services they provide?

TAGS: webhosting day, SWsoft, Serguei Beloussov, saas

I think it would be safe to assume that everyone's quite aware of the Viacom/Google/YouTube lawsuit by this point, given the tendency of $1 billion legal actions to be reported in the news.

There's an interesting Reuters story here, which includes input from a couple of analysts on the impact the lawsuit might have on the popular interpretation of the Digital Millenium Copyright Act and how changes to that interpretation may affect service providers as a result of this particular dispute.

(There's a similarly interesting article on The Register)

This, of course, is where we begin to see the impact on Web hosts - and let me be clear here that I'm talking about anybody that provides users with a means for posting (potentially copyrighted) content online, be they an old-fashioned Web host, or the provider of some social networking service or user-generated content site.

Basically (bearing in mind that I'm not technically a lawyer), the interpretation up to this point of the DMCA's "safe harbor" provisions has protected hosts against liability in exchange for responsibility. That is, there's an understanding that a host can't necessarily prevent its customers from putting copyrighted materials online, but it bears a certain responsibility for responding to complaints.

Up to this point, it has been enough for a site like YouTube to respond quickly when notified of a possibly infringement. But that understanding of the DMCA may change with the legal action.

Part of the premise for the Viacom lawsuit seems to be that YouTube isn't doing enough to prevent users from uploading copyrighted content in the first place. The company isn't taking advantages of some of the technologies that could identify potentially copyrighted material when a user tried to post it.

This may surprise you, but when reading about a $1 billion legal dispute between two gigantic media corporations, I tend to view both companies' official lines as just slightly less than 100 percent true.

Again, I suspect I'm not telling you anything you don't already know here, but YouTube does see a tremendous amount of traffic from people searching for copyrighted clips of, say, the Colbert Report. And Viacom may not be quite as interested in the sanctity of its copyrights (I think it is patently impossible that Viacom believes a copyright-infringing 30-second clip of one of its shows on YouTube is anything other than highly effective free advertising) as it is in stalling the progress of YouTube while its own Internet video investments play catch-up.

Ultimately, getting a look at anybody's real feelings about truth or justice becomes awfully difficult when there are billions of dollars involved.

The important thing, for you and I, is that this case could have a tangible impact on how you treat the possibility of copyright infringement among your customers, and what the court is willing to offer you in its interpretation of the DMCA's safe harbor provisions.

(By the way, this seems like a perfect subject for a couple other bloggers to weigh in on, so I'm going to go so far as to email some people looking for input if they happen to miss this post - expect some interesting follow-up commentary)

TAGS: google, youtube, viacom, dmca

I make certain educated assumptions about the people who read these blog posts.

Given the context of this particular Web page, for instance, I think it's probably fair to assume you are somebody who works in the Web hosting business. Or somebody who has the skills to work in that business, should they so desire. Or you're somebody who operates a Web hosting business and would be interested in getting to know some of the people who fit into the last two categories.

I mean, maybe you're somebody I went to high school with who just googled my name. But mostly, probably, we can assume that you fall under one of the categories in the previous paragraph, or some similarly appropriate characterization.

The point is that these pages we operate at theWHIR tend to be a focal point through which many people pass who might benefit tremendously from getting to know one another. It is unfortunate, then, that the news, features, guides, event listings, blogs and various other elements of the site don't really provide the means for visitors to make that sort of connection.

What is fortunate, however, is that we have just introduced a new site that is specifically designed to facilitate those very relationships. It's called WebHostingJobs and is conveniently located at that very same url.

In case you missed the news story on our site, or the wire stories, this blog entry ought to serve as an additional heads-up.

It's a pretty simple process, based on a pretty simple principle - WHIR readers are, in many, many cases, very employable Web hosting experts, or Web hosting executives who might like to employ the aforementioned experts.

So I'd advise you to take a look at WebHostingJobs, and see if there's anybody out there who you'd benefit from connecting with.

And should you find some excellent new employment opportunity, or excellent new employee, please accept my heartfelt congratulations.

TAGS: whir, web hosting jobs