Liam Eagle: LETTER FROM THE EDITOR

The Web hosting business is evolving. Hardly a revelation – I doubt there’s been a moment in the business’s history when that statement wouldn’t have been true. What makes this moment unique is how clear the path appears.

Investors, analysts and mainstream media are, at this moment, particularly enamored of the terms “Web 2.0″ and “software as a service” – buzzwords that describe a mode of distributing software that is certainly not new, but that has perhaps begun to realize its potential.

Buzzwords, after all, are an expression of buzz, which is another way of saying “excitement.” And it is an exciting time to be involved in hosting.

I recently attended a presentation by SWsoft CEO Serguei Beloussov, who pointed out that when his company, without actually altering its objectives, started describing its business as “SaaS” instead of “Web hosting,” it began to see a lot more media interest. If you can figure out a way to fit SaaS into your description of what you do, he proposed, you might begin to see more attention from media and investors as well.

I might add – as he did – that it is time to figure out how to fit the kind of service that term describes into the nuts and bolts of your business.

With this, our building blocks issue, we set out to examine the new ecosystem emerging in the hosting business. The new model enables hosts to assemble services from outside developers in a user-driven way.

The term Web 2.0 tends to describe the user’s experience relative to this new system of applications that exist out there in the cloud and can be pulled together to create a user’s Internet experience, and their presence on the Internet. This new reality has, to an extent, reduced the appetite for traditional Web hosting. Major brands like Google, Yahoo! and Microsoft have moved in, along with a series of suddenly-substantial startups, to meet the new appetite for emerging services. In his feature on the new Web 2.0 ecosystem, Wayne Epperson describes the Web host’s role in this new environment, and how a host can benefit from using these tools.

SaaS describes the service delivery side. Generally associated more with hosted applications for business, SaaS is the market in which analysts see real revenue potential for service providers. They envision you providing your small business customers with hosted applications like email, collaboration tools, CRM and other more vertical-specific solutions. Dennis McCafferty describes how hosts can best go about building the platform for delivering hosted applications.

Many hosts have already made the move into the SaaS market. But some are wondering where to start. In a feature on breaking into SaaS, Esther M. Bauer examines the process of delivering hosted Microsoft Exchange, the closest thing to a sure thing in the hosted applications business.

This shift in the hosting business necessitates a shift in how we should think about the business. And we are marking that shift with our building blocks issue. My hope is that after reading the issue and employing some of its insight, you’ll be able to honestly employ the right buzzword in describing your business.

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