In a session titled "Hosting Transformation - 2008 and Beyond," Dan Golding predicted that the next-generation of managed hosting could become one of the dominant IT paradigms next to in-house and outsourcing, adding that hosts ought to focus on providing solutions and services that IT managers at SMBs couldn't or wouldn't provide themselves and to do it better and faster than they could.

Golding gave five key directions for managed service providers to embrace with their future offerings: availability of solutions and their different options; reliability of quality equipment and uptime; services sold on demand for convenience and efficiency; content enablement for video; and establishing and embracing standards to help the industry grow.

"We think managed hosting is definitely one of the fastest growing areas of hosting," said Golding. "We're seeing 30 to 33 percent growth, in some cases considerably more from some managed hosting companies, and we're seeing all the hosting firms deciding they need to move up the stack. And where are they moving up the stack to? Managed hosting."

It is no longer enough, he says, for an IT service provider to seek to compete by offering a server at a lower price than the competition.

"Instead we're saying Web hosts need to raise their games and need to be more available and more reliable," he says. "They need to have the standards and certifications, they need to be content enabled and they need to be on demand. All these managed hosting services need to be available on demand so people can click on the site and do the impulse try rather than the impulse buy. Folks are trained to try it before they buy it and managed hosting has to adapt to that."

On Tuesday, Tier 1 Research kicked off its third annual Hosting Transformation Summit in Las Vegas, Nevada.