ScienceLogic CTO Antonio Piraino Predicts Web Host Industry Trends for 2012

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With a new year comes the desire to make change, and when it comes to web hosting, former VP of research at Tier1 Research and CTO of monitoring firm ScienceLogic Antonio Piraino says that hosting providers will need to make some serious improvements to keep up with where the industry is headed in 2012.

In an interview with the WHIR, Piraino says that there are four key areas in which web hosts will start to really focus on in terms of cloud development going forward.

“The things we see most hosts starting to up the ante on are security number one, network and management number two, and orchestration and automation would be three and four,” Piraino says.

Piraino predicts that there will be one or two huge cloud infrastructure breaches in 2012 since most companies tend not to be extremely proactive about their security until they have a problem. At the same time, he encourages hosts to not shy away from talking up their security to customers.

“On the one hand I’d say there is going to be a big attack but on the flip side I keep trying to tell hosts that they need to not be afraid to go and talk up their security because the average company in the United States, or in Europe, or anywhere else in the world has less security than the average host. I think that some of them will start to do it, but that it’s something that all of them should start to talk about,” Piraino says.

Web hosts that provide cloud services will see a greater spend on cloud computing, and the price of cloud computing will go up as hosts start to layer more differentiators and services on top of their infrastructure as a service, according to Piraino.

“There’s going to be higher margins made of cloud computing as well next year. Whatever hosts are not trying to do something in that regard or thinking in that regard are lagging behind for sure,” he says.

Hosts should not be afraid to raise their prices, Piraino says, but they can’t do so without elevating their services.

“A lot of them just don’t know how to elevate their services and I think there is going to be a big separation between the winners and losers next year because businesses are getting a lot more savvy about their options. There’s a lot more noise being made by the top hosting and cloud providers,” he says. “If I was a hosting provider today I would spend a lot more money on marketing than I ever have in the past and I think that’s what we’re going to see in the new year. We’re going to see a lot of marketing campaigns with big budgets from the leaders in the space and new services.”

Piraino says that every web host thinks they can differentiate themselves on support but it’s not enough.

“Unfortunately that’s not a differentiator between each other. It is a differentiator towards Amazon perhaps, but even there you’re going to have to start elevating the kind of technology and services you offer,” he says.

Another trend Piraino foresees in 2012 is more service providers becoming service brokers in that they resell other technologies such as Amazon or third-party reporting systems.

Piraino says web hosts need to prepare for cloud 2.0 or hosting 3.0.

“[Hosting 3.0] is the ability to layer high-margin services on top of that underlying infrastructure and that’s where things like the more automated you are the better your margins are going to be because now you’re not having to hire more and more people who are expensive to do all these manual workflows,” he says.

By tying all the pieces together, Piraino says web hosts will save on cost and give them a differentiator and the ability to be more attractive to their customers. He says those web hosts who don’t implement automated systems are really going to start losing out.

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