Microsoft software plus services general manager John Zanni delivers a keynote Wednesday morning at WebhostingDay 2010.
The WHIR is reporting live from Germany at WebhostingDay 2010. Stay tuned to our news, features, blogs and WHIR tv for more updates from the event.
(WEB HOST INDUSTRY REVIEW) — Wednesday’s third keynote session at WebhostingDay was “The New Face of Hosting,” presented by John Zanni, general manager for the worldwide software plus services industry at Microsoft’s communications sector.
He began by echoing the sentiment first presented a little earlier in the day by Serguei Beloussov of Parallels, that there is a big opportunity for SMBs and hosting providers in the cloud, with similar numbers, stating that small businesses make up about 95 percent of the businesses in any given country.
He also says that 52 percent of small businesses report that revenue has increased in the last 12 months, up from 39 percent last year. And 59 percent saw IT as critical to their success, up 20 points from 12 months ago. And 65 percent of the companies they interviewed used some type of hosted service, with 73 percent of those that don’t are considering buying them.
This all illustrates, he says, that small and medium sized companies are starting to grow again, and the ones that are growing faster see IT as critical, and those companies are looking at purchasing IT as a hosted service.
Zanni says SMBs looking to buy hosted IT services are looking for agility, reliability, accountability and security, all of which are components that together provide peace of mind, which means that the service provider becomes the “trusted advisor.” This sort of relationship, he says, is very sticky. A customer tends to stay very loyal to a service provider they view as a trusted advisor.
He shows a slide with data from Tier 1 research showing a range of hosted services arranged according to profit margin, revealing that the more complex the service the higher it tends to rank on the profit margin chart.
Hosting providers should address five components on their services: focusing on your key value add, providing services that integrate easily, leveraging existing investments, scaling up and down as business changes and selecting the right platform.
Of course, each of those categories has a more elaborate explanation, but the names serve as pretty effective descriptions.
About ten days ago, says Zanni, Microsoft CEO Steve Ballmer made a presentation in which he described the company’s new focus on the cloud. Every one of Microsoft’s products is now focused on the cloud. (Zanni encouraged the crowd at WebhostingDay to visit the Microsoft website and watch the presentation, or read the transcript).
This matters to hosting providers, he says, because Microsoft delivers its services through partners, and these products are all going to make it possible for Microsoft’s partners to deliver IT services through the cloud.
He says successful partners have exhibited three important characteristics.
Agile infrastructure – this, says Zanni, refers to a company running a system that has an architecture that can be adapted to the changing needs of its business, that is flexible and modular, with replicable processes and has a quick time to market.
He says a lot of Microsoft products – based on both Windows Server 2008 and Azure – for managed hosting, mass market hosting and application hosting, can help service providers add new capabilities quickly.
Still discussing agility, Zanni brings up the Dynamic Data Center Toolkit, another thing that has come up in many of the things we’ve written. The toolkit is a set of instructions and technologies that helps a hosting provider to create a cloud offering based on Windows Server and Hyper-V, with management controls provided by Microsoft System Center.
Skilled People – he says there are two important kinds of skilled people: those that help you sell, and those who help you build and support the thing you sell.
On the selling side, he says, you first have to identify what it is you sell. Specifically, he asks, long-term do you think there is more benefit in being identified as a web hosting provider, or as an IT solutions provider? (Rhetorical question, but the implied answer is IT solutions, just so we’re clear).
Microsoft provides a lot of tools for enabling your people to acquire the kind of skills you need.
Partner to Win – the most successful companies partner with other companies he said, throwing to a video demonstrating some very successful partnerships (with Microsoft), including Peak 10, CloudMore, PoundHost, RackForce, Applied Innovations and MaximumASP. Generally, the video included a lot of glowing first-hand reviews of the Dynamic Data Center Toolkit.
To wrap everything up, he says there is a growing market of customers willing to invest in outsourcing their IT services, but they’re looking for someone who can meet more of the spectrum of their IT needs. If a hosting provider wants to become the “trusted advisor” he mentioned earlier, it will need to provide a greater spectrum of managed services, and those services are going to have to be more integrated.
Concluding, he recommends that you take a look at how IT is sold, versus how hosting is sold. It’s not transactional. It is a solution.
He also emphasized the sea change at Microsoft, toward the cloud, a movement you can gain some understanding of by visiting the cloud section of the company’s website.
