Tier1's VP of research, Antonio Piraino, in a 2010 interview with WHIR tv
HostingCon 2011 takes place August 8-10 in San Diego, California. In the weeks leading up to this year’s event, the WHIR will be taking you inside the program, posting interviews and features relating to specific sessions from the program. Follow our complete coverage before and during the event at the WHIR’s HostingCon coverage feed. Use the WHIR’s discount code to attend HostingCon 2011 and save on your registration.
(WEB HOST INDUSTRY REVIEW) — Last week we discussed the inspirational and philosophical bent Leading Edge Forum researcher Simon Wardley would bring to the opening-day keynote at HostingCon 2011 (www.hostingcon.com). On the second day, the keynote will veer more closely toward data-backed research insights and an intricate knowledge of the hosting industry, delivered by Tier1 Research (www.t1r.com) vice president of research, Antonio Piraino.
In his day-two keynote, scheduled for Tuesday, August 9, at 10:00 a.m., titled “Are You Ready for Hosting 3.0,” Piraino will offer hosting providers insight around moving into what he considers the third phase of the hosting market. While phase two, he says, dealt with the shift away from a server-based revenue model to a more services-focused business, the third phase is “represented by a higher layer of web services that are more resilient and secure than the previous generation, and with a greater toolset and ecosystem, to appeal to a broader audience of business-class users.”
In analyzing the cloud computing market from a hosting standpoint, Piraino says the pie is still big enough, and growing fast enough, to sustain a significant number of commoditized, broad offerings. However, in several years, when new customers are fewer and acquiring them more difficult, a host will have to be focused on addressing a specific need in order to compete.
“One of the two biggest challenges hosters will face will be around brand recognition and service differentiation in an era of increasing commoditization of the underlying infrastructure, and a more discriminating end-user with more choices on hand. The second will be the challenge to steer away from a price war”
Avoiding that price war will mean focusing on a mindset change around what the hosting company wants to be in three years, which should be a company that focuses on increasing margins and revenue irrespective of infrastructure ownership, a company that is attractive enough to receive a big multiple in a sale to a large cloud provider, or a company that can maintain its place in the infrastructure-only space.
In addressing the cloud market, says Piraino – who has extensive experience consulting for hosting providers as they work through that very stage – hosting providers tend to lack concrete ideas around increasing their company’s net value.
“They view technology vendors as an additional cost and risk factor, almost to the point of them and us,” he says. “There are technologies out there that focus on niche areas with very flexible business terms today that can, for example, mature a hosting provider’s automation prowess, that can lead to double digit percentage cost reductions in otherwise manual processes. There are also technologies allowing plain vanilla hosters to become cloud storage providers (extremely fast growing revenue source), or PaaS (with authentication and resource allocation systems) or even virtual SaaS (via applications ecosystem) vendors at relatively low cost and risk. The hosters, however, sometimes have few sources of education in this regard (hence the value of HostingCon), and usually don’t know where to even start to get their best bang for the buck.”
Based on a long analytical background in the hosting and infrastructure space, and data taken from Tier1’s long running research efforts, Piraino is poised to provide hosting providers with action items they can walk away from the keynote session ready to apply to their own businesses immediately.
In October of 2010, WHIR tv interviewed Piraino at Tier1’s Hosting and Cloud Transformation Summit, about the event, its content and its attendees.
About Liam Eagle
Liam Eagle has worked as a contributor to the Web Host Industry Review since its inception in 2000, and as editor since 2003. He has been editor of the WHIR's print magazine since its launch. His daily involvement in the gathering and reporting of Web hosting news and his regular interaction with Web hosting leaders gives him an uncommonly broad appreciation of the issues and tends facing the business. Through his WHIR blog, Liam spots Web hosting trends and offers opinions on the industry-wide impacts of major developments and the motivation behind big announcements. Follow him on Twitter @liameagle
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