Blogarithms
Doug Kaye's thoughts on web services, web hosting and managed services.
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Big Guys Reject MSPs. Loudcloud has been criticized for its lack of big-name clients, but it's a problem shared by all MSPs. Courtney Quinn, a senior analyst for the Yankee Group's Communications Services department said, "We do not see more companies adopting managed hosting next year, which was something that surprised us." [Source: The Web Host Industry Review]
Posted Monday, October 01, 2001 4:10:24 PM 
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Outsource It!
"Companies that continue to host their own sites will gain little competitive advantage and spend more money on staffing and technology than those that outsource these functions," said David Taylor, research director, Jupiter Media Metrix. "There is 30 to 40 per cent cost savings to be realized by outsourcing hosting - and too many companies are overlooking this. Those that act and act now will be saving millions in the long run." [Source: The Web Host Industry Review.]
And here's an I-told-you-so:
Additionally, new Jupiter Web enterprise management research recently released reveals that over 80 per cent of companies begin Web development projects before their site hosting and technology infrastructure design is built.
According to Jupiter analysts, nine out of ten of these ventures will face some form of avoidable rebuilding as a result.
Posted Monday, October 01, 2001 4:01:03 PM
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What to Learn from Exodus? If you're a web-hosting customer, what can you learn from the Exodus' downward spiral? Start with this quote from The Web Host Industry Review:
In the aftermath, even Krause [now the CEO...drk] agreed the company moved too quickly, building or acquiring 44 data centers that were never used to their full potential. Even as the company went bankrupt, 10 additional centers were under construction, though few were at capacity. "We sacrificed profitability in exchange for growth and market share, over-expanding in some areas in advance of demand, not anticipating the decline as the dot-com bubble burst and the economy weakened,'' Krause said.
The lesson for customers? Do your homework. Check the financials. Make sure your vendor's business makes sense and that it can sustain its growth from existing cash and revenues. Given the current climate, no one should expect additional equity or debt financing for the web-hosting business. See my tips for more thoughts on vendor-selection strategies.
Posted Monday, October 01, 2001 3:51:35 PM
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