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Who's winning in the hosting industry? Presently, the mainstream coverage of the hosting industry is full of doom
and gloom. In the last couple of weeks, Digex
and Divine have each reported $50M in quarterly
losses, and many of the largest companies in the industry such as Worldcom,
Global Crossing, and XO,
have set a course of huge losses, bankruptcy and SEC investigation.
Given the widespread coverage of these events, people could be forgiven for
thinking that it was not possible to operate a hosting company at a profit,
or even to grow revenue in the present environment. Yet, amidst the carnage,
some companies with more carefully chosen business models have been able grow
at rates which would normally be regarded as impressive, but seem outstanding
in the current climate.
Taking the hosting companies identified by the Web Server Survey and restricting
the analysis to those that have no known finanical problems and were already
large at the start of the year, shows that eight companies companies have achieved
roughly 30% growth [rackspace is 29
and a fraction] since the start of the year, and seem set for 50% year on year
growth measured by responding ip addresses.
Hosting Companies with fastest increase in responding ip addresses, January
- August 2002
| Hosting Company |
January 2002 |
August 2002 |
Change |
| rackshack.net |
5,485 |
10,329 |
88% |
| cybercon.com |
8,607 |
12,373 |
44% |
| crystaltech.com |
7,109 |
10,188 |
43% |
| interland.net |
92,052 |
125,589 |
36% |
| dialtoneinternet.net |
24,429 |
32,752 |
34% |
| sphere.ad.jp |
8,173 |
10,771 |
32% |
| he.net |
9,791 |
12,810 |
31% |
| rackspace.com |
9,419 |
12,176 |
29% |
Leading the table by a wide margin is rackshack.net
which offers exceptionally cheap pricing. Rackshack also has an ISP business
ev1.net, which may make its cost of ownership
of bandwidth lower than for pure dedicated server vendors.
It is noteworthy that all of the fastest growing companies are all majoring in dedicated servers, although
Interland
and
Crystaltech
also have a large shared business.
Dedicated servers have proved the most successful segment of the industry, though the largest shared hosters,
Alabanza
and
Pair Networks
are also showing good growth, but at a rate below the companies in the table.
Also, noteworthy from Sun's perspective, is that few of the companies continue
to offer Cobalt, which was not long ago a defacto standard in the dedicated
server industry. Hosters now prefer servers from IBM, Compaq, or no name boxes,
with third party control panels. Notably, Rackshack dropped Cobalt near the
start of the year, not long after placing the largest ever order for Cobalt
servers in December.
[Reprinted from the latest Netcraft
survey at http://www.netcraft.com/survey/.]
Posted Tuesday, August 20, 2002 10:44:36 PM 
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