A few reasons why WEB HOSTING will increasingly be a SOFTWARE business 2007 cPanel Training Seminar
Says Charlie Giancarlo, Cisco Chief Dev. Officer “ We Are A SOFTWARE Company” <ul><li>65% of Cisco engineers are software engineers; management expects significant increase going forward </li></ul><ul><li>Software encompasses more than end user apps like PhotoShop and PowerPoint. It provides framework for business processes </li></ul>
Thanks to 200,000 lines of new code each month <ul><li>Competitive research </li></ul><ul><li>All-in-one store building + advertising </li></ul><ul><li>Listing interface auto-generates product descriptions using UPC/ISBN </li></ul><ul><li>Print postage/mailing label, request pick-up and track packages from PayPal interface </li></ul><ul><li>When you sign up for an eBay store, what you get is seamless business process automation, NOT oversold web space and bandwidth! </li></ul>
As Nick predicted, data centers disappear into software too <ul><li>Nicholas Carr: yesterday’s answering machines have evolved into today’s voicemail </li></ul><ul><li>BT: yesterday’s telco network has involved into Web21C </li></ul><ul><li>Open API allows external developers to integrate functionalities such as SMS, voice calls and subscriber presence into 3 rd party apps </li></ul>“ Software Kills Hardware”
Network World + Computer World: “Category Breaker!” <ul><li>Savvis CTO, Jul 06: “You'll be able to encapsulate in software the config of an entire data center. Need to set up a new data center? Just run the program.” </li></ul><ul><li>Entire “server” clusters now available for copy-and-paste re-deployment & point-and-click migration between physical facilities </li></ul>Layered Tech’s Virtual Private Data Centers
SoftLayer sold 1,000+ servers in Feb & is ramping up! <ul><li>With SoftLayer’s open API, developers can integrate provisioning, remote reboot, bandwidth graphs, etc into 3 rd party apps </li></ul><ul><li>Resellers can order more servers right from cPanel interface! </li></ul><ul><li>Enterprise customers are integrating API with corporate intranet </li></ul>“ We’re Becoming a Software Company”
Software is Modular (Like Lego) Why Webmail.us chose Amazon vs Rackspace “ Amazon's web services allowed us to build something new. S3 allowed us to build faster and start saving money earlier.”
Software is Powerful Can U complete w/ 1-size-fits-all sales pitch? <ul><li>Amazon: recommendations responsible for 30% of revenue </li></ul><ul><li>Google CEO: wants to answer questions like “what shall I do today?” </li></ul><ul><li>Quantcast CTO: “eCommerce is destiny” </li></ul><ul><li>MIT Media Lab: can predict your schedule with 79% accuracy </li></ul>
“ Web 3.0 = 4C + P + VS” Straight-up commerce is going out of fashion <ul><li>Commerce </li></ul><ul><li>Content </li></ul><ul><li>Context </li></ul><ul><li>Community </li></ul><ul><li>Personalization </li></ul><ul><li>Vertical Search </li></ul><ul><li>Says ReadWriteWeb </li></ul>Photo from http://www.flickr.com/photos/robdurdle/170469445/
The More They Use, The More U Lose How to better align incentives? GoDaddy: 1000 GB for $6.99 DreamHost: 1600 GB for $7.99 1&1: 2500 GB for $7.49 LunarPages: 2500 GB for $6.95 iPowerWeb: 3000 GB for $7.95 BlueHost: 3000 GB for $6.95 PowWeb: 3000 GB for $5.77
The Utilization/Monetization Gap Blue = YHOO, Red = GOOG <ul><li>2000: Banner ads generated 34x more revenue ($3.8B) than search ads ($109M). Yahoo! is king </li></ul><ul><li>2006: Google improves system for aligning business model with naturally occurring behavior (search); generates $7B from AdWords </li></ul><ul><li>(According to MarketWatch) </li></ul>How does this apply to web hosting?
A Few Other Business Models Is your ARPU increasing by 42% per year? <ul><li>SaaS: Pay per seat </li></ul><ul><li>Amazon: Pay per hour, pay per GB, pay per GET request </li></ul><ul><li>OpSource: Success based pricing </li></ul><ul><li>Shopster: Hosting + 700K wholesale products, shipped directly to customers </li></ul><ul><li>MySpace: Free hosting; got $900M Google ad contract </li></ul><ul><li>Google/Yahoo: May triple revenue per user from free services </li></ul>Says Morgan Stanley Says Morgan Stanley 2006 2011
Customers as Assets Blue: DreamHost.com; Red: TheWHIR.com Fun fact: The 10 highest traffic web hosting providers each have more reach than the 10 highest traffic web hosting directories.
What Now? <ul><li>“ Do it yourself” vs “do it for me” solutions </li></ul><ul><li>Hardware replacement SLAs are obsolete: the question is no longer how to stay online, but what to do online </li></ul><ul><li>Overselling may seem like easy way out, but you are missing opportunities </li></ul><ul><li>Know your customers: if you understand their behavior, you can optimize business model to monetize it </li></ul>Think software! My friend Irakli builds amplifiers by hand – to many customers, web hosting is no easier
<ul><li>Without cPanel, we’d still be provisioning web space and email accounts by hand. And billing customers manually! </li></ul><ul><li>Virtualization? Grid hosting? Distributed storage? CDNs? None of that would be possible without software </li></ul>Starting with Some Familiar Solutions Thank you, cPanel :)
And Move Up the Stack infrastructure interface service definition sales + crm <ul><li>How to make your platform more redundant and secure? </li></ul><ul><li>What kind of usage should you bill for? How to meter? </li></ul><ul><li>How to connect customer apps with your infrastructure? </li></ul><ul><li>How to maximize sales effectiveness, ARPU & customer stickiness through real time knowledge of preferences </li></ul>Conclusion? Hosting success takes more than big servers
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