ecommerce hosting solution

Service and Opportunity Description Web Hosting December 2000 Version 2.0 Web Hosting Service and Opportunity Description i39 12/2000 Executive Summary "The Internet economy is the economy." 1 "We believe Web-hosting is the backbone of the Internet economy due to the fact that all businesses seeking to leverage the Internet opportunity require Web-hosting capabilities" 2 The Internet has revolutionized the way business is conducted throughout the world. Companies are rushing to adopt e-business to remain competitive and reap the benefits of new technologies. However, developing e-business capabilities poses challenges to all companies—from stretched IT resources to fast-changing technologies. For many companies, The Web and e-commerce hosting services provided by service providers offer an easy solution to the challenges they face. Hosting services have put service providers on center stage in the Internet economy by becoming the foundation of e-business. These services not only power the growth of dot-com companies, business portals, and vertical industry extranets, but virtually all businesses now rely on Web and e-commerce hosting services for critical business transactions. Visible on the horizon are also hosted application and streaming services that are gathering market momentum each day. Astute service providers are aggressively entering this market by building necessary hosting infrastructure and service expertise. IDC projects that the U.S Hosting market to exceed $18 billion by 2003. Forrester projects the total U.S. Hosting a nd Content Delivery market to reach $26.3 US billion in 2003. This is a substantial market opportunity that all service providers need to capture, as hosting services will furnish the high growth, competitive differentiation, and rich margins sought by all service providers. This is a substantial market opportunity that all service providers need to capture. With the explosive growth of E-commerce, now more than in the past, is the need for highly available, highly scaleable sites. This document discusses the business oriented Web Hosting marketplace and the steps to create and market scaleable, hightraffic, highly redundant sites with Cisco Powered Network solutions. There are 7 main sections in this document that address the subject of Web Hosting. They are: Service overview Service definitions Market and Opportunity Competitive Services Network Equipment Requirements Service Offerings by Segment References Considerations 1 Forrester Research, 1999. Thomas Weisel Partners, LLC, US Investment Banking Firm, March 2000 i39 12/2000 2 Web Hosting Service and Opportunity Description It is important to underscore that this document is part of what can ultimately form a service provider’s Hosting service and solution set. It is our belief that this generic document provides a sound basis from which a service provider specific offering or set of offerings can be tailored. Navigation Instructions This document contains hyperlink references. We have selected this modular format to simplify the process of additions, deletions, updates and access to reference information. To access a hyperlink, simply click on the hyperlink text that is of interest to you. To return to the master document or the original position within a document, use the arrow above the ruler on the left hand side of the screen. If another application is launched, the user can return to the main document by closing or iconifying the application (e.g. Netscape, PowerPoint). All documents should be view in ―page layout‖ format so that diagrams and footnotes are fully visible. Table of Contents EXECUTIVE SUMMARY ......................................................................................................................................................... I HOSTING SERVICE OVERVIEW .................................................................................................................................... 1 DEFINITIONS ....................................................................................................................................................................... 2 MARKET AND OPPORTUNITY ....................................................................................................................................... 3 1.1MARKET DRIVERS .......................................................................................................................................................... 3 3.2 MARKET SIZE ................................................................................................................................................................ 5 3.3 MARKET SEGMENTATION .............................................................................................................................................. 8 3.4 SERVICE PROVIDER OPPORTUNITY AND ISSUES ........................................................................................................... 10 3.4.1 Opportunities ..................................................................................................................................................... 10 3.4.2 Challenges.......................................................................................................................................................... 11 3.5 THE SERVICE ............................................................................................................................................................... 12 COMPETITIVE PRODUCTS AND SERVICES ............................................................................................................. 16 4.1 COMPETING ALTERNATIVES ........................................................................................................................................ 16 4.2 COMPETITION .............................................................................................................................................................. 17 NETWORK REQUIREMENTS ........................................................................................................................................ 20 SERVICE OFFERINGS BY CUSTOMER SEGMENT .................................................................................................. 28 6.1 BASIC HOSTING ........................................................................................................................................................... 29 6.1.1 Customer Segment and requirements ................................................................................................................. 29 6.1.4 Pricing................................................................................................................................................................ 29 6.1.5 Positioning ......................................................................................................................................................... 30 6.1.6 Market Delivery and Channel Strategy.............................................................................................................. 30 6.2 COLLOCATION ............................................................................................................................................................. 31 6.2.1 Customer Segments and Requirements .............................................................................................................. 31 6.2.2 Customer Benefits .............................................................................................................................................. 32 6.2.4 Positioning ......................................................................................................................................................... 33 6.2.5 Market Delivery and Strategy ............................................................................................................................ 34 Web Hosting Service and Opportunity Description ii39 12/2000 6.3 MANAGED HOSTING .................................................................................................................................................... 34 6.3.1 Customer segment and Requirements ................................................................................................................ 34 6.3.2 Customer Benefits .............................................................................................................................................. 35 6.3.3 Pricing................................................................................................................................................................ 35 6.3.4 Positioning ......................................................................................................................................................... 35 6.3.5 Market Delivery and Channel Strategy .............................................................................................................. 36 6.4 Custom Hosting ..................................................................................................................................................... 36 6.4.1 Customer Segments and Requirements .............................................................................................................. 36 6.4.2 Customer Benefits .............................................................................................................................................. 36 6.4.4 Positioning ......................................................................................................................................................... 37 6.4.5 Market Delivery and Strategy ............................................................................................................................ 37 6.5 HOSTED APPLICATIONS (SEE ASP SERVICE AND OPPORTUNITY DESCRIPTION) .......................................................... 37 6.5.1 Customer Segments and Requirements .............................................................................................................. 37 6.5.3 Pricing................................................................................................................................................................ 38 6.5.4 Positioning ......................................................................................................................................................... 38 6.5.5 Market Delivery and Strategy ............................................................................................................................ 38 7 REFERENCE TABLE .................................................................................................................................................... 39 LIST OF FIGURES FIGURE 1: E-COMMERCE DRIVES OUTSOURCED HOSTING ............................................................................... 4 FIGURE 2: TOTAL MARKET SIZE................................................................................................................................. 5 FIGURE 3: U.S. WEB HOSTING SERVICES.................................................................................................................. 6 FIGURE 4: U.S. DEDICATED WEB HOSTING SEGMENTATION ............................................................................. 6 FIGURE 5: U.S. REVENUES: WEB HOSTING TAKES OFF ....................................................................................... 7 FIGURE 6: U.S. MARKET SEGMENTATION................................................................................................................ 8 FIGURE 7: OUTSOURCE HOSTING PROJECTIONS ............................................................................................... 10 FIGURE 8: HOSTING SERVICES CONTINUE TO EVOLVE: .................................................................................. 12 FIGURE 9: WEB HOSTING/CONTENT DELIVERY NETWORK VALUE CHAIN............................................... 15 FIGURE 10: OUTSOURCED HOSTING COST COMPARISON ............................................................................... 16 FIGURE 11: COMPETITIVE PIE ................................................................................................................................... 17 FIGURE 12: COMPETITIVE MATRIX ......................................................................................................................... 18 FIGURE 13: HOSTING SERVICE PROVIDERS MARKETSHARE ......................................................................... 19 FIGURE 14: CONTENT SWITCHING AT DATA CENTER....................................................................................... 20 FIGURE 15: CONTENT DELIVERY NETWORKS: FIVE TECHNOLOGY COMPONENTS .............................. 21 FIGURE 16: TRANSPARENT CACHING ..................................................................................................................... 25 Web Hosting Service and Opportunity Description 339 12/2000 FIGURE 17: SERVICES BY CUSTOMER MATRIX.................................................................................................... 28 FIGURE 18: PRICING MATRIX..................................................................................................................................... 30 FIGURE 19: HOSTING SERVICES FEES ...................................................................................................................... 33 Web Hosting Service and Opportunity Description 439 12/2000 Hosting Service Overview "The Internet economy is the economy." 3 "We believe Web-hosting is the backbone of the Internet economy due to the fact that all businesses seeking to leverage the Internet opportunity require Web-hosting capabilities"4 The Internet has revolutionized the way business is conducted throughout the world. Companies are rushing to adopt e-business to remain competitive and reap the benefits of new technologies. However, developing e-business capabilities poses challenges to all companies—from stretched IT resources to fast-changing technologies. For many companies, The Web and e-commerce hosting services provided by service providers offer an easy solution to the challenges they face. Hosting services have put service providers on center stage in the Internet economy by becoming the foundation of e-business. These services not only power the growth of dot-com companies, business portals, and vertical industry extranets, but virtually all businesses now rely on Web and e-commerce hosting services for critical business transactions. Visible on the horizon are also hosted application and streaming services that are gathering market momentum each day. Astute service providers are aggressively entering this market by building necessary hosting infrastructure and service expertise. IDC projects that the U.S Hosting market to exceed $18 billion by 2003. Forrester projects the total hosting and content delivery market to reach $26.3 US billion in 2003. This is a substantial market opportunity that all service providers need to capture, as hosting services will furnish the high growth, competitive differentiation, and rich margins sought by all service providers. With the explosive growth of E-commerce, now more than in the past, is the need for highly available, highly scaleable sites. This document discusses the business oriented Web Hosting marketplace and the steps to create and market scaleable, high-traffic, highly redundant sites with Cisco Powered Network solutions. Definitions Web hosting service is the outsourcing of Web site infrastructure requirements to a service provider. It is the off-premise development, deployment, and management of a Web site by a service provider, where authorized users and the general public access a Web site primarily through the Internet. Management complexity increases as e-commerce applications are added to a Web site. Web Hosting service can deploy shared servers or dedicated servers. • Shared. Many customer sites are hosted on a single server; high- volume service providers maintain many shared servers. 3 4 Forrester Research, 1999. Thomas Weisel Partners, LLC, US Investment Banking Firm, March, 2000 Web Hosting Service and Opportunity Description 139 12/2000 Dedicated. One customer’s site is hosted on one or several separate servers, with the following further distinctions: • Simple. Sites are hosted on a single server. • Complex. Sometimes referred to as managed. Sites are hosted on multiple servers, and customers use hardware and software explicitly supported by the service provider as standard offerings. • Custom. This involves complex hosting with the service provider’s management using hardware and software that may not be among the provider’s standard offerings. • Colocation. Hosting customers use the service provider’s rack space and bandwidth but do not have managed services (or only minimal monitoring services). • HSP (Hosting Service Provider) An HSP will offer the hosting infrastructure services including data center facility bandwidth, network management, and server/operating system platforms to enable the delivery of Web, e-commerce, and software applications from centralized and networked facilities. A hosting provider may choose to offer only some portions of the infrastructure services. IDC (Internet Data Center) Often used interchangeably with HSP. AIP (Application Infrastructure Provider). An AIP offers end-to-end network and data center services, and in most cases it also provides the configuration and management of hardware and software platforms for application hosting. ASP (Application Hosting Provider) An application service provider (ASP) offers networked-based applications on a rental or per-usage basis. It is responsible for combining related software, hardware, and networking technologies to deliver the application service in lieu of customer ownership and management of these applications. An ASP can choose to outsource rather than own or build the service infrastructure through an HSP, but in all cases they will deploy, manage, and enhance nethosted applications. Market and Opportunity This section discusses the market drivers and opportunities. 1.1 Market Drivers The Internet has become a business tool for growing businesses to streamline business operations, improve customer service and close sales and is the core business infrastructure for Dotcoms. It also enables businesses to strengthen their relationships with their customers, partners, suppliers and employees. Several market conditions are driving businesses to outsourcing their hosting services:  Expanded business. With Web Hosting, business are always open for business - there are no barriers to time or locations. 239 12/2000 Web Hosting Service and Opportunity Description  Focus on Core Competencies. Businesses need to focus on their core competencies instead of allowing IT requirements to consume internal resources.  Lack of Internal Expertise. It is increasingly difficult to recruit or even retain IT staff with Internet expertise.  Cost Savings. Internal ongoing costs are high when businesses consider the cost of telecom costs, hardware costs staffing costs, and obtaining expertise.  Time to Market. Companies need to deploy e-commerce and other state-of-the-art Internet applications in a timely manner. Manage Complex Requirements. As eCommerce and eCare increases, there is greater need for 24x7 Internet data centers and high-performance e-commerce Web sites. Most Web sites experience rapid growth and constantly need additional bandwidth and only service providers can offer bandwidth on demand and guarantee network uptime. Network and security management is becoming increasingly complex while the bar for Web performance is being raised. Figure 1: E-Commerce Drives Outsourced Hosting E-Commerce Drives Outsourced Hosting: 90% of revenues are Ecommerce enabled by 2004 Forrester, 2000 3.2 Market Size Web hosting and application hosting present primary market opportunities for New World services. The total market for Web, Application hosting and Content Delivery Services will reach US $33.6 billion by 2004. Web Hosting Service and Opportunity Description 339 12/2000 Figure 2: Total Market Size Specific to Web Hosting, IDC projects the U.S. hosting market to reach over $18 billion by 2003. A Web hosting service offers greater differentiation and higher margins than a basic Internet access service, and increasing demand for Web hosting is triggering a build-out of data centers by a number of service providers. Initially, Web hosting services were limited to static content and simple Web sites, but the trend is toward more dynamic content distribution and video streaming. This trend is a response to the continuous growth and expansion of Web and e-commerce sites. As a result of growth in the market, the target customers for Web hosting services today are literally all businesses (large, medium, and small). Additionally, dotcom companies drive even higher service levels with their extensive content distribution and e-commerce requirements. Figure 3: U.S. Web Hosting Services Web Hosting Service and Opportunity Description 439 12/2000 $14,000 $12,000 $10,000 $8,000 S h ared $6,000 $4,000 $2,000 $0 1998 1999 2000 2001 2002 2003 D ed icated Source: IDC,12/1999 In a further segmentation of the Dedicated Hosting market, Complex Hosting leads the growth curve by 2003. Figure 4: U.S. Dedicated Web Hosting Segmentation Ddc t dWbH si g e i ae e o tn Rv n eS g e t to e e u e mnai n $4 0 1 ,0 0 $2 0 1 ,0 0 $0 0 1 ,0 0 $ ,0 0 8 0 $ ,0 0 6 0 $ ,0 0 4 0 $ ,0 0 2 0 $ 0 19 98 19 99 20 00 20 01 20 02 20 03 C lo a n o c tio Cs m u to C m le o p x S p im le $ M Source: IDC, 12/99 Web Hosting Service and Opportunity Description 539 12/2000 Forrester Research's projects slightly different profile: Manage Hosting leading the growth, but with a lower projection for Co-location services. Figure 5: U.S. Revenues: Web Hosting Takes Off Forrester, 2000 3.3 Market Segmentation Figure 6: U.S. Market Segmentation Web Hosting Service and Opportunity Description 639 12/2000 Forrester, 2000 According to AMI (1999), Small Enterprise, defined as less than 100 employees, comprises of over 7.4 million companies in the U.S. This breaks out to the following:          1-4 employees 5 -9 employees 10-19 employees 20-49 employees 50- 99 employees 56% of universe 20% of universe 13% of universe 8% of universe 3% of universe 4.13 million small businesses (SB) 1.47 million SB 0.96 million SB 0.59 million SB 0.22 million SB Retail, Professional Business Services, and Other Services industries dominate the U.S. SB landscape, collectively accounting for six-in-ten U.S. small enterprise. One-in-two U.S. small enterprises are located in small cities, towns or rural locations (population less than 100,000). The remainder are divided between medium cities and major metropolitan cities. Average annual revenues per U.S. small enterprise is $1.91 million, of which 66% is driven by consumer sales and 34% by other businesses. U.S. small enterprises conduct business with approximately 2,000 customers per year. Supplies and services are obtained from approximately 24 suppliers per year. Specifically on Web Hosting:  There are 70%+ margins for basic web hosting services  Upside potential for ecommerce (and application) related hosting services Web Hosting Service and Opportunity Description 739 12/2000  38% of small business plan to sell over the web by end of 2000 Medium-sized (MB) corporations (100-999 employees) also show web hosting growth in the next four years. These companies are often in high-growth mode, causing them to wrestle with constantly expanding web requirements. Yet these companies may lack the in-house expertise necessary to execute such an extensive IT infrastructure. In many cases, they prefer to absorb a known monthly expense for their communications needs rather than invest in capital and scarce networking expertise.  Per AMI estimates, the MB market consists of approximately 146,600 companies with 100-999 employees. Of this universe, 93% may be classified as ―Core‖ MBs those with 100-499 employees, and the remainder may be classified as ―Expanded‖ MBs those with 500-999 employees. Manufacturing and professional business services are the leading industries, collectively accounting for one-in-two MBs. Retail is the third largest industry, accounting for almost one of every five MBs. One-in-two MBs is located in a metro area (cities with population of one million or more). The rest are evenly spread out between mid and small-sized towns. The majority (60%) of MBs have branch offices. Most MBs have been in business for well over 20 years, and over one-in-ten is a publicly-listed company.    Hosting opportunity:  The majority opt to outsource web site  50% of medium businesses plan to sell over the web by end of 2000  Backoffice integration key in expanding Ecommerce opportunities   Larger corporations with more than 1000 employees are also prominent candidates for outsourced hosting. These corporate leaders have reached their positions by emphasizing efficiency and keeping costs down. In the face of continually rising IT expenses, many of these enterprises see the wisdom in outsourcing their communications infrastructure. As networking technologies become more complex and dependence on e-commerce or intranet becomes more important, these companies also recognize that deploying and managing a wide-area network is not their core competency. Outsourcing the job to a service provider allows the company to focus more of its internal resources on the primary goals of the business. The larger a company becomes, the more cumbersome it becomes to scale to meet the needs of a complex site.    The Enterprise is poised to embrace high-end hosting (Giga, 2000; Legg Mason, 1999) Current high-end hosting customer base are primarily web-centric companies Dramatic cost savings demonstrates value of outsourcing to the corporate bottom line Web Hosting Service and Opportunity Description 839 12/2000 Figure 7: Outsource Hosting Projections O ts u e H s g E b c d b u o rc d o tin m ra e y C m a ie o A S s o p n s f ll ize 1 9 9 9 1 0 % 0 .0 8 .0 0 % 6 .0 0 % 4 .0 0 % 2 .0 0 % 0 % .0 S a m ll Md m e iu L rg a e 26.4% 58.0% 44.3% 42.0% 75.0% 89.0% 2 0 0 3 10 % 0 .0 8 .0 0 % 6 .0 0 % 4 .0 0 % 2 .0 0 % 0 % .0 S a m ll Md m e iu Lr e ag B sn s e wt W bst s( 3 u i e s s ih e ie 0 ) St sh se b H P ( 3 ie o t d y S s 0 ) 9 .0 5 % 7 .0 9 % 6 .0 2 % 8 .0 1 % 6 .0 0 % 9 .0 8 % B s e s sw u in s e ith s s (9 ) ite 9 S s h s d b H P (9 ) ite o te y S s 9 •M ore ou tsou rcin am g large b sin g on u esses •R id W site ad tion am g sm b sin ap eb op on all u esses Su o rce: ID , 2 0 C 00 ©1999, C isco S ystem In s, c. 14 3.4 Service Provider Opportunity and Issues This section describes the opportunities and the issues service providers face in deploying web hosting services. 3.4.1 Opportunities The cost and technical complexity of setting up a Web site can intimidate many business users. The opportunity for hosting services is enormous, dynamic and competitive. Some of the service provider opportunities include: • • • Major shift from Consumer to Business. As more businesses take focus on web hosting sites, there is more opportunity for higher revenues. Strong Margins SP profitability is through sharing of resources, whether it’s building facilities, hardware, software, telecom lines and programming resources. As web sites become more strategic, more of a premium can be charged. Customer Loyalty 939 12/2000 Web Hosting Service and Opportunity Description Original Internet access business is low margin and not strategic. As web sites become more strategic, businesses will be more reliant to their providers, which in turn implies less customer churn. • Competitive Differentiation Adding more depth or breadth of services will more easily allow service providers to differentiate themselves from others. 3.4.2 Challenges Some of the challenges service providers have include:  Reliability. The need to provide 24 x 7 operations, leaving no time for system maintenance. Since electronic commerce applications are used directly by your customers’ clients, the availability and quality of service of your web server directly impacts your customers’ business.  Bandwidth. Service Provider need to be able to deliver adequate bandwidth for high-volume peaks, such as special events.  Scalability and Performance. Web sites can quickly outgrow the fastest available computer. Collaborative Research 5 points out that in distinct contrast to Moore’s Law (a doubling of semiconductors capacity every 18 months), traffic on a popular Web site doubles every 100 days. In perspective, by the time semi-conductor capacity doubles, web traffic will have grown by a factor of more that 20! As a result, More computing power is only part of the answer to Web performance and scaling. Network architecture is the other part. End User Response Expectation. According to Internet Research Group, the average Web page download time is about six to eight seconds, and users would not tolerate a delay beyond 10 seconds. This is far from an ideal response time expected of an interactive session. According to research performed by IBM, twosecond response time is necessary to provide an interactive experience for a user. For missioncritical applications, traditional systems have offered sub-second response time, which is not achievable on the Internet today.   The Internet and Web Performance Constraints. The Internet, as structured today, is a loose federation of interconnected networks. Quality of service (QoS) has not been fully established amongst all interconnecting service providers. The continuous growth in Internet traffic causes congestion at various peering points, resulting in packet loss, missed connections, and slow Web page download. These performance issues affect the utility and value of Internet applications. 6 Collaborative Research, 1999. 1039 12/2000 5 Web Hosting Service and Opportunity Description 3.5 The Service Figure 8: Hosting Services Continue to Evolve: While all hosting services depend on a scalable and secure data center and backbone infrastructure, each service area entails incremental networking requirements. Faster sites and more reliable rich media translates directly into revenue for service providers, through more pages viewed, more ads delivered, a better viewer experience, and in the end, more viewer loyalty. Service provider customers also will benefit from greater e-commerce revenue, as end users are more likely to transact if the site is fast and engaging. In the simplest scenario, service providers can charge a premium for highperformance site hosting, where static content on Web pages, such as text and images, is delivered faster and more reliably than from a centralized Web server farm. Basic Web Hosting A basic service supported by most HSPs is known as basic Web hosting. Basic Web hosting supports smaller, generally static Web sites on either a shared or dedicated server. Bandwidth and storage requirements are moderate and redundancy is not always offered. This is a one-stop shopping service on which service providers deploy the hosted Web site, monitor network and server availability, and provision bandwidth and other networking services. Many service providers also offer basic Web page creation or e-commerce packages with additional charges. The target customer for this service is the small to medium-sized business (SMB) market or any enterprise customer requiring a smaller-scale Web Hosting Service and Opportunity Description 1139 12/2000 Web site. A high level of automation is required for this business as volume and standard packages are key to profitability. Co-Location Hosting Contrary to basic hosting, co-location hosting usually involves a very large Web site and bandwidth requirement. The central offerings of co-location hosting are the data center and bandwidth capacity. Typical customers run very large sites and have strong Internet expertise. They own, configure, and manage servers, switches, firewalls, applications—all components of a Web system. These customers include major portals, e-commerce merchants, large enterprises, as well as some ASPs. Service providers offering co-location services tend to have a high-speed backbone (OC-3 and above) and multiple data centers dispersed at a national, regional, or global level. Co-location customers are Internet-savvy early adopters of hosting services. The rapid expansion of their Web sites triggers a major growth of the co-location business. Advanced Hosting and Application Infrastructure Provider Services Many IDC and HSPs are creating higher-value hosting services by offering full management of large and complex Web sites. This service is in response to a market trend of increasingly larger and more complex Web sites, and a market demand for the complete outsourcing of all Web management requirements. Not all businesses are as Internet savvy as the typical co-location customer. HSPs specializing in advanced or managed hosting offer the right answers to these customers. Typical service elements of a managed hosting offering include: • Selection, configuration, and management of server and Operating System (OS) platforms • Backend network integration • Complete system monitoring and built-in redundancy • Value-added services such as stress testing, performance reporting, content delivery, server load balancing and technology consulting Forrester Research forecasts that the managed hosting segment will be the fastest growing and the largest service segment in the next five years, as illustrated in Figure 3. As more and more businesses actively participate in the Internet economy, a strong Web presence becomes a necessity. Due to the complexity of running an effective Web site, the majority of businesses will find a high-end, one-stop-shopping hosting service to be highly attractive. In fact, more value-adding service is the trend in the hosting business. Even co-location providers are increasing enhanced offerings in response to customer demands and in hopes of attracting new customer groups. Recently, a new wholesale opportunity opened up for managed hosting service providers—application infrastructure platform services. Many ASPs do not want to build the network and hardware infrastructure, either for time-tomarket or for competency reasons, and would instead choose to use a service provider’s managed hosting service. A service provider wholesaling these services to an ASP is known as an application infrastructure provider (AIP). AIPs develop expertise in implementing and managing the server/OS platforms used for packaged software applications. To create an enriched set of AIP services to ASPs, some service providers also offer billing, service provisioning, and customer care software packages, and help manage these functions for an ASP. The entire set of ASP wholesale services is sometimes referred to as an application infrastructure platform service. Many service providers are planning to offer this service soon. Web Hosting Service and Opportunity Description 1239 12/2000 Customized Hosting Customized hosting goes a step further in providing a hosting offering with extensive professional services. The service usually involves highly customized Web designs or backend legacy system integration. While managed hosting contains a professional service element, the success of the business depends on a fair amount of automation and standardization. Configuration and management services are generally limited to the networking and hardware platform of a Web system. In customized hosting, however, the provider engages in nonstandard system designs and implementation. In many cases, it includes one-time, large-scale Web events. Additionally, many large customers need their Web-based front-office applications to be integrated with their back-office legacy systems. This integration requires substantial professional services from traditional system integrators. In the future, more service providers will venture into this service segment, hosting large-scale Web events. Hosted Applications Hosting infrastructure services paved the way for a new Internet computing service—hosted applications. Like an HSP, an ASP’s business model is built upon the economic efficiency of a shared infrastructure and talent pool, complemented by a more standardized approach in application deployment. An ASP offers the application as a service, and charges monthly fees with or without some up-front payments. This service model eliminates the traditional capital investment, lead time, and management risk associated with application deployment. The target customers for hosted applications are SMBs, who have not deployed many packaged business applications due to high costs. According to a survey by Summit Strategies, enterprise customers have also shown interest in hosted applications such as e-commerce and remote learning. While some ASPs own their data center and network facilities, the majority of them prefer to use an HSP for their infrastructure requirements. ASPs are becoming an important customer group to HSPs. Content Delivery Networks: Edge Caching and Delivery Services Content Delivery Networks (CDNs) are edge caching and content delivery services that rely on content distribution technology and dynamic caching to replicate server content at the edges of the network, frequently at ISP network nodes serving end users via ―last-mile‖ connections. On a Web site using CDN services, up-to-date content can be served to end users locally from content engines rather than remotely from origin servers. More importantly, higher-bandwidth but relatively static content, such as images, graphics, or video on demand, can be stored at the local caching sites and delivered to end users in conjunction with fully dynamic content supplied by origin servers in a remote data center. Because edge delivery redirects traffic away from the Internet ―middle mile,‖ it reduces Web page download time and enables new and enriched high-bandwidth services that can be offered by portals, dot-coms, and businesses in general. While some hosting providers are reselling the edge delivery service from another provider, others are starting to deploy dynamic caching capabilities in multiple data centers for customers who do not require large-scale edge caching to improve performance. It is anticipated that most HSPs will deploy content caching and content delivery capabilities either deep into the ISP networks or along the HSP’s own network nodes. Web Hosting Service and Opportunity Description 1339 12/2000 Figure 9: Web Hosting/Content Delivery Network Value Chain Competitive Products and Services This section describes competing alternatives and offers. 4.1 Competing Alternatives The competing alternative to Web Hosting is that the enterprise decides to host in-house. Time-to-market, a managed infrastructure and access to skills and bandwidth are strong arguments in outsourcing favor. Enterprises that seek maximum control (i.e., necessary when developing Web applications that integrate with databases or services) may not desire to outsource. Service Providers need relay the benefits including technical capabilities and cost improvements delivering Web hosting services. Attached is a sample comparison of in-house versus outsourced costs. Figure 10: Outsourced Hosting Cost Comparison Web Hosting Service and Opportunity Description 1439 12/2000 Source: Giga 2000 4.2 Competition This section portrays providers of hosting services, by type of service provided. Figure 11: Competitive Pie Web Hosting Service and Opportunity Description 1539 12/2000 Source: Forrester Research 1999, Cisco IDC portrays a supplementary view the primary players, and what business models within hosting are emphasized. Figure 12: Competitive Matrix Web Hosting Service and Opportunity Description 1639 12/2000 I M lo a S r ic B G bl ev e Hh ig Eo u xds G b l C o s g lo a C n r lo a r s in /G b l e te Q e t (Q e tC b rS lu n ) w s w s y e o tio s Gn ity eu Lv l3 ee Wr C m U e o ld o /U N t Sr t p in C b a dW e s a le n ir le s PI e S Nt A& T T Vr e io Vr e e x Dio ig Er n no C n e tr o c n ic Ao e e F b v N t/M N D ita I la d ig l s n Aa a k mi B e k w yS lu n r a a a o tio s Ui S Lw o Cn n o te t C c in a d ah g n D tr u n is ib tio Bc b n ak o e D taC n r a e te / Av ne da cd Hs d o te B s /C lo H s g o tin / APS r ic A p a ic o o tin s g I e v e H ps Cs m e u to iz d Hs g o tin Source: IDC, 2000 Figure 13 shows the 1999 market shares between Hosting Providers. Note that the top 10 vendors account for 47% of the market revenue. Exodus keeps top market share focusing on managed services for a high end customer base, while Verio and Mindspring make the top 10 list through sheer volume. Figure 13: Hosting Service Providers MarketShare Web Hosting Service and Opportunity Description 1739 12/2000 Source: IDC, 2000 Network Requirements New architectures need to be considered to address the challenges of building fault-tolerant, scaleable web sites that are required for the demands of E-commerce sites. Figure 14: Content Switching at Data Center Web Hosting Service and Opportunity Description 1839 12/2000 This configuration is a Cisco solution to optimize web services, such that bandwidth consumption is reduced, response time is improved, local server availability is optimized as well as global server/site availability is optimized. This configuration depicts: • • Layer 2 switching Service Aggregation layer - content switching, load balancing capabilities using CSS11000 series, Catalyst 4840G or Catalyst 6500 with Local Director • Distribution layer : Cat 65000 and Css-11000 for high speed switching • PIX for Firewall service • Cisco 7500 or 12000 for core routing • Global load balancing in geographically dispersed sites • Distributed caching content engine - allows for web acceleration and placement of content closer to users. Figure 15: Content Delivery Networks: Five Technology Components Web Hosting Service and Opportunity Description 1939 12/2000 Pi a yDt Cne rmr aa e t r CM D Cne t otn D t i ui n i rb to s M ae a gr n D t i ue Dt Cne i rb t d aa e t r s Oi i W rgn e b Sr e e vr Cne tD t i ui n o t n i rb to s Cne tRui g o t n o tn Cne tS i c i g o t n w hn t Cne tEg - ei e y o t n d eDl v r Cne tDl v r Nd o t n ei e y o e Cne tEg o t n de Dl v r ei e y Cne tDl v r Nd o t n ei e y o e Cne t otn Rue otr U rCm u i y s e o mnt Lc lD S oa N Sr e e vr Cne t otn S ic i g w hn t A Cisco Content Delivery Network (CDN) distributes content closer to the end user, locates that content, and provides content-aware services to route a user to the most optimum source of content. A Cisco CDN improves the end-user experience by maintaining content availability and security, and by minimizing response times. CDNs save bandwidth expense. Delivering media from content engines located near viewers minimizes expensive cross-network bandwidth and takes advantage of high performance networking technology. In addition, CDNs reduce the load on server capacity. Serving content from one or a few centralized content locations can lead to server congestion and unmanageable load. By distributing content to the network edge, you can reduce server load and delay expensive server and Internet data center (IDC) network infrastructure upgrades. The net result is a highly competitive infrastructure, with better performance and lower cost than that of service providers who host from one or a few centralized locations. CDNs enable service providers to add new capabilities to their networks to improve performance and generate new revenues. Some of these capabilities include: • Caching of broad Internet content. Caches reduce bandwidth usage, improve Web site performance, and reduce costs • Accelerating delivery of content from static Web sites for Internet audiences • Delivering rich streaming media to intranet, extranet, and Internet audiences • Hosting of live broadband streaming media broadcasts Web Hosting Service and Opportunity Description 2039 12/2000 • Improving impact of e-business applications, by accelerating the speed in which pages are delivered. E-commerce sites need to be fast to retain customers. They need to incorporate rich media for a more engaging experience. The Cisco CDN solution is a tiered solution that starts with highly reliable and available Layer 2 and Layer 3 networks delivered by the Cisco IOS ® software core network. The Cisco CDN solution is defined in five major technology categories: 1. Content distribution and management— Content Distribution and Management automatically imports, maintain copies, and configures content at the edge of the network allowing input into content routing decisions. CDN management is critical to distributed network architectures. The content distribution manager is the control point for content distribution to the network edge and for collection of accounting data enabling billable CDN services. Content distribution rules are set using the content distribution manager. It initiates content distribution to the network edge and serves as the central accounting point for monitoring and billing statistics. This component improves deployment, reduces costs and automatically configures the delivery nodes located at the edge of the network. It manages bandwidth, measures performance and usage, and encodes media. For more information about Content Distribution Manager 2. Content routing— As the number of users accessing content on the Internet grows, it becomes increasingly difficult to provide a high level of availability and rapid response from a single location. A method for providing the end user with the best site response possible is needed as a site scales to handle the increased traffic of today's Internet and Intranets. The solution to this problem is content routing between multiple data centers or Points of Presence. Content Routing ensures a customer is matched with the closest or best content regardless of location. This improves a customers web experience and dramatically increases content availability. Content Routing redirects the user to the best site based on a set of metrics such as delay, topology, server load and a set of policies such as location of content, thus enabling the accelerated delivery of web content and streaming media. Content Routing ensures the fastest delivery of content regardless of location. Content routing redirects the user to the optimum site on the global network based on a set of metrics such as network latency, network topology, server load, and content routing policies. For more information about content routers For more information on Distributed Director Web Hosting Service and Opportunity Description 2139 12/2000 3. Content switching— Content switching intelligently load balances traffic across servers in a data center or POP based on the availability of the content and the load on the server. It selects the optimum server within that site to deliver the content request based not only on server availability and load, but also verification of content and application availability. It provides content services based on end-user session and the specific content requested. Load balancers remove a single point of failure and will dynamically route around a failed server. As the increase in Internet use continues, the World Wide Web servers that deliver the content and services must also continually increase in performance to keep up. But constantly upgrading servers can be disruptive and often simply reveals the next bottleneck. And at some point, a single server cannot be further scaled up anyway, so multiple servers must ultimately be applied to handle demand. Service providers can duplicate or "mirror" their servers and then use a traffic balancing technique to share the load among them. In addition to supporting clusters of servers at a single location, load balancing techniques also support geographically distributed servers, which improves reliability and can further improve response times by choosing the servers closest to the user. Cisco has led the industry in Layer 2 through Layer 4 switching for many years. Cisco adds unique Layer 4 through Layer 7 content-switching capabilities that provide features such as flash crowd protection, Universal Resource Locator (URL)-based server load balancing, dynamic content replication, and dynamic content redirection. For more information about the Catalyst 4840G Layer 2 through Layer 4 Services: Catalyst 6000 Family Catalyst 6000 Family Accelerated Server Load Balancing For applications where totally redundant Layer 4 load balancing is required as part of the contentswitching solution, either a Catalyst 6000 with integrated Cisco IOS software-based accelerated server load balancing or a Catalyst 6000 paired with Cisco LocalDirector is the best approach. The integrated Cisco IOS server load-balancing software solution and Cisco LocalDirector both assure continuous, high availability of content and applications—with proven techniques for actively managing servers and connections in a distributed environment. By distributing user requests across a cluster of servers, LocalDirector and Cisco IOS software-based server load balancing optimize responsiveness and system capacity, and dramatically reduce the cost of providing large-scale Internet, database, and application services. For more information on the catalyst 6000 series For more information on Local Director Layer 5 through Layer 7 Services: Cisco CSS 11000 Series When a customer needs full Layer 5 through Layer 7 content services, the Cisco CSS 11000 series switch is coupled with the Catalyst 6000 series switch to deliver a complete content-switching solution. Cisco’s CSS 11000 series switches significantly optimize Web response time and content availability for high-end Web and e-commerce sites. Designed to front-end Web server farms or cache clusters, Cisco’s CSS 11000 series switches determine the best Web server to handle the content Web Hosting Service and Opportunity Description 2239 12/2000 request at that moment in time based on the content being requested, availability and location of content, and network and server load – all at wire speed. Cisco offers three 11000series platforms – the industry’s only carrier-class platform, the CSS 11800, the standalone CSS 11150 for small-tomedium Web sites, and the compact CSS 11050 for small Web sites and PoPs Cisco’s CSS 11000 series switches make switching decisions based on what content is being requested (URL/file name/file extension) and who is requesting it (user’s cookie). This allows Cisco CSS 11000 series switches to enable secure and reliable e-transactions by ―sticking‖ a user to a specific server throughout a transaction, avoiding lost shopping carts caused by traffic coming from mega proxies, even during secure SSL sessions. In addition, Cisco's CSS 11000 series allows the provisioning of premium services for premium customers based on the user’s cookie. For more information on the Cisco CSS 11000 series positioning For more information about the Cisco CSS 11800 For more information about the Cisco CSS 11150 For more information about the CSS 11050 . 4. Content Edge Delivery Content Edge Delivery consists of edge servers that seamlessly deliver web or streaming media to client and keep the content continuously fresh. Content Edge Delivery accomplished from the edge allows traffic patterns to be localized. Content requests are then filled in an optimal manner improving the end user experience and allowing rich media content over the Internet or over corporate network. Cisco Content Engines are the content edge delivery devices for the CDN solution. When the content is stored at the network edge in the content engines, the content routing and switching capabilities described above will locate the optimum content engine for specific content requests. Cisco Content Engines may also accelerate content delivery by transparently caching frequently accessed content and then locally fulfilling content requests rather than traversing the Internet/intranet to a distant server farm. This solution is transparent to the end user or the origin server and offloads both the origin server farm and the WAN. By transparently caching inbound requests for content, the content engines can offload a significant amount of traffic and TCP connections from origin servers. Benefits: • Accelerated content delivery • WAN bandwidth savings (25–60%) • Protection vs. uncontrollable bottlenecks • Higher employee productivity Web Hosting Service and Opportunity Description 2339 12/2000 Figure 16: Transparent Caching W Sr e e evr b N Rq ir d o eu e C a g st hne o Bo s r o r we s r Oig S r e s r in e v r I tre ne n t C c C ne t is o o t n E g es n in ( ) C ne t E g eF lf S be u n Rq e t f rS m C ne t o t n n in u ills u s q e t e u s s o a e o t n For more information about cache engines 500 series For more information about content engines 500 and 7300 series 5. Intelligent Network Services A full CDN solution is based on and enhanced by the capabilities of the core IP network infrastructure. Key Layer 3 services of the core are required to deliver a highly available, scalable, and secure CDN. Services such as QoS, security, virtual private networks (VPNs), and multicast inherent in Cisco IOS software are key in delivering the complete solution. The CDN depends on a core that can deliver QoS for content distribution and access. Layer 3 security features such as IP Security (IPSec) encryption are important for service providers to deliver content securely. Cisco core networks built on Cisco IOS software enable effective deployment of new applications and services quickly and without disruption—applications and services that enable its customers’ businesses to generate revenue, reduce costs, and improve customer service. Backbone routers: Web Hosting Service and Opportunity Description 2439 12/2000 Cisco 7500 series The Cisco 7500 series includes the following routers: Cisco 7505, Cisco 7507, Cisco 7513, and Cisco 7576. The Cisco 7500 series routers support multiprotocol, multimedia routing and bridging with a wide variety of protocols and any combination of Asynchronous Transfer Mode (ATM), Basic Rate Interface (BRI), channel attachment, channelized E1, T1, and T3, Ethernet, Fast Ethernet, Fiber Distributed Data Interface (FDDI), High-Speed Serial Interface (HSSI), multichannel, Primary Rate Interface (PRI), Packet over OC-3, synchronous serial, and Token Ring media. For more information about the 7500 series routers Cisco 12000 GSR The Cisco 12000 series gigabit switch router (GSR) is the premier routing product family from Cisco Systems designed and developed for the core of service provider and enterprise IP ba ckbones. The GSR family includes two models: the Cisco 12008 and Cisco 12012. The Cisco 12000 series GSR products are architected to meet the bandwidth, performance, services, and reliability requirements of today's IP core backbones. For more information about the 12000 series GSRs Cisco Secure PIX Firewall Series Formerly known as the PIX Firewall, The Cisco Secure PIX® Firewall series delivers strong security in an easy-to-install, integrated hardware/software appliance that offers outstanding performance. The series allows you to rigorously protect your internal network from the outside world—providing full firewall security protection. For more information about the Secure PIX 500 firewall Service Offerings by Customer Segment There is a spectrum of outsource features a service provider can provide in a Web hosting service, including connectivity, hardware management, security, network management, and performance reporting. By incorporating into your architecture content replication and load balancing features, you will be able to offer high-availability, high performance sites. Consider:       Load balanced sites are necessary for Ecommerce sites since bad response times means a reduction in return visitors Optimized applications and server availability to users Localized traffic means less backbone capacity required by the ISP Content replication and load balancing are crucial for global site management and performance Eventually, mirroring also will enable content providers to incorporate local languages and to increase advertising banner usage by selling to local advertisers Premium fees are chargeable Web Hosting Service and Opportunity Description 2539 12/2000 In the spectrum of Hosting services solutions, some are more suited for different types of customer segments. Below is a summary: Figure 17: Services by Customer Matrix 6.1 Basic Hosting Basic service:  Shared server space (charges per MB of storage) or dedicated server (leased)  Bandwidth and storage  System monitoring  24x7 support and security  Disaster recovery  Transfer limits (volume of traffic in GB, incremental charges for overage)  Reporting and remote admin tools Web Hosting Service and Opportunity Description 2639 12/2000 Value add:  Templated or basic E-Commerce packages  Secure transactions  Services (programming, monitoring, commerce tools) 6.1.1 Customer Segment and requirements The primary target is: Small business who  Lack IT experience  Are price sensitive  Desire minimal complexity, desire packaged solutions 6.1.3 Customer Benefits  Improved service availability  Web presence at an economical price  Fast implementation 6.1.4 Pricing Hosting service providers generally charge for their services based on the bandwidth and storage space made available to a customer. Basic e-commerce packages are sometimes bundled in the service offering. Figure 18 illustrates the average pricing for different hosting services, expressed as perserver cost on a monthly basis. As evidenced by the data, services that are higher on the value chain are more highly priced. Figure 18: Pricing matrix Web Hosting Service and Opportunity Description 2739 12/2000 6.1.5 Positioning Basic web hosting sites are primed to become E-Commerce enabled. cornerstone for Ecommerce sites: reliability, availability, and scalability. Your solutions offer the Your vertical integration, application expertise, and customer support are just a few example dimensions for differentiation. 6.1.6 Market Delivery and Channel Strategy  Bundle with transport services  Sell through ISVs and VARs 6.2 Collocation Customer provides server, OS, and applications management. Your service should provide:  Space  Internet bandwidth  Racks, cages, physical security  24x7 support and security  Backup Power  Network redundancy  Network and server monitoring  Multiple private peering  Remote administrative tools  Disaster recovery Web Hosting Service and Opportunity Description 2839 12/2000 Value Add Services:  Tape back up  Bandwidth on demand 6.2.1 Customer Segments and Requirements The primary targets are: Enterprise Large Dotcoms ASPs who are  IT Savvy  Want to maintain control of applications, but recognize the value of outsourced bandwidth management and security of physical space Internet commerce demands:  Highly available  Traffic scaling  Security  Predictable response Ecommerce services must be offered in a highly available, scalable, and secure fashion. Availability is generally measured as a percentage of service uptime—usually above 99 percent. Scalability is measured in terms of the ability to not only grow to meet demands, but to also accommodate dynamic ―flash crowds,‖ provide adequate response times to meet user expectations, and support continuous deployment of new managed services in a non-disruptive fashion. Finally, providing a secure service enables safe business transactions for customers and protected content. A satisfying end-user experience is key for successful hosting services. If response times are long or if the user experiences errors or transaction failures, the user will simply move to another site where service is better and his expectations will be met. 6.2.2 Customer Benefits     Reliability of network Scalability of bandwidth Secure environment Cost savings on physical environment 6.2.3 Pricing Web Hosting Service and Opportunity Description 2939 12/2000 Hosting service providers generally charge for their services based on the bandwidth and storage space made available to a customer. Basic e-commerce packages are sometimes bundled in the service offering. Collocation service providers typically apply additional charges for rack space leased by customers. Meta Group illustrates the average pricing for different hosting services in detail, expressed as per-server cost on a monthly basis. As evidenced by the data, services that are higher on the value chain are more highly priced. Figure 19: Hosting Services Fees Source: META Group, 2000 Web Hosting Service and Opportunity Description 3039 12/2000 6.2.4 Positioning By deploying a CDN network, you can provide accelerated performance and responee times for Web and E-commerce applications. Your services provide for scalability, reliability and security necessary for critical applications. 6.2.5 Market Delivery and Strategy   Joint marketing with ASPs, SIs and VARs Bundle with transport - direct sales 6.3 Managed Hosting Also referred to as "Advanced"  Managed server  OS Web software, configuration and management  Network management  24x7 system monitoring and support  Remote monitoring  Storage and backup  Security Value -Add Services  Service support for ASPs  Back-end network integration  Site design  Fault tolerance through load balancing  Predictable response through web caching  Ecommerce transaction assurance through connection "stickiness"  Premium Ecommerce shopper service through cookie-switching 6.3.1 Customer segment and Requirements The primary target segments include: Enterprise Medium Dotcoms Who Web Hosting Service and Opportunity Description 3139 12/2000     Are in fast growth mode Have increasingly complex Web requirements Have limited or stretched IT experience Need may need to tie-in backoffice integration in order to expand e-commerce opportunities Internet commerce demands:  Highly available  Traffic scaling  Security  Predictable response Ecommerce services must be offered in a highly available, scalable, and secure fashion. Availability is generally measured as a percentage of service uptime—usually above 99 percent. Scalability is measured in terms of the ability to not only grow to meet demands, but to also accommodate dynamic ―flash crowds,‖ provide adequate response times to meet user expectations, and support continuous deployment of new managed services in a non-disruptive fashion. Finally, providing a secure service enables safe business transactions for customers and protected content. A satisfying end-user experience is key for successful hosting services. If response times are long or if the user experiences errors or transaction failures, the user will simply move to another site where service is better and his expectations will be met. 6.3.2 Customer Benefits  Rapid scalability  Reliability  E-Commerce and other state-of-the-art applications deployed in a timely manner  Managed complex network and security requirements  Managed Web performance and network bandwidth  Controlled costs  Quick response times on content delivery 6.3.3 Pricing Hosting service providers generally charge for their services based on the bandwidth and storage space made available to a customer. Basic e-commerce packages are sometimes bundled in the service offering. Collocation service providers typically apply additional charges for rack space leased by customers. Similarly, advanced hosting providers would set higher fees for hardware integration and complete system management. (see figure 18 and 19) 6.3.4 Positioning Web Hosting Service and Opportunity Description 3239 12/2000 By deploying a CDN network, you can provide accelerated performance and response times for Web and E-commerce applications. Your services provide for scalability, reliability, security and availability necessary for critical applications. Your vertical integration, application expertise, and customer support are just a few example dimensions for differentiation 6.3.5 Market Delivery and Channel Strategy Direct Sales Joint marketing with ISVs Joint marketing with SIs 6.4 Custom Hosting       Superset of dedicated Customized application development and back-end systems integration Consulting, design, configuration and management Integration of web based front office and back-end legacy systems Highly customized design and architecture Large scale one time web event Value add:  Fault tolerance through content replication  Web hosting data center redundancy (disaster recovery) through DD  Predictable response through content delivery/ caching  Localized globalization of sites Regional or global distribution  Transparent IP service load distribution between Web Hosting data center  SLAs  Serving higher bandwidth and rich media applications locally to users 6.4.1 Customer Segments and Requirements The target segments are: Enterprise with legacy systems Web Event Sponsors 6.4.2 Customer Benefits   Rapid scalability Reliability 3339 12/2000 Web Hosting Service and Opportunity Description  E-Commerce and other state-of-the-art applications deployed in a timely manner  Managed complex network and security requirements  Managed Web performance and network bandwidth  Controlled costs  Quick response times on content delivery 6.4.3 Pricing Hosting service providers generally charge for their services based on the bandwidth and storage space made available to a customer. Basic e-commerce packages are sometimes bundled in the service offering. Collocation service providers typically apply additional charges for rack space leased by customers. Similarly, advanced hosting providers would set higher fees for hardware integration and complete system management. Customized hosting requires integration with legacy systems or highly customized designs and configurations, and consequently such hosting services command the highest premiums. (see figure 18 and 19) 6.4.4 Positioning By deploying a CDN network, you can provide accelerated performance and response times for Web and E-commerce applications. Your services provide for state-of-the-art technologies for scalability, reliability, security and availability necessary for critical applications. Your vertical integration, application expertise, and customer support are just a few example dimensions for differentiation 6.4.5 Market Delivery and Strategy   Direct sales Joint Marketing with ISVs and VARs 6.5 Hosted Applications (see ASP Service and Opportunity Description)        Hoster assumes responsibility for all aspects of the application Blend of co-lo and dedicated services used for an internal Web site (ie HR info) Application deployment Business process consulting System integration Application implementation and management Preferred application server access for premium service clients Web Hosting Service and Opportunity Description 3439 12/2000 6.5.1 Customer Segments and Requirements Enterprise with legacy systems Web Event Sponsors 6.5.2 Customer Benefits    Single point of responsibility Reliability Cost savings 6.5.3 Pricing Your administrative fees and software monthly fees dependent upon the scope of the client's project. 6.5.4 Positioning Your vertical integration, application expertise, and customer support are just a few example dimensions for differentiation 6.5.5 Market Delivery and Strategy   Direct Sales Joint marketing with ISVs and VARs 7 Reference Table Cisco Product Information Content Distribution Manager Distributed Director Content Routers Content Switches - CSS 11050 http://www.cisco.com/warp/public/cc/pd/cxsr/c xdimn/index.shtml http://www.cisco.com/warp/public/cc/pd/cxsr/d d/ http://www.cisco.com/warp/public/cc/pd/cxsr/c xrt/index.shtml http://www.cisco.com/warp/public/cc/pd/si/110 00/prodlit/cs105_ds.htm Web Hosting Service and Opportunity Description 3539 12/2000 Content Switch - 4840G Cat 6000 series Local Director Cache Engine Content Engines http://www.cisco.com/warp/public/cc/pd/si/casi/ ca4800/prodlit/4840_ds.htm http://www.cisco.com/warp/public/cc/pd/si/casi/ ca6000/index.shtml http://www.cisco.com/warp/public/cc/pd/cxsr/4 00/index.shtml http://www.cisco.com/warp/public/cc/pd/cxsr/5 00/index.shtml http://www.cisco.com/warp/public/cc/pd/cxsr/5 00/prodlit/cds_ds.htm http://www.cisco.com/warp/public/cc/pd/rt/120 00/index.shtml http://www.cisco.com/warp/public/cc/pd/rt/750 0/ http://www.cisco.com/warp/public/cc/pd/fw/sqf w500/index.shtml http://www.cisco.com/warp/public/779/servpro/ services/webhosting/ http://www.cisco.com/warp/public/cc/pd/si/110 00/prodlit/cswnd_wi.htm Cisco 12000 series GSR Cisco 7500 Series PIX Cisco Hosting Resource Site CDN White Paper Web Hosting Service and Opportunity Description 3639 12/2000