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What’s Next in Web Hosting? Isabel Wang and David Snead May 8, 2007 Web Hosting As We Know It • Data Centers • Colo Cages • Racks • Dedicated Servers • Reseller Accounts • Shared Hosting 2 What's Next in Web Hosting? One Simple Formula Web Space + Bandwidth = Monthly Fee 3 What's Next in Web Hosting? How To Get Ahead? • 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 4 What's Next in Web Hosting? “What We’re Paying” (Source: The WHIR) 5 What's Next in Web Hosting? What We’re Getting Source: Google Trends 6 What's Next in Web Hosting? Meanwhile, In The Outside World… Web Hosting vs Wiki 7 What's Next in Web Hosting? As Serguei Says, Virtualization *IS* The Future Dedicated Servers vs Virtualization 8 What's Next in Web Hosting? New Form Factors 9 What's Next in Web Hosting? “Where Do You Want To Compute Today?” Source: Presentation by Microsoft Windows Live Architect James Hamilton 10 What's Next in Web Hosting? “Your Data is Everywhere And Nowhere” Participants include Hostway, Softlayer and The Planet 11 What's Next in Web Hosting? Large User Base = High Capacity Network? + + 12 What's Next in Web Hosting? New Assets 13 What's Next in Web Hosting? “Wal-Mart With Wings” BusinessWeek: “Ryanair's profits for the six months ended Sept. 30 soared to $422 million, on sales of $1.6 billion… Ryanair uses its website, with 15M unique visitors/month, to boost ancillary revenues. The company gets commissions from sales rental cars, hotel rooms, ski packages, and travel insurance. For the year ended Mar. 31, such ancillary revenues rose to $332 million.” 14 What's Next in Web Hosting? DreamHost vs TheWHIR Fun fact: The 10 highest traffic web hosting providers each have more reach than the 10 highest traffic web hosting directories. 15 What's Next in Web Hosting? Is Your ARPU Increasing by 42% Per Year? Morgan Stanley Says: “Significant targeting / conversion improvements could bolster annual global revenue per unique user of $9 for Google (+42%) and $10 for Yahoo! (+29%) 2-3x in next 5 years.” 16 What's Next in Web Hosting? New Product Units 17 What's Next in Web Hosting? The Industry Standard Approach • GoDaddy: 1,000 email accounts • DreamHost: 3,000 email accounts • 1&1: 2,500 email accounts • LunarPages: Unlimited email accounts • iPowerWeb: 2,500 email accounts • BlueHost: 2,500 email accounts • PowWeb: Unlimited email accounts 18 What's Next in Web Hosting? A Few Other Options • SaaS Apps: Pay Per Seat • Amazon EC2: Pay Per Hour • Amazon S3: Pay Per GB • OpSource: “Success Based Pricing” • Shopster: Hosting + Drop Shipping • MySpace: Free; made $900M in Advertising 19 What's Next in Web Hosting? New Communication Strategies 20 What's Next in Web Hosting? One Size Doesn’t Fit All Commerce: what we’re aiming for Content: reaches out to prospects Context: different info for different audience Community: gets multiple parties involved in conversation Personalization: the better to deliver the most effective sales pitch for every customer Vertical Search: better customer service + possible monetization opportunity Source: Read/Write Web’s Web 3.0 equation 21 What's Next in Web Hosting? Knowledge is Power: Three Case Studies 22 What's Next in Web Hosting? New Risks 23 What's Next in Web Hosting? New Business Models = New Definitions • What’s The Scope of Your Relationship? - Joint venture? - Partnership? - Vendor? • Document Your Relationship - Customer - Vendor - Value-added Service Provider 24 What's Next in Web Hosting? Do Your Current Contacts Work? • SLA - Not just about hardware replacement any more - How to define uptime? • AUP - How will new services be abused? - How to police conduct? • Terms of Service - Does it reflect your relationship? 25 What's Next in Web Hosting? Selling Services vs Ping/Power/Pipe • General Legal Issues • Communications Decency Act/Conduit Status - Are you creating data? - Are you manipulating data? • Contracts - What risks are you prepared to take? - Does a clickwrap contract work? - What are the customer’s true expectations? 26 What's Next in Web Hosting? Service Sales Issues • Can You Sell The Services? • Flow Down Provisions • Modify AUP/TOS • Contact With Personal Information • Are You Providing Professional Services? • Are You Providing Professional Advice? • Can You Support The Services? 27 What's Next in Web Hosting? New Privacy Paradigm • Privacy Expectations Follow Data - Synchronize with vendors - Anticipate future uses of data • Privacy Policies/Expectations Are Analyzed From Consumers’ Point of View - Draft documents in basic language - Don’t play hide the ball - Chain of custody is transparent • Understand Regulatory Requirements - Specific: HIPPA, SOX, etc - FTC: unfair/deceptive trade practices 28 What's Next in Web Hosting?
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