Website Hosting According to Website Hosts

If you are in a web-based business such as search marketing, search
engine optimization, web design or web development, you are largely
dependent on website hosting customers to drive your business forward.
In other words, the first step in needing SEO is to actually have a
website online. Similarly, web designers and developers are often the
first vendor called upon when a business creates a new website.
Therefore, if the website hosting business is thriving – this portends
a bright future for these ancillary businesses. If the website hosting
business is contracting, then businesses that depend on website owners
may suffer as well.

In order to gage the current business environment for web hosting,
and to forecast what’s ahead in terms of economic recovery WebProNews
reached out to website hosting professionals to get their read of the
business realities in place today. We also asked when these experts
foresaw a robust recovery happening. Here is what they had to say in
their own words.

Daniel Foster is Co-Owner at UK website hosting company
34SP.com in Manchester, United Kingdom. The company has served tens of
thousands of web hosting customers over the past tens years in the UK
and beyond. Mr. Foster opined, ”In the UK we have seen some signs of
recovery in the small to medium sized business sector already. The
inaction due to uncertainty over the future business climate has eased
a bit, and we see businesses adding to their web portfolios at a more
rapid pace. Particularly in the reseller and web developer areas of
our business, there is increased activity. While no one would call the
modest recovery to date a ”full” recovery, we’re optimistic that
2010 will bring another level of spending and business growth.

As a web hosting company – we feel that small to medium sized
business clients should prepare now for a full recovery by initiating
any web-based projects sooner rather than later. Often, websites are
delayed beyond expected launch dates, so having plenty of extra time
for online projects is often a benefit. Additionally, by having a
website live one begins to learn about the audience, and begins the
lengthy SEO steps necessary to have decent search engine rankings.”

SmarterTools is an information technology management software company
that builds applications to simplify and automate the day-to-day
operation of business. With a diverse product line, SmarterTools has targeted various small
businesses, Web hosts and Internet service providers and has grown its
install base with customers in over 100 countries. The company
provides software for hundreds of the top web hosting companies
worldwide. Tim Uzzanti, CEO of SmarterTools had this to say about the
economic conditions facing the company and its customers,
”SmarterTools has been fortunate enough to maintain growth throughout
these challenging economic times. One of our core marketing
objectives is to position our products to deliver value with leading
feature sets, high reliability, and low total cost of ownership. This
message gains additional traction when SMBs and service providers are
facing cost pressures in competitive markets. One successful channel
used to deliver this message directly to SMB’s is our marketing
partnerships with hosting companies that provide hosted websites and
IT services.

The economy is putting pressure on many hosting companies that haven’t
established a brand. And with the introduction of platforms such as
Microsoft Azure, application hosting may slowly replace shared
hosting-creating additional competitive pressures. As shared hosting
continues to churn, VPS/Dedicated hosting and Custom/Management
environments should continue to grow and the arrival of flexible Cloud
environments will undoubtedly facilitate that trend. There are
additional obstacles. For example, with declining margins, most
hosting companies can only absorb so much and recently proposed
Microsoft SPLA licensing changes could cause significant issues for
Windows hosting companies. Although I firmly believe the hosting
industry will recover and continue to thrive, it will almost certainly
look different than it does today.”

MaximumASP is a Microsoft Gold-Certified Hosting Partner which
specializes in managed hosting services. In other words large, complex
deployments often consisting of large server clusters for complex
web-based applications. Stacy Griggs is Vice President of Sales with
MaximumASP managed hosting and offered this
insight, ”The evidence I am seeing tells me we are already well into
an economic turnaround. At MaximumASP our third quarter new sales
bookings have increased 44% from the first quarter of this year. We
are on pace to have record year, while our full year growth rate isn’t
as brisk as it was in 2008, our Q3 and Q4 of 2009 look to
significantly outpace the same periods from last year.

Now is a great time to build capacity, good companies have been
investing through the this economic cycle so that they can fully
leverage the upturn. As an example we are completing construction of
a 33,000 sq ft. colocation and hosting facility in Louisville, KY.
This will increase our capacity to provide service by 400+% and allow
us to add colocation as a new service offering. Because of the
downturn we paid less for the equipment and have vendors fighting over
our business. This investment is already paying dividends, our sales
pipeline is the largest its ever been and we have numerous customers
who have already purchased our new colocation services.”

David Snead is an attorney who works exclusively
with companies and individuals involved in the infrastructure
supporting the Internet and those who create and distribute products
and services electronically. In other words, Mr. Snead works with
dozens of the world’s largest and most influential web hosting
companies as outside legal counsel. Based on what Mr. Snead sees, he
is forecasting a full economic recovery sometime around Spring 2010.
”No new business the late summer early fall, followed by a
significant uptick in ‘discretionary’ business: AUP/Terms of Service
revisions. These revisions anticipate new business lines. This
indicates to me that customers are again moving up the hosting value
chain.

To prepare for the recovery Mr. Snead advises, ”Create a process for
new hires. Many hosts haven’t had major layoffs, but haven’t hired as
well. Many employees are operating at capacity, any major increase in
business will require new hires. It would be a bad idea to make these
hires without any preparation.”

NaviSite is a leading provider of enterprise hosting and
application services for a diverse client base. The company is
publicly held (NASDAQ: NAVI). William Toll is Director of Product
Management at Navisite. Mr. Toll offered this assessment, ”I believe
that the U.S. economy is just now turning the corner. Our SMB group
continues to see a lot of new customers coming from ISV’s that have
moved their software to the SaaS
Hosting
model to SMBs that simply, are ending the cycle of
on-premise upgrades and installations of their IT.

Now is the time to invest in a hosted deployment or upgrade to meet
recent or pending regulations and compliance needs and to prepare for
the increase in traffic and sales from Internet based initiatives.
Whether it be adding email archiving or upgrading to a managed Windows
Server 2008 server in a data center, now is a better time than ever.
It’s well known that companies that invest in IT – and make IT a
competitive advantage are better positioned after a downturn.”

Takeshi Eto is Vice President of Marketing and Business Development
at shared hosting provider DiscountASP.NET. The company is a Microsoft
Gold Certified Partner with four Microsoft Competencies: Hosting
Solutions, Security Solutions, Networking Infrastructure Solutions and
Advanced Infrastructure Solutions. In addition, the company recently
introduced ASP.NET 4.0 hosting to benefit ASP.NET
developers on the leading edge. Mr. Eto weighed in with his thoughts,
”Our hosting caters to ASP.NET developers so my thoughts naturally go
out to this special group. In this time of economic hardship, it is
even more important to continue to keep up to date with technical
skill sets. We are trying to help the .NET developer community by
offering a free ASP.NET 4.0 hosting sandbox. Developers can get early
experience on the new .NET Framework 4, Visual Studio 2010, and
One-Click Publish before their official release next
year.”

| If you are in a web-based business such as
search marketing, search engine optimization, web design or web
development, you are largely dependent on website hosting customers to
drive your business forward. In other words, the first step in needing
SEO is to actually have a website online. Similarly, web designers and
developers are often the first vendor called upon when a business
creates a new website. Therefore, if the website hosting business is
thriving – this portends a bright future for these ancillary
businesses.

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