Web hosts look to managed service model

Web hosting vendors have highlighted the importance of innovation as they search for greater profitability in the sector.

Web hosting vendors have highlighted the importance of innovation as they search for greater profitability in the sector.

Speaking at a US Web hosting conference, Mark Shull, the CEO of Digex, said the Web hosting market was undergoing massive change following a lightning-fast inception in 1995 and phenomenal growth until last year.

"We are now in transition as companies struggle to come up with long-term business models which are more sophisticated," Shull added.

At the crux of those models are enterprise strategies which offer corporations hosted methods for interacting with suppliers and customers. Hosted or managed applications that are more efficiently integrated with enterprise customers' back-end systems will also play an important part.

"The Internet right now is great at connectivity, but it connects everything to a person," said Shull. "The application server now is becoming as prevalent as the Web server, and this will allow for more sophisticated integration between hosted applications and installed enterprise systems.

"Enterprises will therefore feel increasingly more comfortable turning over applications to hosters. Those applications, at first, are likely be all sorts of commerce-related undertakings, instead of mere e-commerce operations."

Although Shull painted the Web hosting industry as being poised to take off in the enterprise sector, others offered more sombre observations.

Paul Santinelli, the CEO of NOCPulse, an Internet infrastructure company, said things would get tougher for smaller hosts and managed service providers as larger players such as Digex eyed the enterprise customer base.

"The pole-climbers have come off the poles and into the data centres," said Santinelli, who also predicted that the hosting and MSP space would witness a large amount of consolidation in the next eight months.

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