Last week in NYC, I spoke at a Wall Street conference to a room full of institutional investors, at a seminar hosted by the Information Management Network on where investments in data centers and Cloud infrastructure should be made. From the stage, I got a chance to share my thoughts on where the hosting industry is going.
This industry is bifurcating into two separate industries, both of which can have success if they play their cards right. Those who don’t pick a side are going to fade away and disappear. It’s pretty evident. What used to be the web hosting industry is becoming:
1) The Internet infrastructure as utility companies (like Amazon Web Services (AWS), Google and Digital Ocean)
2) The managed services companies
Companies like ServInt used to be able to be ‘general stores’ working to provide services to a general population. Then the big companies got into this space, pushing economies of scale for raw infrastructure. If RAM and CPU are all you need and you can figure out the rest, they became a good bet.
Word on the street at that point was that most of the reported 35,000 or so web hosting providers would start to die off in the face of guys like AWS. That hasn’t happened. Why’s that?
The Cloud doesn’t make things easier, it makes things harder. Your big decisions used to be whether to go for shared hosting or a dedicated server, and if that dedicated server should have RAID. Now there are millions of options and – unless IT is your job – you need specialists who can guide you through what you need and how to most efficiently set it up. You need a trusted advisor.
The reason companies like ours are succeeding is that we aren’t trying to push server specs anymore, selling RAM & CPU to a general market. We are letting AWS and its peers have that market. We are engaging with companies who we’ve proven we can earn digital success for and are building managed solutions for them. Companies like ServInt build infrastructure, but that’s so we can be hands-on with the resources that we build for companies. Our role is the trusted advisor. That is why people turn to companies like ours: To help them navigate and find peace of mind in the complex and confusing Cloud. We may sell hosting, but that is just a part of our true service: A way out of the complicated Cloud so people can focus on the digital success of their business.
By focusing on expertise over infrastructure alone, ServInt and organizations like us see great success and put ourselves in a position to help. In a way, our ‘managed services’ become custom IT consulting projects designed to maximize the successes of the companies we do businesses with. By adopting this strategy, companies like ServInt are successfully shifting from being ‘general stores’ to being boutiques going after specific clientele. Since there’s no shortage of need for smart people solving hard problems – and that’s what we do – this modern strategy is infinitely scalable, reproducible and a recipe for ongoing growth and success.
Photo by Torkild Retvedt.