What’s Next in Web Hosting?Isabel Wang and David Snead

May 8, 2007

What's Next in Web Hosting?2

Web Hosting As We Know It

• Data Centers• Colo Cages• Racks • Dedicated Servers• Reseller Accounts• Shared Hosting

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One Simple Formula

Web Space + Bandwidth = Monthly Fee

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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

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“What We’re Paying”

(Source: The WHIR)

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What We’re Getting

Source: Google Trends

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Meanwhile, In The Outside World…

Web Hosting vs Wiki

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As Serguei Says, Virtualization *IS* The Future

Dedicated Servers vs Virtualization

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New Form Factors

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“Where Do You Want To Compute Today?”

Source: Presentation by Microsoft Windows Live Architect James Hamilton

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“Your Data is Everywhere And Nowhere”

Participants include Hostway, Softlayer and The Planet

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Large User Base = High Capacity Network?

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New Assets

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“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.”

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DreamHost vs TheWHIR

Fun fact: The 10 highest traffic web hosting providers each have more reach than the 10 highest traffic web hosting directories.

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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.”

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New Product Units

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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

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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

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New Communication Strategies

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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

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Knowledge is Power: Three Case Studies