Hosting 365

Fergus Burns is organising a Geek Dinner next Wednesday evening at 8pm in the Market Bar. More details on the Web2ireland blog.

It’s a pre-SaaS event dinner … for anyone interested, Enterprise Ireland are running a Software-as-a-Service Event the next day in Dublin City Centre, kicking off at 8.00am - more info here - attendance is free.

Why are we interested in this? Well … SaaS is predicted to grow massively over the next few years as more and more software companies take advantage of the Internet as a delivery platform for applications. And of course ‘We Power the Internet’. Not universally true … but we do power businesses on the Internet.

We call ourselves an ‘Internet Infrastructure Provider’ which means we are the mechanism that powers SaaS applications - without hosting companies like us, software development companies would have to provide their own Internet connectivity - which I can tell you is expensive, especially if you want it to be resilient and redundant - which is hugely important for SaaS if sellers of this model want prospects to seriously consider it as a viable replacement for locally installed software.

Gartner reports (no link, sorry, read it on REAL paper!) that the role of the CIO is to change from being predominantly internal in focus to a more external outlook, challenged with helping company competitiveness and growth.

The report peaked MY interest because it 2 of the technologies it mentions that will be key in 2006 are ‘mobile workforce enablement’ and ‘collaboration technology’. Guess what? They’re both hosted applications, or ones that hosting will play the part of facilitator and infrastructure provider to.

Collaboration can only really be achieved thru on-line applications. The days of the shared network drive are dying (thank goodness!) and hosted applications are providing a variety of functionality (enterprise management, customer relations, logistics - now even desktop applications like email, word processing and project management). Technologies such as blogs and wiki’s allow companies to communicate and share project / product / business information internally or externally. The primary benefit of these is access-anywhere, and edit without local application requirements.

Which leads nicely to the second technology - mobile workforce enablement. The CIO’s role will be to provide the hardware and software to facilitate an increasing mobile workforce. It’s no longer only sales reps and maintenance workers that are out-of-office, teleworking, offices at multiple locations (and outsourced offices or managed services providers located off-site) and just keeping in touch with the office out-of-hours. This means providing services like push-email, portable phone numbers, and access to what were traditionally in-office applications like file servers, CRM and Enterprise software.
On the business side, the report states that one of the key 2006 priorities will be controlling enterprise operating costs. Music to MY ears! The model we take allows CIO’s to procure a high-end cluster of dedicated servers with hosted office applications, disaster recovery options and managed services support (or any customisation of that of course, up or down scale), for a monthly fee that is a fraction of the captial expenditure normally required. That model saves CIO’s both cap-ex costs, and internal staff resources. Hey, of course we make money off it to, it’s the outsourcing business model - providing Internet Infrastrucutre and associated services are OUR core features, not yours, so why try to build it yourself when we’ve invested millions in people and facilities? Just like we don’t try to write our own operating systems for our servers, we’re quite happy to use best-in-breed systems that already exist!

I think hosting companies will move aggressively into this space - building on their data centre infrastructure to provide value-added services and pre-packaged solutions. It’s a win-win for both customers and the hosting company as they have the expertise and facilities to provide the hosted applications CIO’s will need to enable the key drivers of changes mentioned above.

There’s been lots of talk in Bubble 1.0 and Bubble 2.0 (that’s now!) about SaaS : Software as a Service (i.e salesforce.com, Microsoft Live), and it seems now that business, software and infrastructure have caught up with the IDEA of it, SaaS companies are becoming successful.

I came across an article by Nicolas Carr (of ‘Does IT Matter‘ fame) called ‘Here comes HaaS‘ and it strikes me that the dedicated servers model we use (and many other data centres) is exactly this.

Google Define doesn’t have a technical definition for it, so I’ll explain it here in plain English, or I’ll try! Rather than purchasing a server, installing your OS and other applications and connecting it to the Internet (all of which involve capital expenditure, and are on-going labour intensive), HaaS means for a monthly payment that is a fraction of your normal cost, a business can lease a server, with managed services support, standard OSes and bespoke application deployments, and a boat-load of connectivity.

For example, we sell a dedicated server - your own machine, which you can do with as you please (within reason on course, we have an acceptable use policy), install OSes and applications, and provides you with fast (and lots of) bandwidth - for only 59.95 a month! When I joined here first I couldn’t believe that, if I add the cost of buying my own computer and a simple broadband connection, if would be more than this a month, and my own machine in a data centre for this cost - WOW! Of course NOW saying that makes it look like I’m pimping our own products!
What’s important to know about Hardware as a Service is that it’s really relevant to you. Why? It takes away pain, it saves money, it provides access to dedicated resources (people and infrastructure). Moreover, I believe Haas is the enabler that will change the face of Software-as-a-Service. With Microsoft’s SPLA licensing, which effectively makes access to high-end software a lot more affordable, and of course, the Open Source OSes and applications, using the HaaS model, a relatively small monthly fee can provide you with office server funcationality, for literally a small fraction of the cost doing it in-house would be.

Watch the HaaS space, I think it will evolve into a H+SaaS model where bundled solutions will be offered rather than just empty-shell machines. There’s a business opportunity here for software companies to package and license there applications in the H+S-aaS model, and charge on a per-user / per-domain basis.