Hosting 365

It stuck me earlier as I was speaking to someone about equipment financial deals with suppliers and banks that the hosting model is very similar to it - although with far more added value.

A financing deal basically allows you to purchase an expensive piece of equipment - say a 5000 euro server - and pay it back over a period of time. This saves the company cash flow and also allows the company access to more ‘assets’ (inverted commas as the equipment is not as asset until it’s owned) which they will use to help grow or streamline the business.

In the case of hosted services - servers in particular, as it’s most relevant to the example above - a company can lease a server over a period of time (same benefits as above) AND get the additional benefits of managed services (staff expertise), IP connectivity (a good data centre will have lots of redundant and carrier neutral bandwidth), fast upgrades/repairs (based on agreed SLA’s), and most importantly, a hosted off-site server in a world-class data centre that can provide intra- or inter-net facilities.

I wonder then, when it comes to technology, should data centre businesses try to compete with the banks and equipment vendors when it comes to leasing deals? There is potentially no server software that can’t be provided as a hosted application now, once the customer office has a broadband (or equivalent) connection.
The hosting providers value-add is so much greater than that of a financial house, it would seem logical for IT Managers to consider this option when looking at their 2006 budget provisioning. Lower costs and increased service provision … win/win!:-)

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.