The public clouds are yet to have a significant impact on the enterprise market but it has built up its success among the startups and SMBs who are more interested in the cost savings offered by the clouds. The success of Amazon stirred up the hosting provider market big time. Some of the big hosting providers like Rackspace and Softlayer are already into the cloud game with some kind of "public cloud infrastructure" which competes with Amazon on the basis of cost, if not the features. Then there are some really big players like Savvis who use their managed hosting muscle to jump into the private cloud market for the enterprises. The ones who face the biggest threat from the success of Amazon and other public cloud providers are the small web hosts. They face a realistic possibility of extinction in the near future.

Smaller web hosts usually have their own datacenter(s) or co-located with other datacenter providers. They never had the resources to build large scale, geographically redundant farms like the ones Amazon and Google had built. As a result, they cannot offer the same kind of cloud economics like the big providers. This has led to a situation where the imminent extinction of small web hosts has become a realistic possibility.

Sometime back, I had a chance to talk to Eric Mandel, the CEO of Blackmesh. They are a small hosting provider based in Virginia offering managed hosting, managed services and some advanced small business solutions like virtualization solutions, disaster recovery, etc.. They also offer Optimized Drupal Hosting Platform, specifically designed to provide reliable, scalable hosting capabilities for Drupal-based Web sites. They fit the description of a small web host serving SMB customers.

I asked Mr. Mandel about their plans for the cloud era and he told me that beginning next year, they plan to offer some sort of a private cloud offering directed towards SMB sector. They are building a hardware solution to offer private clouds that will offer the reliability, security and performance needed for businesses. He also mentioned that they are going to focus on overcoming some of the I/O barriers in certain public cloud offerings. When I pushed him on the scalability aspects, he admitted that they may not be able to offer the so called "infinite" scalability like the Amazon clouds but they can offer near instantaneous provisioning for double or triple the usual peak demand and they can also do their best to add more resources in the shortest possible time. He reasoned out by saying that most of the small businesses don't need such sudden surge like some of the enterprise customers. I suppose their "private cloud" offering could be a cluster of high performance hardware coupled with a management layer. He told me that they are still in the early stages of designing their architecture and it is too early to predict what their final offering will be.

I, then, talked to Mr. Mandel about the threat posed by Amazon and others to their business. He told me that even though they are planning to offer some kind of cloud offering, their core focus is on service. If we imagine a Steve Ballmer kind of dance, it will be a dance with "service, service, service,........" as the mantra. He pointed out that they are targeting a niche customer base who want more than just the economics of the public clouds. The small businesses cannot afford to have an IT department like the enterprises. For them, the so called self service provision of public clouds are not all that attractive. They need a provider who can support them completely with their needs. They cannot get that kind of a support from a public provider like Amazon. In fact, it will be very tough for a small business customer to even reach the Amazon support team.The CEO of Blackmesh told me that these are the customers they are catering to. They offer complete support from the network perimeter level to the server to the LAMP stack to, even, proprietary components in the applications they host. Mr. Mandel told me that no public cloud provider offers this level of support because they cannot afford the cloud economics with this level of deeper support. He said this is going to be their differentiator in the cloud game.

To me, it makes complete sense and this need for a deeper support in the clouds opens up opportunities not only for small web hosts like Blackmesh but also to many organizations that offer outsourced technical support for instances running on Amazon EC2 and other cloud providers. The SMB customers may like cloud computing for its elasticity, rapid provisioning, redundancy, etc. but they also need the support offered by smaller web hosts and other service providers so that they can focus on their core business. As long as such niche customers exist, we may not see the species like small web hosts go extinct. What do you think about the future of small web hosts?