The Future Of Small Web Hosts In The Cloud Era

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?