Let us go and make our visit

My 10th grade English teacher made the whole class memorize The Love Song of J. Alfred Prufrock, a T.S. Eliott poem about... the relationship between web hosting providers and SaaS. No, really.

Do I dare
Disturb the universe?

So Prufrock is a lonely guy who is intrigued by romance but hesitates to make a move. He ponders over "a hundred visions and revisions" but ultimately concludes "No! I am not Prince Hamlet, nor was meant to be..."

Web hosting companies, likewise, are fascinated with SaaS. As 1&1 CEO Andreas Gauger tells eWeek: "web hosting is becoming more and more of a commodity play... In three or four years, SaaS will overtake the revenue we get from hosting." But in the meantime, 1&1's website calls bandwidth and web space the "core features" of its service.

After all, bandwidth/web space are traditional web hosting providers' bread and butter. At a time when the commodity hosting business seems to be humming along, is it really worth it to reach beyond the industry's shared/VPS/dedicated comfort zone?

Is it perfume from a dress
That makes me so digress?

And yet... Who can resist the allure of analysts' optimistic projections? Or Salesforce.com's $4.72 billion market cap? That's 7.27x annualized revenue compared with Web.com's 2.06x or Savvis' 2.50x. (Poor Savvis. Its valuation fell by 25% in July!) The Planet, for one, seems to be paying attention. Have you seen how "SaaS Hosting" is at the top of its Managed Hosting service catalog, four spots above "Website Hosting"?

Still, my Texan friends don't seem any better equipped to engage with SaaS developers than Prufrock is to pick up girls. The Planet's view of "SaaS business challenges" encompasses only infrastructure issues - which is only a small subset of what's on a SaaS CTO's mind. For instance, check out Bill Boebel's blog post on why Webmail.us moved its storage from Rackspace to S3. Amazon has web services he could leverage to build stuff faster!

Why can't traditional web hosting providers understand that time is sooo often more important to customers than money??

I have heard the mermaids singing, each to each.
I do not think that they will sing to me.

Speaking of Amazon, I've been told time and again that S3 and EC2 are "not web hosting". Same goes for Office Live. Or Google Apps. Or MySpace. Or Flickr. Or Salesforce.com. Or Demand Media's ChannelMe.tv. Not. Web. Hosting.

But do end users care? Do developers? 265,000+ people have signed to to build stuff on Amazon's platform. 7,000+ attended Salesforce's developer conference last year. Besides, didn't Andreas - CEO of the largest hosting company in the world - say that SaaS will overtake commodity hosting within 3-4 years?

Oh, do not ask, “What is it?”
Let us go and make our visit.

If you work for a company that's in the commodity hosting business, you could weigh SaaS risks and opportunities in Prufrock-like isolation - or come to San Francisco on September 5-7!

At last year's Office 2.0 Conference, I got to talk to hundreds of SaaS developers about their infrastructure *and* business challenges. Your product manager should have been there. And he ought to be there this year. He (and every other attendee) will get an iPhone, which might help him meet girls, even as he figures out how to lure in more SaaS customers. What could be better?

PS - Early bird registration ends on July 31; the ticket price will go up by $500 starting Wednesday. Office 2.0 is produced by Ismael Ghalimi, who is the CEO of Intalio and keeper of the Office 2.0 Database. Check out the list of SaaS providers, end users and VC investors who have already signed up. See you there! :)

Comments

[Ross Hosman]

Great post Isabel and you totally hit the mark. Traditional hosting companies aren't keeping up today with todays fast paced web 2.0 world leading sites/providers to build their own or use alternatives (i.e. EC2/S3).

One company that I think could really put a dent in traditional managed hosting is www.rightscale.com. They are going to make it easy to leverage EC2 (with load balancing) and use Amazon's S3 back end. Imagine being able to setup a 100 customized servers at the click of a button without putting out any money for infrastructure and being able to do so at rock bottom prices.

[Isabel Wang]

Hi Ross,

We *might* be able to do so at rock bottom prices :) At the moment its service is free, but-

"In the future, we will charge for our value added... We have not determined how much we will charge nor what pricing structure we will use."

Thanks for pointing them out. Will keep an eye on them!

[Ross Hosman]

No problem Isabel, they will continue to keep their base service free according to their CEO but will be charging for their more advanced AMI's which will allow you to cluster and load balance. If you are really interested contact their CEO Michael Crandell, he seems like a pretty stand up guy and is always more than willing to answer questions.