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My slides for Spring ISPCON in Orlando
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Session S8 The Shift in Web Hosting
Are You on the Up Side?
David Snead ([email protected])Isabel Wang ([email protected])
Overview
Do-it-yourself vs do-it-for-meFront office/back office convergencePing/power/pipe vs new business modelsHardware vs softwareKnowledge is power
Web Hosting Targets DYI Audience
• Large amounts of bandwidth and web space
• Large numbers of databases and email accounts
• CGI-BIN/Perl/PHP…• “Install dozens of free apps”• Google/MSN/Yahoo credits• Customer must assemble
ingredients into solution
(My friend Irakli makes amplifiers by hand!)
Amazon: Do-It-For-Me Purchasing
• “Customers like you” auto-recommendations are responsible for 30% of Amazon’s sales
• Similar technology from Aggregate Knowledge helped Overstock.com generate $100M in additional revenue
• It’s profitable to help customers choose!
Google: Do-It-For-Me Apps
• Google Calendar, Google Talk and Google Docs & Spreadsheet are auto-integrated with Gmail; nothing to install
• Presentation app on its way
• Coming soon: Google Checkout and Google Base integration?
• BTW: Google Apps now has Partner Edition for ISPs
eBay: Do-It-For-Me eCommerce
• All-in-one store building and online advertising process
• Listing tool auto-generates product descriptions based on ISBN
• Built-in traffic from peer-rated buyers
(Even customers)
Online (and offline) business encompasses…• Personal productivity/data management• Collaboration/information sharing• Vendor & inventory management• Customer & transaction management• Sales & Marketing• SMBLive CEO Matt Howard says web services
providers should be facilitators for these “five conversations”
• Check out BTTradespace.com!
Front Office/Back Office Integration
eBay: End-to-end Service
• Market research: competitive sales/pricing data for $10/month
• “Featured items from favorite sellers” newsletter
• Print postage/mailing label, request pick-up and track packages from PayPal interface
Shopster: TOTAL Solution Provider
More than Ping/Power/Pipe
• Alternatives?– Pay per seat? (SaaS)– Pay per hour?
(Amazon EC2)– Pay per item
requested from web server? (Amazon S3)
– Pay per transaction? Pay % of ecommerce proceeds? (eBay)
• Overselling– Billing is NOT
aligned with customer activity
– The more resources customers use, the more hosting providers lose!
• Overselling– Billing is NOT
aligned with customer activity
– The more resources customers use, the more hosting providers lose!
• Alternatives?– Pay per seat? (SaaS)– Pay per hour?
(Amazon EC2)– Pay per item
requested from web server? (Amazon S3)
– Pay per transaction? Pay % of ecommerce proceeds? (eBay)
• Overselling– Billing is NOT
aligned with customer activity
– The more resources customers use, the more hosting providers lose!
Give it Away for Free?
• Google/Yahoo! will double or triple revenue per user within 5 years with improvements in ad targeting technology
• Average hosting provider will not see ARPU growth of 42% per year :(
Says Morgan Stanley
2006 2011
Ryan Air: “Wal-Mart with Wings”
• $300 million+ out of $3 billion annual revenue from sales of 3rd party products
• CEO wants to make all flights free within 10 years; audience monetization more profitable than ticket sales
Hardware vs Software • New technologies reduce
downtime and data loss– Virtualization– Grid hosting– Distributed storage– P2P content delivery
• “Fast hardware replacement” SLAs losing relevance. The question is not how to stay online, but what to do online
Are You a Software Company Too?
• Cisco: “We’re a software company wrapped in steel”
• eBay: 100,000 lines of new code every 2 weeks
• Software encompasses more than end user apps like PhotoShop and PowerPoint. It provides framework for business processes
BT: Phone Co or Software Platform?
• Nicholas Carr: Software kills hardware
• Web 21C API gives .NET. Java & PHP developers access to BT’s underlying telecom network
• Capabilities exposed through web services include SMS, voice call, conference call, mobile subscriber location…
Introducing the SLDN!
• With SoftLayer’s open API, developers can integrate provisioning, remote reboot, bandwidth graphs, etc into control panels, third-party applications and even corporate intranets
• “SoftLayer is evolving into a software oriented company”
Knowledge (via Software) is Power
• Google CEO: “personalization is the future”
• Quantcast CTO: “eCommerce is destiny”
• MIT Media Lab: can predict your schedule with 79% accuracy
Marketing is NOT Game of Numbers
• Amazon: auto-recommendations responsible for 1/3 of sales
• Aggregate Knowledge: drove $100M in additional sales on Overstock.com
• Robot Replay: captures website visitors’ mouse movement – what if data were used to optimize site config on the fly?
• Staying competitive = thinking beyond one-size-fits-all ads, website content & service plans
