I spent a couple of days in Austin at HostingCon, meeting with a broad cross-section of the hosting community.  Rackspace CTO John Engates and lots of other “Rackers” were there to promote OpenStack.  Most of the other big mass-market shared hosters were there too – like The Planet, Hosting.com and others.  Then there were lots of little guys.  Small hosting resellers, guys with a couple thousand feed of space inside a larger data center, etc.

A good 40% of the conference content was about cloud.  But for people in the cloud business for the past few years, it might have felt a lot like 2007.  Lots of very basic information being shared/discussed, and a whole bunch of people who don’t know or don’t want to know.  I stopped by the cPanel booth in the expo.  cPanel is the #1 hosting control panel for this shared hosting business, with a gazillion hosters using their stuff.  I asked one of their exectutives if they were going to make it easy for their customer to move to a cloud model?  “Customers are asking us, but then we ask them what they mean by cloud and as soon as they can give us a straight answer maybe we’ll do that,” was his reply.  Okay, that’s a failure to lead if I ever saw one.

Some of the guys who do have clouds, like Hosting.com’s vCloud Express, are seeing substantial uptake in this new (to them) market.  Clearly we should be expecting a new wave of clouds to start appearing in the next few months.  The average revenue per user (ARPU) of cloud is so much higher than shared hosting, they can’t let it pass them by.  However, most of these guys are going to struggle to get there with a general lack of capability to develop what they need to make this work (given that none of the “cloud stack” solutions on the market today are as plug & play as a cPanel and require a lot of knowledge, skill and investment to get running).  Uh, opportunity calling??

I did learn a lot about the business models these guys are used to, which are somewhat different than what we’re all comfortable with in the cloud space – a flat fee per user /per module/capability used per month is a good summary.  Basically, you make money when the hosting guys are selling, not when they have servers that are ready but not being used.  The $xxx / year / socket model won’t work for these guys.

Another big part of this market is the hosting reseller business.  Something for the cloud guys to consider.  A little host called SingleHop actually ran a session about reselling their cloud, and ReliaCloud from MN was looking to do the same.  How many ways can you slice and dice it.  That brings me to a point about VMware and their VSPP program.  It won’t fly for long in this market at the current prices.  There’s not enough margin left for the reseller business – which is a huge issue here.

So, that’s about it from HostingCon 2010.

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