Excerpt from the report: "The study found that smaller HSPs have net profits of over 15% and an annual growth rate of 50%-100%. These companies are aggressively launching new hosting products, implementing technologies to automate different aspects of their business and need a way to keep operational costs low while driving profits up."
"Information Technologies are not hyped anymore. It's now considered a normal industry, with potential to be a very profitable market segment." says Serguei Beloussov, CEO of SWsoft. "Despite rocky times in the stock market, it's widely acknowledged that the Internet is useful and here to stay. All businesses, even the smallest ones, will have some sort of Internet presence. Eventually, all will require dynamic e-commerce sites. Smaller HSPs achieve high profits and fast growth because they are flexible and efficiently sell personalized services to the millions of SMBs that will require web sites in the next few years."
SWsoft found that the largest growth sector was among smaller hosting businesses, a market segment that reporters, analysts and other influencers have traditionally ignored. In the US alone, there are thousands of small HSPs, run by young entrepreneurs like study participants Jordan Lowe and Daniel Brosk of Server Central Network (http://www.servercentral.net).
While still college students tinkering with a single 1U server, Lowe and Brosk offered hosting services for friends and local businesses, quickly growing their business to over 10,000 accounts on hundreds of servers. Low overhead and aggressive customer acquisition made them profitable from the start. To scale their business, they switched from manual billing and new account creation processes to HSPcomplete's full business lifecycle hosting automation solution, enabling them to reduce account creation time from 45 minutes down to zero, reduce management time of account receivables by 30%, and to process customer billing in minutes rather than weeks.
"While not as glamorous as the high-end of the market to some, the shared, VPS and low-end dedicated hosting sector truly represents the "mass market" of hosting when it comes to the pure volume of opportunity," wrote Joshua Beil, VP Research and Development for Tier1 Research in the report, 'Mass Market Hosting.'
Jackie Yung, founder of OnSmart Networks (http://www.onsmart.net) and participant in the study, added, "I launched a hosting service with $10,000, and from day one used an advanced automation system with redundant hardware to offer a range of complex service plans, including Virtual Private Servers and managed application hosting packages. HSPcomplete is so customizable and extendable that I decided to use their unified management platform for all hosting accounts - shared, VPS, dedicated."
HSPcomplete - Everything but the kitchen sink. . .
Unlike simplified controls panels such as Plesk, C-Panel, and WEBppliance, HSPcomplete is a full-business life-cycle solution that includes integrated billing, automated account creation, anonymous reseller channel management, hundreds of control panels and the ability to manage a wide range of hosting accounts - shared, VPS, and dedicated. This automation solution is often too expensive for smaller HSPs, who are forced to develop only a portion of the components (i.e. control panels) on their own.
Designed for Global Hosting - New Packaging to Meet Needs of SMB-Centric HSPs
"During extensive discussions with partners and customers, we recognized the need for a package that fit with the budget of smaller HSPs. We added modular and scalable architecture to our $100,000 Global HSP Package to better service the needs of entry-level to mid-sized hosting providers," said Craig Oda, VP, Business Development, SWsoft.
Working to help smaller customers grow their businesses, SWsoft released a $5,000 promotional package for a no-compromise solution which provides the infrastructure and tools necessary to run a fully automated hosting business. Highlights include:
Comprehensive billing system integrated with automated new account provisioning and the ability to handle usage-based charges and promotional discounts Virtuozzo(TM) licenses that allow HSPs to partition servers to offer both Virtual Private Server customers with dedicated-like features (dozens per machine) or shared hosting accounts (hundreds per machine) Full licenses for all HSPcomplete modules (directors) Professional implementation and one-year of support Reseller capabilities that can be re-branded to fit the look and feel of the reseller Comprehensive suite of secure web-based control panels for customers, end-users, resellers, and HSP staff.
Currently using the HSPcomplete 2.0 solution as the backbone of his hosting operations, Todd Robinson, CEO Penguix (www.penguix.net), is able to support hundreds of customers and resellers on a single server and manage all system resources from a series of sophisticated user interfaces.
"I was previously using too many resources on developing in-house control panels and integrating third-party tools, but now with HSPcomplete, I can focus on sales, marketing and services to increase my revenue," said Robinson. "I especially liked the flexibility of the OS and application templates which allow me to offer custom applications for purchase and provision applications online. The seamless integration with billing is important, as my customers are automatically billed for purchases with minimal work on my end."
SWsoft will present study results -- HSP problems, cost structures, third-party software requirements, bandwidth and hardware usage, and business models - in a free Web seminar titled "The New Face of Web Hosting." For more information, see http://www.sw-soft.com/en/seminar/