B10WH

“There is a little difference between how large companies and small businesses will utilize Cloud computing”, this is one of the conclusions which was made from lates survey conducted by Hosting.com. The web hosting provider with one of the most targeted names in web hosting industry has released a research paper titled – “2009 Cloud Computing Trends Report”.

The driving factors for adopting cloud services are nearly the same for all company sizes, shows the poll. It laso shows that business sizes does not play a big role in the process of adoption of cloud technologies.

Another result of the survey is that leaders of smaller companies list Cloud Computing as a priority at the same rate as executives in larger companies. Small businesses are likely to receive a greater amount of IT services from a cloud platform. The survey also says that an increased education on cloud benefits, solutions and design is very important to be mastered from businesses of all sizes.

Small businesses require an immediate and measurable results from cloud-based solutions. This includes reduced costs, increased scalability, improved service level agreements for customers, and higher availability.

2009 is slated to be a banner year for cloud computing providers and solutions. Until now the expected primary source for increased revenues was large corporations, specifically for test and development environments. However, over the past several months decreased revenues and operating budgets have driven small businesses to explore and implement production cloud environments.

Services Businesses Use from Hosting Providers

As show on the graphic above 72% of the businesses said that they use web hosting, 54% use email hosting, 32% use database hosting, 30 use application hosting and 21% use hosting providers for online storage.

What “Cloud Computing” Means For Respondents?

47% of the survey respondents say that cloud computing refers to a “fundamental change in how technology services are provided”. 19% said that it was a “tool that if delivered properly, can provide instant value for my company”, while 9% told researchers that cloud computing was “a tool that might work for another company”. 13% of the respondents define cloud hosting as “another buzzword – all hype” and 12% are unsure what cloud computing means.

The Hosting.com’s document is based on data collected over a 5-week period by conducting an open survey that has 644 respondents. All of them are C-level executives and business decision makers. More that 40% of them are holding CXOs, president, vice president titles or are owner on the companies.

All major industries such as financial services, retail, social networking, health care, manufacturing, IT service providers, marketing and advertising, non-profit sector and city governments are represented in the survey.

69% of the respondents work for companies that have less than 100 employees. 11% have more than 1000 employees. 64% of survey’s participants work fr companies with annual revenue less than $10 million, while 13% of them manage businesses with more than $100 million annual revenue.

Two thirds of the survey participants believe that Cloud computing will have a moajor impact on the IT industry. Contrastingly, 22% were familiar with the term but did not thing that it would provide value to their company.

Three Most important Factors To Invest In Cloud Computing

Cost savings, uptime and high availability, and performance are the key factors that make companies to start using Cloud Hosting technologies.

Obstacles Cloud Computing Providers Must Overcome

As you can see on the above graphic, the security is a top priority for businesses. Companies spend countless hours and investments to protects their data assets.

IT Services To Be Delivered From Cloud Platform (Next Year)

More than 75% of the survey respondents said that only 6% of It service they will use within the next 12 months will be delivered form a cloud platform. For 51% – 75% of the respondents the percentage of IT services from the cloud is 8%. 26% – 50% of executives responded that expects 12% of IT services to be delivered from the cloud within the next year, 10% – 25% of the respondents said that 23% of their IT services will be coming cloud computing.

Solutions Best-Suited For Cloud Computing Environment

70% of the survey participants answered that web applications are the service which is best suited for cloud hosting environment. 41% of the respondents think that their database servers should be hosted on cloud computing systems, and 37% said that they would host application server in cloud environment.

How Customers Prefer To Pay For Cloud Hosting Services?

32% of potential users of services delivered from Cloud Computing prefer to pay on monthly basis. 18% say that would go for annual contract based on their resource needs and bursting.

The results from the survey illustrates the need of additional education of the uses and benefits of the Cloud Computing. There are still a large number of people that consider Cloud Computing as a Buzzword or are just unfamiliar with the term. 36% are unsure when cloud Computing will impact their business. 12% have no intention to use Cloud Computing and Cloud Hosting services. 39% think that 1% to 10% of the IT services they use will come from a Cloud Computing platform.

This is my first article for B10WH after the website has been completely redesigned. I feel a little bit sentimental when it comes to this website because I’ve created under name Best 10 Web Hosting in 2003. But this was only an introduction. My first post here is about a success story I’ve recently wrote in my Daw Web Hosting Blog. the Daw’s publication is titled “Unlimited” Mistakes In Web Hosting“. It is about 1&1, a web hosting company, which originally comes from Germany, that launched its U.S. operations in 2003.

In the beginning of February Cheval Capital, a small investment bank that specializes in mergers and acquisitions in web hosting industry published its valuation of of Public Hosting Companies. Take a look at Cheval Capital’s estimate of the relative valuations of some of the major hosting companies as of February 1, 2009.

Ranked number one per Revenue ($ millions)   and Value/Revenue* is United Internet with $2,081 billion and 1.3 x value/revs, followed by Savvis with $873 million and 1.1 x value/revs.

Rackspace is third with $553 million, and 1.3 x value/revs. Dada is fourth  with $229 million and 0.8 x value/revs.

Navisite ($159 million and 0.9 x value/revs), Web.Com ($122 million and 0.6 x value/revs), Peer 1 ($94 million and 1.2 x value/revs), (Group iWeb ($15 million and 2.0 x value/revs) are ranked between 5th and 8th place.

How Te Calculation Were Made?

Cheval Capital typically look at two enterprise value formulas for calculating the Enterprise Value and make adjustments from there if necessary.

Enterprise Value = (Fully Diluted Shares * Current Stock Price) plus Debt (long and short term, including capital leases) less any option exercise proceeds for unexercised, in-the-money, options included in Fully Diluted Shares.

Enterprise Value = (Fully Diluted Shares * Current Stock Price) less Current Assets plus Total Liabilities less any option exercise proceeds for unexercised, in-the-money, options included in Fully Diluted Shares.

The investment bankers say that the reason why they look at two formulas is because some companies have unusual balance sheet items (e.g. large cash balances, that can distort valuation etc.).

Cheval Capital Inc, uses a multiple of revenue to compare web hosting companies because they have very different capital and operating structures and compete in different niches of the web hosting industry. The investment bank takes all data from public financial statements for the quarter ended September 30, 2008.

I own web hosting directory that used to be quite popular 5 years ago in 2005. It used to bring me a lot of money from advertisers, but as often happens something else appeared and I begun spending less time working on it. So it’s profit went down to zero. Soon I found it was still good and decided to re-brand it. I gave a call to a few guys I know from web hosting and asked them whether they were willing to help. I got “Yeah” and got down to business.

When it comes to web media it is important to have good news and of course the right people speaking to your readers. One of them is Ben (Ben Welch-bolen), a guy who was in web publishing business but soon decided to buy a web hosting company. His new web host is Site5, a popular shared host.

So I dropped a message to Ben and asked him for an interview. And here he is.

Hi Ben, always good to talk to you. When I met you at Parallels Summit in Vegas, I told you that you have an interesting name. I remember I asked you where “Welch-bolen” comes from, but I forgot the answer. So please now tell B10WH readers about it

Hah sure! My dad’s last name is Bolen and my mom’s last name is Welch. They decided to combine their last names as my mom did not want her last name to be lost to us. So my last name is Welch-bolen and I’m one of only two people in the world to have that last name, the other being my brother.

Hmmm, so that makes very easy for anyone to find you. You must not break any law! When you go to benwelchbolen.com there is a question “Who is Ben Welch-bolen?” and the answer is “It is really hard to say”… I’m sure it is a lot to say about you. So just tell me about your education. You have graduated in University of Arkansas at Fayetteville… BTW they have a interesting introduction on the website… Did you make it :)

I made that site in around two minutes because I was tired of other sites ranking for my name “Ben Welch-bolen” and decided a funny title would be more fun.

The University of Arkansas is a fantastic school and the Fulbright Arts and Sciences program is, in my opinion, equal to any Ivy league education apart from the benefits Ivy league reputations bring. I think a lot of that is due to the old dean of Fulbright College, Don Bobbitt.  He did a fantastic job attracting and keeping high quality professors.

I took a few computer science classes when I started school but it was frustrating; they treated us like we were in the army, want you to drop classes because they have too many students, etc. The classes also lacked creativity and included a lot of busy work. Only a few of the professors seemed to have any passion for what they were teaching. I switched to humanities after that and really enjoyed taking classes on politics, international relations, anthropology, and religious studies.

Unfortunately I am color blind and have practically no web design skills so I’m left wishing I could make something as snazzy as their intro.

I checked the recommendations you have in your LinkedIn profile. You know… There are some people who build their social networking profiles to look as they are the brightest and finest ones you can meet. Your recommendations however look very authentic. See what Mitch Keeler told about you: “Ben is one of the hosting professionals that others should be inspired to be like. With his efficient work ethic and his finger on the pulse of the industry there is no doubt that he is one of the best in the business at what he does.”… This is very strong recommendation. You should be careful not to disappoint him :) Well I’m joking, but If I have go get serious I have to say that you really make an impression of a very intelligent and cool guy. But let me ask you something  “What do you think help most to any web hosting professional, to be very ambitious and determined or to be more spontaneous, tolerant, and creative…

That is very kind of Mitch, and hopefully I can live up to that! I think for a web hosting professional it really helps to love what you are doing because customers will be able to see that passion regardless of what the job you are doing for a web hosting company.

Web hosting is a service industry so if you love helping people with problems it will show in your work.

Personally I love that I’m providing a service that helps people start businesses, learn to code, design, or build something, or just provides the infrastructure needed to get that first blog up so they can express themselves to people around the world. I’ve been building websites since I was a little kid and the Internet still continues to amaze me. I’ve got friends around the world who I can communicate with, and being able to build a website that can reach a world wide audience for only a few dollars a month is awesome!

I’m asking you this question because the companies look much alike their owners :) I know that you were in publishing business before deciding to buy Site5. If you have to redesign and re-brand Site5 for 24 hours what would you change, what would you do different?

Wow hard question!  I love our web design so I would work inside that design. I would redo the front page to make the customer testimonials more prominent. Then, I would add images to the front page to help our visitors easily get to the hosting product that will best fit their needs.

After that, I would write more details on every feature of our plans as well as more general information on each product. The goal of all this would be to provide more information to prospective customers and to make our bounce rate as low as possible.

Another company of yours Bweeb welcomes its website visitors with the message “We love the creative freedom computers and the Internet offer the world and their unique ability to unite people virtually”. Is sounds that you like most the things you do in Bweeb?

Yep, I love a lot of what I do and I’m incredibly passionate about the opportunities computers and the Internet have for everyone in the world! I remember getting pen pal letters from kids in other countries when I was a little kid and would love to imagine how they lived and what they were doing. Now with the Internet I interact daily with people in Australia, India, Singapore, England and many other countries and the Internet has allowed us all to share ideas instantaneously!

It is also flattening the job market: a child growing up in China who studies programming is not limited by his geographic area and can be working for a company anywhere in the world. It is incredibly exciting to be in the computer industry right now; a person’s ability to create something online is not limited by anything other than his or her skills and effort.

Let me ask you something about HostGator, your previous employer, before start talking about Site5. HostGator was very aggressive on the shared hosting market. It was one of the first web hosting companies that begun offering “unlimited hosting”. I must admit I like HostGator, but sometimes their marketing methods looks a little bit bad-mannered. You have said on your profile that you “learned more than you ever thought possible about the hosting industry, marketing, and management” in HostGator. Why have you decided to leave, to create Bweeb…?

HostGator is an awesome company and I learned so much from Brent while I was working there. I do disagree on the unlimited hosting. Every shared hosting company is selling unlimited hosting, and that was the case even back then.

In shared hosting the real limits are things consumers don’t have a good understanding of, such as number of concurrent connections, CPU usage, and memory usage. It really comes down to making sure clients have a realistic understanding of what they can do on shared hosting.

I left HostGator because some side projects I had started at Bweeb really took off. My business partner and I started a network of websites to help users find web hosting companies as well as sites focused on teaching people how to build websites, hosting businesses, programming, and a lot more.  As those grew, they simply needed full time attention.

Now a question about Site5’s. Do you know that there are 937,000 listings in Google for Site5. I remember that this company was quite popular a few years ago. Why did you decide to buys it instead of building a new one? Didn’t you afraid that someone has built its reputation and it would be hard to change it the way you wanted?

We’ve worked with the owners of Site5 for the past few few years so we had a good understanding of their business, and were very comfortable with it’s considerable strengths and with the areas it needed improvement. We felt comfortable that we could fix the problems at Site5 and fix any reputation problems as visitors and customers saw what we were doing with the company over the next few years.

Over the last four years my business partner and I kept notes on what we wanted to do to make our web hosting different and offer something unique to consumers. Site5 already had a custom code base that runs most of their backend and that was a big factor.  This custom backend gives us great flexibility, and will make these future projects easier to complete and with fewer compromises.  If we started a new company it would have taken a long time to  create that base to build off of.  As it is, we are getting to jump right in to a very exciting time here at site5.

What do you think about buying hosting customers. Do you buy customers and does it worth the money? Isn’t it risky business, to acquire smaller companies and to reorganize them. It is probably easier to get new customers…?

I think there is an important distinction to be made here between buying smaller companies to then wrap into a larger hosting company and taking over a hosting business to maintain and improve it as it’s own company.  When we took over Site5 we bought the entire business, maintained as much continuity as we could while improving Site5’s service as much as we could.

I don’t consider that to be “buying customers”.  Buying a smaller hosts customers on the other hand, can indeed be tricky.  To do that you have to make sure you have software to handle migrating them to your system and that you are not loosing customers who have problems during this migration.  At the same time it can be an effective way to grow quickly.  It really comes down to looking at it from a business standpoint and what your cost to acquire a customer through marketing is versus outright purchase.

What do you do when you see a negative review about Site5? Do you discourage? What anyone has actually to do with customers that for some reason are very dissatisfied the service – to refund them and to let them to leave, or to try to keep them?

I try to do everything I can to help customers with the problem and help them to understand the situation. Our management team and I all have our emails published in the forums and on the website so our customers can contact us directly.  If they are not happy with a ticket or issue they can email us directly so we can look it over and make sure everything is working as it should.

Since we have only been running Site5 for three months it is hard when a review or comment is complaining about something before we took over, but that is just part of the job. I do my best to explain to them what changes we have made to stop those problems and offer them a free trial to come back and see what a difference we have already made. We also post a big blog post going over the changes we are making to improve service since we took over every three months. You can see the last one here.

Let me ask you about another company of yours. Who’s behind SearchEngineMarketing.co.uk and why di you decide to go for a .UK web address?

We have a pretty big network of sites on webmaster topics and for a while we were doing a fair amount of consulting work for companies in the United Kingdom. We started that blog to talk about SEO issues inside that market and I wanted a place to talk about a lot of marketing issues we saw on a daily basis. Unfortunately, I haven’t had as much time as I would like to write for it. We like to focus on smaller markets as they are easier to manage and the United Kingdom is a great geographic area to focus on.

Do you describe yourself as “Entrepreneur”. What’s your definition of entrepreneurship?

I would describe myself as an entrepreneur.  I really enjoy pushing myself and trying to make something out of nothing. I’m not sure I would be very good at generating a definition, but if I had too, I think I would define entrepreneurship as the act of thinking critically and creatively in order to solve a problem or market inefficiency, and doing the hard work to see if your solution, service, or product can succeed.

OK, it is time for a final question. Make me to sign up with Site5. What do I have to know about your company?

Hah no pressure there! Site5 has a great team of employees and offers well priced Shared Web Hosting, Reseller Hosting, and Managed Dedicated Servers. Our goal is to provide the most stable hosting for our customers and let them focus on building their websitse. We have a great community of customers and a very active forum that helps users with advice on coding, design, and more. Plus, how many hosting companies provide their CEO’s email so users can email complaints directly to him?

The morality and fair play is a corner-stone of each business. Anyone who has been in business long enough can tell you than contracts does not worth even a dime without honesty. when we take a look at today’s web hosting industry however, we will see that it is all about money. It is all about making a few more bugs. Greed is one of the worst things in todays hosting market. It drives one of the most negative trends – “unlimited”! I though that there are a very few people who think this way. Of course I might be wrong, I don’t know actually how many are they, but here is one of them!

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Shipments of servers have fallen on because of the crisis. Between October and December they fell by 12% compared to the same period of 2008. The research group IDC reported a that sales revenue of the server vendors decreased by 14%. According to the firm, server sales have flattened by the U.S. recession. The European and Asian markets have also registered a dropoff in server purchases.

The major hardware producers IBM, Hewlett-Packard and Dell are the companies that is expected to be most hit the the decrease of sales in the server market.