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A federal judge has ruled out that there’s a big difference between providing hosting for infringing content and participating in copyright infringement. ALS Scan sued basically everybody for copyright infringement after adult images that it owned were posted all over the web. ALS Scan sued Steadfast Holdings, Cloudflare, Juicy Ads, and a number of other web hosting services.

One by one, these defendants have been excused from the suit. The underlying logic for the dismissals is solid. Providing web hosting is not the same thing as contributory infringement, no matter how much ALS Scan wants it to be.

In the Steadfast ruling, Wu said that merely hosting a pirate site does not make the web hosting service provider liable for any copyright infringement actions the site may be guilty of. In its motion to dismiss, Steadfast argued that it did not manage or operate the Imagebam site, and that it only provided computer storage. Wu wrote that:

“The court is unaware of any authority holding that merely alleging that a defendant provides some form of ‘hosting’ service to an infringing website is sufficient to establish contributory copyright infringement. The court would therefore find that the [complaint] fails to allege facts establishing that Steadfast materially contributed to the infringement.”

The judge said that there is more web hosting companies to do, in order to be considered contributory infringers and the hosting companies are doing none of those things. He said that ALS Scan wants web hosting companies to do more than they’re legally obligated to do. But it can’t sue just because it doesn’t agree with their practices. Here is more from the court ruling:

[T]he only allegations specific to Steadfast that are raised in the SAC are that Steadfast “hosts” pirate sites, including Imagebam, and that Plaintiff has sent numerous notifications to Steadfast of infringing content on Imagebam, but Steadfast has failed to implement or enforce a repeat infringer policy by removing Imagebam from its servers.

Beyond that, ALS’s complaint contains nothing that shows evidence of its claims.

Steadfast also contends that the SAC fails to allege material contribution or inducement. The Court would agree. The SAC alleges only that Steadfast “hosts” pirate sites that feature infringing content. It is entirely unclear what services Steadfast provides to Imagebam; what type of infringing activity Imagebam conducts (or even what Imagebam is); or how Steadfast contributes to or facilitates that infringing activity. As such, the Court would find that the SAC fails to plead material contribution.

The same goes for the rest of the allegations. Steadfast (or other web hosts) didn’t produce or contribute to infringing activity at sites hosted on its network, nor did it somehow violate ALS’s trademarks by hosting websites where infringing images could be found.

As Judge Wu’s opinion points out, it’s not up to the court to determine whether sued websites are “responsive enough” to rightsholders’ demands. As websites and web hosts follow the statutory requirements and respond properly to an DMCA request, they’re insulated from most infringement claims.

“We do not consider “Cheap” as an option even in our marketing campaigns”, explains Martin Andreev a VP of Operations of HostColor.com, a well-known middle-sized web hosting provider. He adds that his company can not be found in any Search engine by keywords like “cheap hosting” or “cheap web hosting”. The company he runs has been around for more than 12 years and it’s managing team has been part of the rapidly changing web hosting industry. We are speaking to Martin about Host Color’s business and about his view about hosting industry’s developments.

Hi Martin, good to have you here. If you have to describe Host Color with a few words, what would you say? Is it a “Shared Hosting provider”, is it a “cheap hosting provider” or anything else?

It is my pleasure to do this interview for B10WH. Thank you for the opportunity. Speaking about Host Color I would say just “Quality Web Hosting”. It could be also “Shared Hosting”, “cPanel Hosting” or “Quality Dedicated Hosting”, but not “cheap”. I don’t understand “cheap” as “low in price”. In web hosting “cheap” does not refer to the price. It refers to unreliable. I know that many people would disagree with me, but just take a look any of those “cheap hosting” offerings. They are not based on the stability of the hardware systems, redundancy of the network or on how does the hosting company’s support work. All they say to customer is “you can get it cheap”. And “cheap” means a lack of standards. Cheap means that someone got a budget server or even a desktop computer with one hard drive and put a few hundreds of virtual hosting accounts on it. This is exactly what any reputable web hosting company must not do!

“Cheap” is not an option for Host Color. Nothing is cheap and  we do not do cheap. We do “low cost”, Quality Shared Hosting, VPS and Dedicated servers. Hope that this answers your question, despite that I would not use such words to describe Host Color’s business.

What would you say then?

It is on our website. We say we do “Web hosting about people, not about websites”.

How important is Shared Hosting in your customer portfolio?

It is quite important. Our company entered into the web hosting market as Shared Hosting provider in 2000. I wasn’t named Host Color at that time, however. HostColor.com was registered in January 2002. We started with dedicated servers hosted in what was RackShack, at the time, a company based out of Houston, Texas, that doesn’t exist anymore (It entered to mergers to become part of ThePlanet). What I know from those who founded Host Color that it wasn’t a reliable dedicated server provider so we moved quickly to set up our own IT hosting infrastructure in South Bend, Indiana.

Why Indiana? It doesn’t sound like a popular location for a web hosting provider?

It is very good however! We are very close to Chicago (the ping time is 4.5 ms) and the location works great for all American customers, no matter they are from East coast, West coast or live in the central states. It is great location for Canadian customers as well. The RTT (Editor’s note: Round-trip time) is low for Europe and Asia as well.

You claim to offer redundant network. Which provider do you have?

We are connected to Level3, Cogent and to Internap through a local ISP. We are also working to add two more provide or quality bandwidth in Q1 – Q3 of 2013. One would provide access to European peering to our customers, while the other one would shorten the RTT to Asia. We are also using a few smaller IP bandwidth providers which operate in Midwestern U.S.. Our network is reliable and we guarantee 100% network uptime in our Service Level Agreement. Most of our Shared and Dedicated servers customers are currently enjoying more than 1300 days up-time. However I should say that there is more to be done and we are working on it.

I saw that Host Color manages customers’ accounts with a control panel named NextColor. I wasn’t able to find anyone else to using that one. Tell me more about it. Is it a proprietary technology?

Yes. We developed it in 2003 – 2004 and it was one of the best server automation software on the market at the time. However we decided not to release a commercial distribution and to use it in-house only. This wasn’t the best decision for other control panel itself, because we did not work hard to update it the way commercial hosting automation panels are updated. So in 2010 we have decided to migrate all customers of ours to cPanel/WHM. We still have a few thousands of customers on NextColor, but we decided to migrate to cPanel. I know that we have plans to rebrand our control panel and to release a commercial version, but this would happen in 2013 – 2014.

Why? Do you say your control panel isn’t good enough?

I don not say that! It is an excellent web server automation software. It is stable, secure and easy to use. However we are not a software producer. We are a web host and we decided to focus in providing high quality web hosting, not in developing a hosting automation product. We are spending on improving the network, on testing and then implementing the best hosting automation standards and to continue providing the best possible customer support. These are very different from software development.

There is one more thing. We have seen that cPanel has become truly great software automation product within the last few years. Most web hosts abandoned the server management systems they used to use to migrate to cPanel. If we didn’t migrate our customers to cPanel we’d loose value.

How would any hosting provider loose value if they use Plesk or any other control panel, not cPanel for example?

cPanel has become the most popular server automation standard in Linux hosting. Having Enkompass they are now a player in the Windows hosting market as well. Plesk is also good, we offer it to VPS customers hosted on the Parallels Virtuozzo Containers virtualization platform. However we use cPanel/WHM for Shared hosting. It is indisputably the best automation product for Shared and Reseller Hosting, which means that it is the same for managing a stand-alone dedicated servers. I have a good news for our customers as well. We have begun offering cPanel Cloud Hosting.

Isn’t it something that any web hosting provider already does?

Not really! Take a look at Cloud hosting offerings announced by different providers and you will that they are Virtual Private Servers delivered from any Cloud computing platform. What we do is a High Availability cPanel based virtual hosting. This means that we offer Shared Hosting accounts hosted on a Cloud. We have a cluster of servers, which feature load-balancing and High Availability and the accounts of our Shared Hosting customers reside on top of the cluster. It is an excellent service, because our customers save money and time on software licensing and on virtual private server management. We use a technology called SingleOS Linux Cloud to automate cPanel Cloud management and provisioning of virtual hosting accounts on the cloud. It is a new technology and we were one of the first to implement it.

I’m skeptical when it comes to Cloud computing. Nowadays everyone is speaking about it and most providers claims to have it. At the same time it requires a huge investment to build a Cloud computing hosting service? So how could a small or a middle-size d hosting company afford to own a cloud computing infrastructure ?

Well, the major providers want consumers to think that they are the ones who could build and operate a stable Cloud computing hosting infrastructure. However the reality is different. It requires an investment to build a Cloud infrastructure, but it is not a mission impossible. I’d say that any company would start with an investment of $50,000 and to scale its Cloud infrastructure up, depending on the growth rates.

Host Color Cloud is not a monster infrastructure. It is growing and the growth rate depends on customers’ demand. So if anyone says that Cloud computing is a privilege for a companies of large scale like Amazon, RackSpace, etc. then you know one’s opinion is biased. You can see a that more and more web hosting providers adopt some kind of Cloud computing technologies. You can see a growing number of Cloud enablers. So without claiming to be an expert, I can say that we see a lot of competition in the Cloud Hosting market. It is not a competition of corporations however.

Let’s get back to Host Color’s business? How do you see your company in the today’s very competitive hosting market? What do you do to attract customers? I didn’t see much of an advertising for Host Color, compared to some other hosting providers.

We have our own sales and marketing channels and they work good for us. We do not heavily advertise our Shared Hosting, because we do not do “unlimited” disc space and unlimited everything Shared Hosting. We are working to get customers who need stable and customized web hosting environment, which means VPS and Dedicated servers. In the Shared hosting niche we recommend and are trying to attract web designers and developers who are using specific content management systems like MODx, CMS Made Simple, TextPattern, bEvolution, Drupal, Joomla, Typo3. This is not something other do not do, but we have a tradition in supporting different Open Source CMS.

Do you do any Affiliate program?

Yes we do and we offer good payout rates, because unlike Shared Hosting providers Host Color is a popular for its Virtual Private Servers and Dedicated Hosting services. But we don’t do crazy, unrealistic commissions on Shared hosting like $100 or $120 per sale. Our standard affiliate commission is 25% of the sale amount. The lowest commission is $11.97 for Blog Hosting plan. The highest one is a $199.75 per a sale of Dedicated Hosting Power, purchased on monthly contract. However we have customers who buy dedicated hosting services on annual basis, which means that an affiliate could make $1,437 if they refer a customer, who buys a Dedicated Power, dedicated server.

Would you sale Host Color if any bigger web host makes an offer?

I don’t know. This is not my responsibility. Owners must decide on any such offerings. What I know from them is that we would never sell our customers. I have seen a lot of statements like “We buy customers” or “Sell your customers”. It is ridiculous! Host Color has more than 10 years of  business history in the web hosting industry. Our brand and our reputation bring business. So I presume that the company would consider any buyout offering, only if it accounts Host Color’s brand reputation and business history, not just our annual revenue.

Thank you very much for this interview Martin.

It was my pleasure. Thank you for your  time and your business. I’m glad to be one of the hosting industry professionals featured at B10WH.

The first one to publicly utter the term “Cloud Computing” was Google’s CEO, Eric Schmidt. That was almost three years ago, back in 2006. The first article about “Cloud Computing” in Wikipedia was published on March 3, 2007. Since then, more than 500 versions of the same article have been submitted. A long line of references have also been added to Wikipedia’s “Cloud Computing” page. It took me 216 hours to read them all, and 1 hour to forget almost everything I had read. But let me start by offering two different definitions of “Cloud Computing.”

The good definition – “Cloud Computing is a new, networking model of developing and using computer technologies. It is a paradigm in computer science in which tasks are assigned to a combination of connections, software and services accessed over a network.”

The bad definition – “Google, IBM, Salesforce, Amazon, Microsoft, Yahoo and other corporations found another way to get even richer.” The above mentioned corporations were the first to utilize a major change in computing technologies. They began producing computer systems and platforms that are recognizable by high availability, scalability, load balancing, and the use of a large quantity of computer resources connected through a network.

Why We Need Computer Clouds

I met 24 year old Peter at an IT community event in Bulgaria. He and his partner founded a small dotcom startup company called Clixpy. Clixpy provides a web usability service that tracks everything visitors on any website do such as mouse movements, clicks, scrolling, form inputs and more. We discussed various aspects of online business and when we got to web hosting, I asked him what made him choose his web hosting provider. He said that he chose a specific web hosting provider only because the company offered scalable VPS Hosting and promised him that he can increase the account resources by a single click in his control panel.

When I asked him why he needs a scalable service for a startup project, he answered, “Well, Just imagine that a blog such as TechCrunch, for example, decides to post a review of us. We must be ready to handle the load and ensure that we will be online!” As you may guess, Peter’s company is one of the reputable grid hosting providers. His company doesn’t say it provides Cloud Hosting on its website, but promotes its services and products as “Grid Hosting,” with high availability and scalability among its features.

We obviously need to use more and more computer resources and it is getting harder to put them in a self-contained hardware system. There are several predecessors to the computer Clouds, such as Clusters or Grid systems. All of them represent significant efforts to consolidate hardware and software resources in order to power applications that require tens of thousands, and sometimes even millions of computing processes to be handled within a very short period of time.

Consumers increasingly demand the hosting of large files and web-heavy applications. This forces web hosts and providers of Internet based services to implement significant innovations in the IT infrastructures and the platforms behind them. These innovations may include building more sophisticated networks, setting up new data center architectures based on load-balanced systems, and utilizing various virtualization methods (platform virtualization, resource virtualization, application virtualization, etc.).

Let’s not forget to say a few words about virtualization because Cloud computing is unimaginable without it. For those who are not familiar with the term, “Virtualization” is a technology which refers to abstraction of computer resources. It is a very broad term, but when using it most people refer to “Platform Virtualization” techniques. These techniques include “Full Virtualization” (a complete simulation of the underlying hardware), “Hardware-assisted Virtualization” (simulation of a complete hardware environment using hardware capabilities such as host processors), “Partial Virtualization” (partial simulation of the physical computer), “Paravirtualization” (a software interface to virtual machines, similar to that of the underlying hardware), “OS Virtualization” (method where the kernel of an OS creates multiple isolated instances, instead of just one).

The virtualization technologies mentioned above make possible the transformation of computer clusters, the grid computing infrastructures wе use, into “Computer Clouds.” Some important keywords which are associated with the terms “Cloud” or “Computer Cloud”, include: “efficiency”, “lower costs”, “redundancy”, “modularity”, “low latency”, “Quality of Service (QoS)”, “virtualization”, “Software as a Service (SaaS)”, “Platform as a Service(PaaS)”, and “Infrastructure as a Service (IaaS)”. Any computer platform or service that corresponds with most of above keywords can be defined as a “Cloud” type.

The technologies bridging the gap between computer Clusters we have known for years and new Cloud computing architectures, can be summarized with one phrase, “Platform Virtualization.” It is a technology concept which allows an operating system (OS) to be separated from the underlying platform resources.

The New Rivalry. Who Will Win?

Like any other type of computing, the Cloud concept creates competition of IT services and products in different markets. Those who succeed in producing comprehensive platforms and delivering them as online services (PaaS), will become global IT leaders in the new era of Cloud computing. Google, Amazon, Salesforce, Yahoo and Microsoft are now ahead of others in developing and delivering Cloud computing generation platforms. In the world of computer Clouds these companies, followed by a few other major corporations, are conquering the consumer markets by offering various IT services and products over the Internet. However, they will face tough competition from traditional telecoms, owners of the computer networks, and ISPs. Anyone who wants to provide Cloud computing based IT services must have unlimited access to a very stable, redundant network, which has to be reliable enough so endusers will be able to access remote hardware and software resources. The boom of Cloud based services depends on the development of the IT networks. And their owners will definitely try to grab as big a share of the emerging Cloud market as they can.

Cloud as Infrastructure & as Platform

The first ones to benefit from the above described major transformation in computer technologies are Infrastructure providers. Companies which produce computer infrastructure, computer systems and components, like Intel, AMD, Cisco, IBM, HP, and Apple, might team up with telecoms and networking providers to deliver computer infrastructures as a service (IaaS). To better compete as major Clouds, the above mentioned companies, telecoms and networking providers need to either invest millions in developing their own infrastructures and platforms, or partner with software producers in order to deliver Cloud based services. This is good news for software companies because it creates a huge market for Cloud computing platforms. Teaming up to compete with Google, Microsoft, Yahoo, Amazon and other dot-com giants, competitors will need to adopt different kinds of platform virtualization environments. That’s the reason why many producers of hardware and infrastructure services are now spending a lot in building new generation computer platforms.

Here is the chance for companies that deliver platform virtualization, such as VMware, Oracle, Parallels, and Citrix, to take control of the Clouds. They deliver Cloud computing platforms (PaaS) and software as a service (SaaS) on top of underlying hardware architectures. They are the ones who really make it possible for businesses and end users to move to the Clouds.

I’m not sure how to categorize some of the above major corporations – place them among IaaS producers, to put them under the “SaaS label”, or to classify them as computing platform (PaaS) providers. Companies like IBM, HP, and Apple, for example, will continue to be IT entities that could deliver “everything as a service.”

I’m sure that in real life all the above mentioned IT giants have to partner with other smaller IT companies to survive, especially in times when the world economy is shrinking. I think that the partnership is natural in the Cloud generation of computing. It is a rule, not an exception. The new Cloud partnerships might give birth to new mighty technology brands, or force the closure of companies that have been around for decades.

Cloudware

Today, anyone knows the meaning of “hardware” and “software.” Tomorrow, people will have to make themselves familiar with a new computer term – “Cloudware.” Cloudware refers to computing by building, delivering and using web applications and services through the Internet. A Cloudware provider is anyone who can create and deliver a computer platform as a service (PaaS).

PaaS providers will be the pearls in the Clouds. I predict that Cloudware providers will become the backbones of the technology industry within the next two decades. I have a reason to make this prediction: Cloudware providers will provide all of the facilities required to support the complete cycle of building and delivering web applications and services, entirely available from the Internet, with no software downloads or installation for businesses and end-users.

Cloud Hosting

“Cloud Hosting” can be defined as a web hosting service delivered from a system of servers. The term is not precisely defined, yet. However, it can be very simply explained as a combination of computer clusters and a specific software platform running on top of it. Any hosting service can be considered as Cloud Hosting, when delivered from a fully redundant cluster server system, in which the resources are dynamically scalable and often virtualized. Of course any Cloud Hosting service also has to utilize a computer platform allowing all the services to be delivered and billed on a “pay per use” model.

Linux or Windows Clouds

Without being a software expert, I can see a few companies who are creating standards in Cloud computing. When it comes to Linux based Clouds, the first name that comes to mind is Red Hat. The Amazon web service is built on Red Hat Enterprise Linux (RHEL). Red Hat provides the standards that developers of Linux based Clouds need to build and host applications such as compute capacity, bandwidth, and storage. The Open Source operating system platform – RHEL to be included, of course.

In a white paper titled “Linux: The Operating System of the Cloud”, Amanda McPherson, Vice President of Marketing and Developer Programs Linux Foundation, says: “The dominance of Linux within the current crop of Cloud computing vendors is eye opening. Virtually every Cloud player of any significance features Linux in either primary or supporting capacities, and this adoption is increasing. Google’s recently launched App Engine and Amazon’s competitive EC2 product both leverage the Linux kernel, as do Cloud offerings from vendors such as 10gen, 3Tera, Media Temple, Mosso, and Zimory”.

McPherson’s got a point. The Linux operating system (OS) looks to be winning the “OS war” with Microsoft’s Windows in the Cloud battlefield. At least until Microsoft comes up with a Cloud computing version of its Windows OS. Having a Windows Cloud in its pocket will allow the Silicon Valley company to take its dominance in the software market to the Cloud level. All the same, I cannot give you an answer to one very important question: “Will the Cloud style of computing fit in with Microsoft’s OS, its applications and the company’s strategy in general? In many interviews, I have seen Microsoft’s officials state that they started thinking of how to prepare their company for any kind of Internet based model of computer use in the late 90s. Microsoft has already launched Azure. They are marketing it as an “Operating system for the Cloud”.

Some analysts say that Azure simplifies and automates the Cloud concept that Amazon started. Azure provides a “compute fabric” upon which developers can run their applications based on Microsoft Visual Studio development environment and the Microsoft .NET Framework. The main advantage of the Azure is that it reaches 100% of computer users thanks to Microsoft’s position in the PC market. It is also supposed to be familiar to all independent software vendors. But Azure also has some disadvantages. Azure was late entering the market and it’s still immature. But even bigger disadvantages are its restriction to .NET, and of course, being in conflict with the general concept of Cloud computing. As an Internet based model of computing it is supposed to be a computing style built on Open Source based platforms and applications. The big question that remains to be answered is whether Microsoft will rewrite the computer history within the Clouds.

About the Author

The author Dimitar Avramov is a founder and CEO of HostColor.com. The original article has been written for Ping!Zine.com Magazine and published there in March 2009.