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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Notice: This article was originally posted at http://CloudBzz.com by John Treadway.
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John Treadway 
I really wish I would have ran into you down at HostingCon. Hexagrid Computing's VxDatacenter platform solves all of the problems that you speak about in your post. Our solution truly is plug and play and can be setup in as little as 3 days. If everything is in place properly we can have you up and running in less than a day. It is extremely easy to use, doesn't require a consultant to implement, and can be accomplished with minimal upfront investment. We like to say that we have the first cloud enabling platform that understands IaaS is more than just about provisioning virtual machines, its about understanding the hosting provider's business and empowering their resellers and customers.We were shouting this loud and clear at the show but unfortunately never had the chance to speak with you. We are extremely pleased with the response we got from all the hosters. They truly appreciated how well the platform understood the business. If you ever want to talk and see how we really do answer what you are asking for above I would be glad to set something up. Until then keep up the great posts.
Joe – Thanks for the note. I added you to the Red Ocean post below.. http://www.cloudbzz.com/the-red-ocean-of-cloud-…Let me know if you have any deployed customers I can learn about.John
John, I asked the cPanel folks about cPanel support for Amazon EC2. I needed it as a customer but I also saw a great market opportunity for them. They said they don't officially support it and asked me to take their free trial and test it out. I thought it was a missed opportunity for them and, as you say, a failure to lead.
Could be a mega market opportunity for them. Oh well.