Despite the whole NSA affair (and while we’re at it, why doesn’t anyone mention the Chinese, Russians or Indians?), hosting and service providers all agree – the future lies in the cloud. Today, they are already trying to outdo each other when it comes to offering convenient, practical cloud storage space here at home and around the world – with more and more space and ever-sinking prices.
Yet many are already worried about where this trend is headed. And for good reason: in the future, simply offering storage space will not be enough. After all, it’s a pretty dubious business model: disk space in gigantic computer centers and server farms is simply rented out, sublet and then sub-sublet. The subletter, i.e. the small hosting provider, marks up the price in order to make a small profit. And it’s certainly within their rights to do so. Likewise, it is the customer’s right to switch to a cheaper provider.
As a result, there is a clear trend indicating that hosting providers will have to start delivering much more than just storage space. They will need to seriously restructure and expand their range of services.
A matter of price and service
Many companies complain about high IT costs. They operate extensive infrastructure that is, in fact, entirely unprofitable because it is often underutilized and generates enormous maintenance costs. In many cases, it has also grown inorganically and requires a vast amount of effort to ensure all the various components work together seamlessly. Due to cost considerations, it is often necessary to forgo new systems or even just software upgrades.
It’s not surprising that many new buzzwords have emerged: IT outsourcing. Managed services. Infrastructure, platform and application services. Dumb web terminals instead of complicated PCs; mobile devices instead of laptops…
“That’s nothing new,” you say. True. All of these things have been around for quite some time now. But these services and technologies are only just starting to break into the mainstream. This might also be because many IT departments prefer taking responsibility for downtime over the prospect of being beholden to a certain provider…
One additional factor that had slowed down further progress was that bandwidth was always very expensive until now. But even this problem appears to have been solved (except on days when the entire world is trying to download the new version of iOS onto their iPhones and iPads). So is it finally time for a revolution? After all, it’s been on the cards for quite some time now! And how are hosting and service providers reacting to the new developments supposedly on the horizon?
Serious revolutions enter through the back door
Revolutions take time – and, above all, the right starting point. Sometimes, they involve business solutions that later take a foothold in the private sector as well, thus helping to make people familiar with the product and increasing acceptance for it. And sometimes it’s the other way around. When a certain technology catches on for personal use, resistance in the business sector fades away, too.
We think to ourselves: the foundations for new business models have been laid. For example, fewer and fewer applications need to be installed locally. Instead, they can be run via the web. These include website building tools, office solutions, entire ERP systems and so on. Adobe now offers the latest versions of its Creative Suite only in the form of a web-based subscription service.
This revolution has been knocking on the door for quite some time. It’s been making a lot of noise, trying to make itself heard. But it was too soon. The dot-com bubble burst in 2000 because the market, infrastructure and users were not ready to join the revolution…unlike today. Much of what was promised back then with great fanfare but which seldom became a reality has, in fact, finally come of age. These technologies have become well-established and spread stealthily through the back doors of the IT world. What was once considered revolutionary is now taken for granted.
Next up: the Internet of things
Still, many predictions made at the turn of the millennium have not come to fruition. The famous refrigerator that automatically orders coffee creamer and strawberry yogurt never really caught on. But we are seeing the idea of the “Internet of things” enjoying increasing resonance in industrial applications, production and particularly in logistics.
The information gaps between the real and virtual worlds are gradually closing. The good old PC is being replaced with web-connected “intelligent objects” that organize themselves and make people’s lives easier. The Internet is taking on lots of additional new tasks.
What does all of this mean for hosting and storage space providers?
They are facing a great challenge, because their industry looks set to undergo a massive transformation. Experts agree that user interfaces will be subject to intense development. It is also assumed that only a few of the large public cloud providers will survive, and many smaller companies will go under if they don’t evolve.
They will have to seek out niche markets and redefine their roles. They will no longer simply act as cloud enablers, but will also become license consultants in the area of Software as a Service (SaaS). They will offer training, provide software and hardware and have to deal more intensively with individual customers and their expectations. They will be involved in networking people and machines, things and information.
Around the turn of the millennium, computer retailers and providers attempted to show customers the way – but no one followed them. Soon, both private and business customers will be forging new paths, inspired by the opportunities offered by new technologies. And they will need dedicated service providers by their side.
We got the message. And we’re looking forward to what comes next.