Leaders of the Managed Web Hosting Pack

In my last column, I discussed the criteria for selecting a managed Web-hosting vendor, and explained the criteria META Group used as the basis for the META Spectrum rating of vendors in that category (see Managed Web Hosting — The New Selection Criteria). This month, I'll explore the results of our research.

Previous META Group Columns

» Who Will Survive the ASP Evolution? » Managed Web Hosting — The New Selection Criteria » Was That a Managed or a Management Service? » ASPs and the Case of the Customer Disconnect » Was That a Managed or a Management Service? » Management Service Providers: The Evolution Continues » ASPs: Many Today, Some Tomorrow

The high-level META Group's findings include the following observations:

• Obviously, the build out of data centers has stopped, but even more interestingly vendors now plan to leverage others' floor space if they fill their own. Organic growth is no longer going to result in a net increase in floor space.

• Independent vendors now have a partner for at least one of two key areas — they have a significant channel partner (e.g., Loudcloud/Qwest) and/or they have a significant financial partner (e.g., NaviSite/Compaq).

• Vendors with ties to larger organizations (e.g., Genuity/Verizon) or organized as subsidiaries of larger organizations (e.g., Digex/UUnet, Exodus/Cable & Wireless) are now leveraging their parent companies or close partners much more extensively. Not only are they leaning on the balance sheet of the larger organization companies to show strength, but they are also making more use of their channel, their data center floor space and other infrastructure elements (e.g., networks).

• Custom-built technology is growing to become a critical aspect of a vendor's delivery and differentiation. Vendors are increasing investment in developing specialized technology for automating operations, interfacing with customers, tracking their performance and conveying value. This trend will continue.

• Service level agreements (SLAs) are maturing, becoming more extensive and detailed. The detail is not simply more technical metrics, but rather a deeper dive into measurement of services delivered (e.g., mean time to resolution, mean time to change, mean time to response). Users are now negotiating SLAs with multiple vendors prior to selecting a partner.

• Larger vendors that have created Web hosting divisions from within (e.g., IBM, EDS) have started to treat managed Web hosting as a segmented business unit, not just a part of things they already provide. This focused attention is leading to maturity across the industry and catching the eye of the larger vendors sales force.

2002 will continue to bring many changes to the marketplace, but signs of maturity have begun to show. META Group believes that the managed Web hosting market is one worth perusing and companies will obtain a cost savings in outsourcing this capability as opposed to doing it internally.

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