VPS and Business Cla.. - Verio

colorfuleggnogSoftware and s/w Development

Feb 17, 2014 (3 years and 3 months ago)

125 views

-

1

-

Proprietary and Confidential

April 2009








Product Marketing Q2 Analysis

In
-
Depth
Product Market
Analysis
Project: VPS
and Business
Class Shared

-

2

-

Proprietary and Confidential

April 2009

Project Scope and Objectives


Goals


Gather a better understanding of what business problems are being solved by
hosting products.


Conduct customer interviews to create use cases that will help determine where or
if there is overlap in Verio product offerings.


Map use cases back to Verio products to determine the best product fit and
distribution channels.


Capture general hosting trends and market perceptions.

-

3

-

Proprietary and Confidential

April 2009

Project Methodology


Internal Interviews


Conduct Internal interviews with product experts to improve the understanding of the internal
product perceptions and positioning.


Verio Product Portfolio


Create a product catalogue that includes all Verio hosting plans from Shared to MPS. This
catalogue will include key features, pricing and add
-
ons.


External Market Analysis


Conduct a series of interviews within different categories


Verio and Non
-
Verio


End Users and Partners


Unix and Windows operating systems


Shared, Virtual and Dedicated servers


Create customer use cases and map them back to Verio products


Conduct web survey about the importance of different features


Verio/Non
-
Verio, VPS and MPS customers


Review secondary research in relation to hosting trends and perceptions







-

4

-

Proprietary and Confidential

April 2009

Executive Summary
-

Key Insights

-

5

-

Proprietary and Confidential

April 2009

Technical Complexity of Hosted Environment

Value of Hosting to the Business

Low

High

High

Managed Private Server




Today’s Signature
(Windows/Unix)

Use Cases and Products (End User Perspective)

Virtual Private
Server

Plain Old Web

Amateur

Pro Amateur

Business Web 1.0

Today’s Virtual and
Managed
Windows
Hosting
(Future Signature II)

Business
Web 2.0

Corporat
e Web
1.0

Corporat
e Web
2.0

DIY
and

Static
Hosting


This is how our
customers use
our products
today.

-

6

-

Proprietary and Confidential

April 2009

Technical Complexity of Hosted Environment

Value of Hosting to the Business

Low

High

High

Managed Private Server




Today’s Signature (Windows and Unix)

Use Cases and The Competition

Virtual Private Server

Plain Old Web

Amateur

Pro Amateur

Business Web 1.0

Business
Web 2.0

Corporat
e Web
1.0

Corporat
e Web
2.0

DIY and Static
Hosting


Today’s Virtual and Managed Windows
Hosting (Future Signature II)

Who the
competition
focuses on selling
to.

-

7

-

Proprietary and Confidential

April 2009

U.S. Shared Web Hosting Forecast, 2007
-
2012

In millions,

Source: IDC, 2008

2005

2006

2007

2008

2009

2010

2011

2012

CAGR

Basic Shared Hosting

$655

$638

$620

$601

$584

$571

$558

$545

-
2.5%

Enhanced Shared
Hosting

$299

$314

$334

$353

$373

$393

$414

$431

5.2%

Virtual Private Server
(VPS) Hosting

$601

$664

$738

$818

$905

$994

$1,078

$1,156

9.4%

Total Web Hosting

$1,555

$1,616

$1,692

$1,771

$1,862

$1,958

$2,049

$2,132

4.7%

DEFINITIONS


Basic

: a bare bones shared Web hosting package with severely limited data transfer and storage
allocations. the "budget" or "starter" package with pricing at $10 month or less.
USE CASES


PLAIN OLD WEB, AMATEUR and PRO AMATEUR (31.4%)


Enhanced
: more professional offerings with larger resource allocations, ecommerce add
-
ons, and
some level of customer service/support. Pricing starts in the neighborhood of $20
-
30/month.
USE CASES


BUSINESS WEB 1.0, BUSINESS WEB 2.0 (20.0%)



VPS Hosting:
USE CASES


BUSINESS WEB 2.0, CORP WEB 1.0, CORP WEB 2.0 (48.6%)



-

8

-

Proprietary and Confidential

April 2009

Managed Private Server


Technical Complexity of Hosted Environment

Value of Hosting to the Business

Low

High

High




Use Cases and Products (Market Sizing
-

Revenue)*

Plain Old Web

2.9%

Amateur 10.1%

Pro Amateur

11.5%

Business Web 1.0


15.9%

Today’s Virtual
and Managed
Windows Hosting
(Future Signature
II)


Business
Web 2.0
14.2%

Corporat
e Web
1.0 9.2%

Corporat
e Web
2.0
36.1%

DIY and Static
Hosting


*Directional
information only
based on domain
registration volumes
for competition, with
applied price points
and Use Case
assignment

52.4%

23.0%

21.6%

2.9%

Today’s
Signature
(Windows/Unix)

Virtual Private
Server

-

9

-

Proprietary and Confidential

April 2009

Technical Complexity of Hosted Environment

Value of Hosting to the Business

Low

High

High




Use Cases and Products (Verio Product Perspective)

Plain Old Web

Amateur

Pro Amateur

Business Web 1.0

Business
Web 2.0

Corporat
e Web
1.0

Corporat
e Web
2.0

DIY and
Static
Hosting

Managed Private Server

Today’s Signature
(Windows/Unix)

Today’s Virtual and
Managed Windows
Hosting (Future
Signature II)

Virtual Private
Server

This is how we
“sell” our
products today.

-

10

-

Proprietary and Confidential

April 2009

Technical Complexity of Hosted Environment

Value of Hosting to the Business

Low

High

High




Use Cases and Verio Distribution Channels

Plain Old Web

Amateur

Pro Amateur

Business Web 1.0

Business
Web 2.0

Corporat
e Web
1.0

Corporat
e Web
2.0

Retail

OEM

Partner *

Verio’s partner
focus insures the
best overall
customer
coverage.

* Partner segment includes


web developers, web designers, ISVs and MSPs. This cannot be easily translated into sub segments b
ecause the
nature of the business with dictate who they ultimately sell to.

-

11

-

Proprietary and Confidential

April 2009

Use Cases


Side by Side

Key Business
Use

Recommended
Product

Rational

Primary
Distribution
Channel

Upgrade Trigger

Plain Old
Web

Online business
card

DIY and Static
Hosting

Their site is a
simple “online
brochure” and
the cost must
be minimal.

OEM/Online

Need to use website to
share and gather
information

Amateur

Using online
presence to gather
and share
information

Today’s Signature
(Windows and Unix)

The business
needs and
requirements
are simple and
must be
achieved in a
“simple”
manner.

OEM/Online

Need to do more with
the site

Pro
Amateur

Using standard
applications like a
blog

Today’s Signature
(Windows and Unix)

The business
and hosting
needs are
minimal. A
simple task
like creating a
blog must be
accomplished
easily.

OEM/Online

Need more resources
and complex standard
applications

-

12

-

Proprietary and Confidential

April 2009

Use Cases


Side by Side

Key Business
Use

Recommended
Product

Rational

Primary
Distribution
Channel

Upgrade Trigger

Business
Web 1.0

Dynamic content
creates a more
interactive site

Today’s Virtual and
Managed Windows
Hosting (Future
Signature II)

The complexity of
business needs can be
met by applications that
are standard and come
included with the
hosting package.

Partner

Need for more customized
applications

Business
Web 2.0
(
Tipping
Point of
Overlap)


Specialized dynamic
content

VPS or Today’s Virtual
and Managed Windows
Hosting (Future
Signature II)

The business now
requires the use of
standard and custom
applications therefore
they need to have
access to install
applications either on
their own or
with help
from Verio.

Partner

Need for standard and
custom applications

Corporate
Web 1.0

Business is heavily
integrated with
hosting service

VPS, MPS or Windows
(with root access)

They require root
access for complete
configuration control.

Partner

Needs change to require
architectural complexity

Corporate
Web 2.0

Optimized for single
use

VPS, MPS or Windows
(with root access)


They require root
access for complete
configuration control.

Partner

Needs dictate architectural
complexity


-

13

-

Proprietary and Confidential

April 2009

Partner Value Equation (Hypothetical Scenarios)


When just comparing the number of websites that can be hosted on a plan:


Linux VPS Basic to Signature II ($10 SRP) the Partner would receive a minimal cost savings of
$2.75


The Partner begins to see more value if they use Signature II ($60 SRP) seeing cost savings
of $16.5 to $22


The Partner begins to see more value if they use VPS Basic and increase the number of
websites beyond the recommended number is a cost savings of $57.75


*Note the are based on hypothetical website hosting scenarios and will need to be reevaluated after Signature II pricing,
resources and plans have been finalized
.
The VPS’s value to the partner lies in that they can do more than webhosting with
the server.


From the interviews we noticed that newer partners lack the technical
understanding of the Linux VPS in order to carve the server successfully.


The partner must be willing to take control of learning more about their
servers and most Partners don’t want to have do this; this is what they pay
Verio to do for them.

** See Appendix for more details on product and pricing comparisons.

-

14

-

Proprietary and Confidential

April 2009

Other Key Insights


All customers, even the tech savvy ones, expect the hosting
provider to take care of anything associated with the hosted server
“that is what we pay the provider for” or else they would do it
themselves. They expect that the hosting piece of their business to
“just work”.


Hosting is a minimal contributor to partner’s overall revenue.


Customers continue to call their sales rep for technical issues
because they view that sales rep as their contact with that provider.


A fair number of customers were using Linux and Windows or
Windows and FreeBSD to create a complete solutions; not always
clear “Unix vs. Windows”.


A number of customers have learned to get around the limitations of
Verio products through custom coding or with direct contact to key
Verio resources.

-

15

-

Proprietary and Confidential

April 2009

Short Term Product Recommendations


Need to factor in Use Case information into upcoming Signature 2
launch. Data suggests that there is still a need for a
Shared
solution
to meet the needs of the Amateur and Pro Amateur segments.


Verio should clearly differentiate VPS/MPS products to a different,
more technical market and focus Signature and Signature 2 to meet
web hosting needs. Data suggests that there is little overlap
from
the customer perspective

from VPS/MPS solutions vs. Signature 2
solutions.


Plain Old Web category is best serviced through $4 DIY solution.
Verio needs better online processes/tools to serve that customer
base with no need for sales/support. We should not offer this plan
to partners.


-

16

-

Proprietary and Confidential

April 2009

Recommendation
-

#1


Link Product Marketing research information to improve product
positioning and messaging.


For example:


On the lower end, for the Amateur, limit the type of applications customers have access
to install


In the middle, the area of overlap Business Web 2.0, improve the messaging and
education to steer customer to the appropriate products


On the higher end improve the number of easily installable business applications


Even technically savvy customers do not understand hosting industry terminology



Verio needs improve how we speak to our potential and existing customers by talking to
them in “their words”







-

17

-

Proprietary and Confidential

April 2009

Recommendation
-

#2


Increase the number of “Business Oriented” installable applications



Create a Verio business application portal similar Go Daddy’s Hosting Connection


Increasing integration into SMBs day
-
to
-
day business improves their “stickiness” with Verio


Market trend is to use pre
-
packaged solutions to solve business problems and less customization is
going on. SMB’s are looking for ways to save money and are limiting the custom developed
applications.


Even Highly technical companies the hosting provider to preinstall modules into a GUI for “easy”
installation and updating.


Conduct Q3 Product Marketing analysis


determine application priorities



-

18

-

Proprietary and Confidential

April 2009

Recommendation
-

#3


Use key findings from this project to create a “Business Needs
Assessment Wizard” to assist customers and partners to choose a
product that best suits their needs.


These suggestions are based on the experiences of other customers with similar requirements and are based on typical usage.

-

19

-

Proprietary and Confidential

April 2009

#3
-

Verio Web Wizard Strategy

Solution Communication Wizard


Questions in the Wizard help customers identify
the best solution from Verio’s product set to solve
their business needs.


The Wizard engages the customer and motivates
them to contact Verio.

Dedicated Server


May 2009


Verio.com


June 2009

Post Launch


Evaluate effectiveness
and benchmark against other wizards
to improve future graphic design and
wording.

-

20

-

Proprietary and Confidential

April 2009

Recommendation
-

#4


Create attractive migration programs to encourage new and
existing customers to move “all” of their hosting business to Verio.


Many interviewees have more than one hosting provider. For example,
Hostsaurus for e
-
commerce hosting and Verio for VPS.


Verio is missing out on opportunities with our existing customer base by
not making an effort to acquire all of their business.


-

21

-

Proprietary and Confidential

April 2009

Recommendation #5


Improve SMB hosting knowledge and reliance on Verio by creating
simplified

education center.




-

22

-

Proprietary and Confidential

April 2009

#5


Verio Current Strategy


May 2009 Launch of websites.com site


Need to determine way to migrate key educational content to
verio.com and provide easier way to link education to sales




-

23

-

Proprietary and Confidential

April 2009

Appendix

-

24

-

Proprietary and Confidential

April 2009

Partner Value
Equation

-

25

-

Proprietary and Confidential

April 2009

Value Equation to a Partner


(In Their Words)


“We use MWS and VWS.
We are experts in Windows plans

and know enough about
those plans to be successful. The key is


we don’t want to be a Windows Server
administrator
. I received a quote in the last six months for VPS. The price is appealing
now. The VPS type solution is more cost effective, but then we have to manage
everything. We don’t want to have to do that. It makes us spend more time in areas
outside of expertise. We like that Verio can handle that piece for us. Some customers
may have to move there (VPS) eventually, but we think most of our business can be
done on a Shared solution.”


“One customer who owned 4 companies we put all 4 companies on one MPS. VPS
seems to work the best for us.”



We started with Virtual hosting and are the most comfortable with that
. Signature
confused the issue


less control. Found it didn’t make sense we were already
managing VPSs 20 to 30 small sites on a VPS costs us less than $2 a plan.”


“You can also host this on your VPS but you will need to know a bit about Linux users,
groups and permissions to make it all work. The Signature hides all of this gunk from
you.”


They compete via value added services which includes web site development and
custom apps.
Their hosting services start at $30/month for their customers. Their
“sweet spot” for customers is via Unix Shared Hosting.

The main purpose for most of
my customers is the applications: email, stats, customized apps. IMG themselves have
3 portal sites: a job board (like Monster for Maine), a travel and tourism site
(information chamber like website) which is membership based, and an automobile
portal for Maine.

-

26

-

Proprietary and Confidential

April 2009

Partner Value Equation

(Hypothetical Scenario)

*Cost in New viaVerio Channel

VPS
-

Basic

Signature II ($10 SRP)

Monthly Cumulative Bandwidth

No Charge

No Charge

Web Disk Space, Email and Database

20 GB

?

Number of Website

10

2

Number of Plans

1

5

Cost per plan

$24.75

$5.50

Total Cost

$24.75

$27.50

Cost Difference



$2.75



*Source for Usage Recommendations
-

Linux VPS Technical
Overview*

-

27

-

Proprietary and Confidential

April 2009

Partner Value Equation

(Hypothetical Scenario)

*Cost in New viaVerio Channel

VPS
-

Basic

Signature II ($10 SRP)

Monthly Cumulative Bandwidth

No Charge

No Charge

Web Disk Space, Email and Database

20 GB

?

Number of Website

30

2

Number of Plans

1

15

Cost per plan

$24.75

$5.50

Total Cost

$24.75

$82.50

Cost Difference



$57.75



*Source for Usage Recommendations
-

Linux VPS Technical
Overview*

-

28

-

Proprietary and Confidential

April 2009

Partner Value Equation

(Hypothetical Scenario)

*Cost in New viaVerio Channel

VPS
-

Basic



Signature II ($60 SRP)

Monthly Cumulative Bandwidth

No Charge



No Charge

Web Disk Space, Email and Database

20 GB



?

Number of Website

10



20

Number of Plans

2



1

Cost per plan

$24.75



$33.00

Total Cost

$49.50



$33.00

Cost Difference



$16.50



*Source for Usage Recommendations
-

Linux VPS Technical
Overview*







-

29

-

Proprietary and Confidential

April 2009

Partner Value Equation

(Hypothetical Scenario)

*Cost in New viaVerio Channel

VPS
-

Pro Plus



Signature II ($60 SRP)

Monthly Cumulative Bandwidth

No Charge



No Charge

Web Disk Space, Email and Database

20 GB



?

Number of Website

40



20

Number of Plans

1



2

Cost per plan

$88.00



$33.00

Total Cost

$88.00



$66.00

Cost Difference



$22.00



*Source for Usage Recommendations
-

Linux VPS Technical
Overview*







-

30

-

Proprietary and Confidential

April 2009

Market Perception of
Shared vs. VPS

-

31

-

Proprietary and Confidential

April 2009

Partner Interview Comments on the Perception of
Shared vs Virtual Servers



“The customers we host only need Shared hosting plans. Larger companies they service have their
own servers in house.”


“I don’t know what VPS is, hosting is all the same.”


“These terms really don’t mean anything to me. I understand, but it doesn’t matter.”


“ I understand what VPS is in general, but wouldn’t consider it right now. Primarily would look at
cost. If VPS was a great offering and value, then I’d look into it. Customers don’t request it &
don’t see need for it yet.”


“I think SHARED hosting plans are cheaper. They are also shared accounts on a server. And they
are easy to use. VPS is more dedicated (when compared to SHARED). It is also more expensive to
use. And it requires more maintenance, and that means too much hosting knowledge for me and
the business. That’s not where I want to focus.”


“90% of our customer base gets by fine with a Shared plan. A VPS plan might be needed for the
customer that has complex technology needs. It used to be that VPS hosting plans were cost
-
prohibitive. So we avoided them. Now those plans are more cost
-
effective. At the same time,
some of our customer needs are becoming more complex. The challenge is migration. We don’t
want to have to migrate customers, as it means their website is down for a day or more. It is a
pain to change from Shared to VPS, but in the past we haven’t known about the need to move to
something more sophisticated when the customer relationship started.”


-

32

-

Proprietary and Confidential

April 2009

Partner Interview Comments on the Perception of
Shared vs Virtual Servers


“I understand both of them. But I don’t really see much of a difference from
my perspective. Maybe if I had very large customers, I’d need a VPS.
Shared plans work fine from my perspective.”


“Prefer to use VPS with everyone but cost to the client doesn’t always mesh.
There are a lot of things that are simpler to do with the Shared hosting. I
wish the VPS were as easy to use as the shared hosting (idiot proof). The
VPS you have to know what you’re doing.”


“We don’t do too much with shared, VPS seems to be a good fit. We have
had servers get down and then we upgraded sites.”


“The word Virtual rarely comes up in a conversation. Only if the customer is
sophisticated they will ask more about the resources, multiple sites,
understand the technology of disk space and architecture. The majority of
customers understand and discuss


traffic to the site, email and ftp users,
disk space.”


-

33

-

Proprietary and Confidential

April 2009

End User Comments on the Perception of Shared vs
Virtual Servers


“I don’t have a clue as to what this is. I don’t even know what kind of plan I have.”


“Shared because meets my needs, but she doesn’t have any predisposed feelings about
the other solutions.”


‘Virtual’ a couple of years ago was sketchy now it is a easier term to accept.”


“I went with a shared plan because it was what was recommended. I didn’t really care
as long as it met my needs and my budget. I’ve never heard of virtual servers (VPS).”


“He would be fine with a shared plan if it showed a cost savings. Would need to be at
least 20% cost improvement to bring forward to management.”


“They are great for companies with smaller needs. We have such big application needs
related to our day
-
to
-
day business that we never considered anything other than a
dedicated server.”


“No preconceived notions about any of the above. Always liked the idea of dedicated.”

-

34

-

Proprietary and Confidential

April 2009

Hosting Trends

-

35

-

Proprietary and Confidential

April 2009

Hosting Trends Noticed by our Partners


Increasing requests for Ecommerce and merchant services


Customers are moving towards more sophisticated websites


Need for private SSL certificates


SQL Express is no longer good enough they need a full instance of SQL DB


Partners using Accrisoft feel that as the needs changes Accrisoft changes to
meet those needs


Increased awareness and requests for SEO and SEM


Increased requests for CMS


Their customer mix used to be 70% traditional hosting and 30% value add,
now they have 40 % traditional hosting with 60 % value add


Using more prebuilt tools and adding depth to websites


More site analytics and analysis of traffic


Beginning to think about blogs, Twitter, and other Web 2.0 options

-

36

-

Proprietary and Confidential

April 2009

Accrisoft
-

Interview Summary


“In the past we liked the power of the VPS but the Accrisoft system has developed and we no longer have the need to
install individual applications we just need to install Accrisoft. We no longer need root.”


“VPS servers are still good for
those people who need to have control over customizations.”


“The Accrisoft software has matured over time and we no longer have the need or desire to install applications.”




Accrisoft comes with over 80 modules and they have built some of these modules to overcome the voids in the Verio
products.


“We had a need to give hosting away with our 5 module version.

We used to do this on a VPS run 20


30 sites; sometimes
as many as 300 sites.


Then if there is an issue with that server we get 300 phone calls.


It was also not practical because
our application uses all the same resources on that server


the load is the same.”

He did not feel it was fair that a
customer paying $50 a month would have the same access to the resources on that server as the customer paying $1000 a
month.


(no fair share technology between vhosts on a VPS just between VPS’s on the physical server)


“Signature is an ideal solution we don’t need as much control over as server as we used to.


We also like the Signature
control panel better and with the direction Signature is going upstream with more resources this seemed like a good move
for us because we won’t have to move the customers.”


They have 16 live websites on Signature and are very happy with how things are working out.


The 5 free modules work fine on small Signature and then when their customer needs more modules they charge for those
modules and upgrade to a larger Signature account.


Challenges of changing from using VPS to Signature:


Signature deals with PHP and MySQL different than VPS so some configuration changes were needed


They had access to Verio development to assist in getting things working


They also had a meeting with Verio and had 8 things that needed to be accomplished for the transition to work.

Some were Accris
oft’s items and
others were Verio’s


They use C
-
Archive to tweak a few things and unpack the install of Accrisoft on the Signature servers after the new Signature se
rver is
ordered.

(Mark did not know the details but is happy to have me speak to Phil Zarpho if needed.)


They would love to integrate Accrisoft more with the Signature control panel so that applications such as blogging could be
surfaced via Accrisoft modules to Verio customers.


“I would love to see a check box in Signature to offer the 5 modules for
free and then we could charge for other modules.”


They offer all the tools for solution providers to bill customers, collect $, (ABT used to be called RBT) they actually built

their own Basecamp and other back office tools.

-

37

-

Proprietary and Confidential

April 2009

Partner Insights on
Product Selection

-

38

-

Proprietary and Confidential

April 2009

How our Partner’s Determine Which Product to Sell
to Their Customers


“Resources”


“I determine what plans are best based on the components that
they need on their site. Again, most are for web presence only, also
because I have Windows platform only, this limits what I offer. I
use Window Premium Plan for those that need more applications.”


“It is easy


1. Platform Windows or Linux


2. Price
-

*All customers are price sensitive


3. Volume of traffic


4. Business objective of site today and in the future.”


“I pretty much just sell hosting plans. The customer decides what
they need.”


-

39

-

Proprietary and Confidential

April 2009

How our Partner’s Determine Which Product to sell to
Their Customers


When making a decision on what platform to put a customer on, he
has three decision criteria:


1. Will the site see a high level of traffic?


2.

Is the site high profile or for a celebrity?


3. Are there high integrity/ security requirements?


If the answer to any of these is yes, the site goes to a dedicated solution or
maybe VPS.”


“ We go through exercise with clients to understand the exact
requirements and place them on the correct plans. Then we will do
sizing and other types of things as needed.”

-

40

-

Proprietary and Confidential

April 2009

Applications In Use
and Market Trends

-

41

-

Proprietary and Confidential

April 2009

Applications Being Used to Solve Business Problems


Email


Sendmail, G
-
mail, Exchange, Zimbra


Email Campaigns


Emma, Mailman


Ecommerce


Zen Cart, Miva, osCommerce, Authorize.net


Wikis


MoinMoin, Media Wiki


Blogs



Word Press



Other Plug
-
ins or Modules



Bid calculator, Online quotes, Inventory
searches, Distance learning software,
Customer developed applications for billing,
automotive searches, real estate and
memberships, Product catalogs, File Sharing,
Java scripts for promotions, Reservation
system, Online brochure, Appointments, Isapi
rewrite filter, pdf and zip file renderer


Cold Fusion


Moodle


Quick Base


Accrisoft Freedom


CMS


Drupal, Joomla


Monitoring


Montastic, Zenoss, Nagios


Magenta


Other Open Source


Web Dav, Cal Dav


Microsoft


Share Point, Expressions


Work Force Management and HR


Kronos


Forums


Snitz

-

42

-

Proprietary and Confidential

April 2009

Application Usage


Market Trends


“Business applications are moving to the web. The rise of Web
-
enabled applications


such as email, CRM and financial applications


offers new ways for small businesses to access key applications
that are stored, managed and maintained in remote locations. As a
result, “where” applications reside


internally or externally


is
becoming increasingly irrelevant to the users who need access to
information resources.”
Biz Tech Reports 2007 SMB Executive Survey



“SMBs as well as Enterprise companies will delay custom development
projects and reduce costs by making due with off
-
the
-
shelf applications.”

Ray Boggs IDC VP, Small/Medium Business and Home Office Research March 2009


“One of the most striking indicators of the rapid adoption of Web
applications by consumers came during the 2007 U.S. tax season, when
more Americans used the online version of Intuit’s popular TurboTax
software than used the traditional packaged version.”

The Big Switch by
Nicolas Carr


-

43

-

Proprietary and Confidential

April 2009

Application Usage


Market Trends


GODADDY Streamlines Application Installation Process for Hosting Connection


GoDaddy’s Hosting Connection is an online marketplace where customers can access and
install popular open source applications


such as photo albums, blogs, message boards and
wikis


on their websites. The service is free for customers to use. In previous research, we
were a bit skeptical about the offering because it seemed too big a step up for non
-
technical
types. However,
GoDaddy has simplified the installation down to a point
-
and
-
click
process, making it usable for almost anyone.

No configuration or coding is required.
GoDaddy discloses 1,000 installations a day and is trying to create more traffic and
participation by encouraging users to rate and comment on applications. While progress is
modest, the premise behind this product is solid. Hosters need to do everything they can to
make customer websites as functional and feature
-
rich as possible. Equipping customers with
such capabilities will help hosters compete against services like Ning, which provide a
platform that has many of these features and functionality already built in.
Tier 1 Research
Mass
-
Market Hosting


Spring 2009



Hosted APPS 2010
-
2011


SMBs moving all their applications online; online collaboration is the norm.
Tier 1 Research
Mass
-
Market Hosting


Spring 2009



-

44

-

Proprietary and Confidential

April 2009

Secondary Research

-

45

-

Proprietary and Confidential

April 2009

Secondary Research


Questions to Consider

Do business technology needs evolve over time so that if they start out on a
Shared solution they will eventually need to move up to a VPS?



Article discussing the reasons for the recent VPS growth


Date: January 2009


Source: Tophosts.com


Title: VPS Hosting Reviewed


URL:
http://www.tophosts.com/articles/008162.html



“Virtual dedicated servers will continue to grow as more businesses upgrade from inflexible and
lower performance shared hosting and start to use hosted infrastructure for their applications.
While virtual servers have many names these days
-

VPS, VDS, Grid, and Cloud
-

it’s really the
flexible and on
-
demand nature of virtual dedicated servers that are fueling growth.”



Reasons that were repeated on numerous blogs:


More server space


Need better technology


Bandwidth


Better resources/RAM


Multihosting


Requirement for more control of hosting plan


Security


Email archiving


Message Mirroring

-

46

-

Proprietary and Confidential

April 2009

Secondary Research


Questions to Consider

What is the market/customer perception of Shared Hosting solutions
vs. VPS/MPS solutions?


The Web Hosting Dir.com


Dedicated Server


More Reliable

Whole Hardware is dedicated to You

No Expansion need for the long term

70
-
100 domains



VPS


Not as Reliable (As domains increase Reliability may take a fall)

Still sharing with up to 10 Customers. This service is good for hosting a more limited number of domains.

To Expand becomes very expensive

More scalable than a dedicated server

20
-
30 domains



BLOG on Web Hosting Dir


Q: What is the difference between Shared and VPS? Isn't a vps supposed to be more reliable, however, if the server hangs, doe
sn'
t
the vps serer hangs with it as well?


A: The difference between shared and VPS is with VPS, you have access like your own server. You have ability to restart servi
ces

and your apache server if necessary. You also can host multiple domains, and be your own reseller, install applications in th
e
server. Shared plan is limited to manage your own account.


A: A VPS is basically a managed server except the server resources are distributed between multiple people. On a VPS you will

ha
ve
full root access to run server level tasks. A shared plan is just a way to host a basic website.

-

47

-

Proprietary and Confidential

April 2009

Secondary Research


Questions to Consider

What is the market/customer perception of Shared Hosting solutions
vs. VPS/MPS solutions?


Security Risks of using Shared Hosting


Source: Webonizer


Summary: Article discussing the risks that are associated with using Shared Hosting


URL:
http://www.webonizer.com/articles/39/security
-
risks
-
of
-
using
-
shared
-
hosting.html


Important Info:


1. The problems with using a shared host are that they open security holes that are
realistically impossible to completely abolish, especially if each domain has the ability to
run scripts (program files written in languages such as PHP, PERL, ASP, etc) or has shell
access.


2. While it is possible for software developers to create some safeguards, there is no
failsafe protection for your files and data on a shared host.


3. The most secure environment for your website is a dedicated server (or a shared host
that you own and whose domains are all under your control).


-

48

-

Proprietary and Confidential

April 2009

Secondary Research


General Trends


Internet Security: ecommerce Growth Drives SMB Security Concerns


Source: Ca.com


Date: 2008


Important Information:



Small and midsize businesses (SMBs) are more reliant on the Internet than expected


While many SMBs rely on the Internet in some way, over half actively use the Internet to
transact their day
-
today business. Those who rely heavily on the Internet expect to
significantly increase their usage within the next two years. A total of 608 IT and business
professionals participated in the survey.


“Communication, image, and practicality are significant factors driving the growing SMB
use of the Internet.”


“A resounding 91% have a worldwide website. While the midsized businesses polled were
more likely to have a website (94%).”


“84% of small businesses also have and actively use their own websites.”


“It seems a new trend is emerging and SMBs are increasingly taking advantage of the
opportunity to sell online…”


“SMBs also look to the Internet to improve customer and employee communications. For
example, 38% percent employ extranets to communicate with partners, suppliers, and
customers, and 72% already use intranets to facilitate communications with employees.”

-

49

-

Proprietary and Confidential

April 2009

Secondary Research


General Trends


CRM Trends for 2009 Include Social Networking


Source: Web Host Directory


Date: January 2, 2009


Important Info:


1. "During this economic downturn, customers tell us they need bulletproof financial
arguments to get funding for their projects," William Band, Forrester vice president and
principal analyst, said in the report.


2. Customers are getting harder to win and keep, Forrester said, and the solution is
improved customer experience. "Good customer experience is highly correlated to
customer loyalty," Forrester said. To improve the customer experience, enterprises will
integrate CRM functionalities better with their back end enterprise resource planning (ERP)
and supply chain management (SCM) systems, Forrester said. They will focus more on agile
and usable solutions tapping these back end systems to support customer
-
facing
applications.


3. Another way to improve customer experience will be to incorporate social networking
capabilities in CRM applications, and Forrester predicts that enterprises will begin doing
this in 2009. This will be the expansion of a trend kicked off by Salesforce.com (NYSE:
CRM) when it implemented social networking features, in Force.com for Facebook recently.


4. Enterprises will look at trends like service
-
oriented architecture (SOA) and software as a
service (SaaS) to bolster negotiations with vendors on pricing and licensing in 2009, while
key vendors such as SAP (NYSE: SAP), Oracle (NASDAQ: ORCL) and Microsoft (NASDAQ:
MSFT) will be pressuring them to upgrade, Forrester predicts.

-

50

-

Proprietary and Confidential

April 2009

Secondary Research


General Trends


Tech Fights Effects of Frail Economy


Source: Philstar.com


Date: January 12, 2009


Important Information:


With the global economy in crisis, even the new technologies could feel the crunch. A
new IDC report finds more concern about the economy among SMB’s worldwide than
interest in the most potentially innovative new technology. The study covered SMB
owners from different regions to assess their current level of interest in or concern about
future economic growth and business conditions, as well as four technologies (“green
technology, SaaS, virtualization and online business resources) that could be considered
“cutting
-
edge” for SMBs


“While there are differences across regions, SMBs in general are currently apathetic
when it comes to new and emerging technologies, but are showing a great deal of
concern when the discussion turns to economic issues.”


“Despite the economic down turn, higher demand for outsourcing combined with
increasing externalization of custom application developments will drive IT services
spending upwards by five percent this year.”

-

51

-

Proprietary and Confidential

April 2009

Secondary Research


General Trends


3 Impressive Social Networking Trends


Source: Kwiqq


Date: March 27, 2009


Important Information:


1. 2 to 3 years back social networks was considered a marketing tool for the young generation but with the
growth of the LinkedIns, Xings of the world, there has been a major shift. Facebook serves as a good
example, it added twice as many 50
-
64 year olds visitors (13.6 million) than under 18s (7.3 million).



Pringo Highlights Business Social Networking Trends for 2009


Source: Reuters


Date: November 2009


Important Information:


1. The 'new' workforce: As Millennials continue to replace baby boomers, the way employees operate and collaborate is
going to change. They will move further away from the use of email as the primary form ofcommunication and move
towards instant, quick forms of correspondence, including IM, online chat, text, micro
-
blogging and other 'real
-
time' tools.


2. Market research: As budgets continue to tighten, market research firms will be limited to the amount of on
-
site analysis
they can conduct, but will still need to cover a broad geographic scope to ensure their data is statistically valid. They wil
l
likely turn to social
-
networking platforms to organize and conduct their studies. By identifying and interacting with various
customer segments, organizations can design products for those segments that are based on direct feedback received
through online communities. Active participants of such communities will then be 'beta' users of the new product and its
biggest advocates on other social networks.


3. Intranets: Organizations will incorporate social
-
networking capabilities into their intranets to enhance internal
communication between employees as well as external communication with partners. This will allow colleagues who share
common geographic, demographic or functional boundaries to communicate easily within groups and share knowledge,
experiences and best practices.

-

52

-

Proprietary and Confidential

April 2009

Secondary Research


General Trends


Why every business needs a website


Source: The Code Project


Date: 2007
-
older


When asked how important is a company’s website to your decision to use their product…


39.07% said Very important
-

a bad website means a bad product


46.73% said somewhat important


(total surveyed = 1592)



Website the Most Important Tool


Date: 2008


Source: Rosiedog Creative Design Studio


Important Info:


A website is now the most important marketing tool a business can utilize. Having an online presence
now means much more than having a fancy looking website. It means having an easily accessible place
for your customers to learn about your company, your products and services, and, if you feature
testimonials, a great way for them to hear from others who have used your business in the past. It
also provides easy access for them to contact your company if they are interested in your services, or a
great way to sell your products directly to your customers.


-

53

-

Proprietary and Confidential

April 2009

Internal Interview
Write
-
ups

-

54

-

Proprietary and Confidential

April 2009

Internal Interview
-

Toshi Yamasaki


Business Class Shared

VPS/MPS

Other Thoughts or Comments

Business Class Hosting is used for

1.
Web hosting

2.
Robust web hosting

3.
Just create and design
a website

4.
Verio provides robust
email

5.
Allows the customer to
focus on their
development

6.
High End Business
Class hosting can host
up to 1000 websites
(actual number still to
be determined)


1.
Freedom and management have tradeoffs

2.
The more freedom you have the more technology
you need to learn

3.
What is the market size of Customer B?

4.
In the future using cloud we will sell “computing
power


5.
Email and web services will use this computing
power platform

6.
Other SAAS offerings will also use this platform
(CRM, HR, accounting etc.)



1.
Existing customer types that
buy VPS today will shift to
purchase new business class
shared

2.
The VPS target customer of
tomorrow is a different
audience than we sell to
today


-

55

-

Proprietary and Confidential

April 2009

White Board Discussion with Toshi
Yamasaki



Customer
Type A

Customer Type B
(Traditional
Dedicated Server
Customers)

Business Class Hosting

VPS Today

VPS Tomorrow

GMO

Hewitt

HR

Gaming

They have an application
(could be purchased or
developed in house)

Sugar CRM

Start up co provide VOIP

In Japan a reseller is
providing a storage service

Multiple servers
-

clustering


Web hosting

Sub hosting

Web designer

Overlap Between
Customer Types

-

56

-

Proprietary and Confidential

April 2009

Business Class Shared

VPS/MPS

Other Thoughts or Comments

1.
He is neutral about the
products and looking for
the market tell him what
the value is.

1.
He is neutral about the
products and looking
for the market tell him
what the value is.


1.
Take a VPS peal it back and see what % is web
hosting vs other applications. And what are those
applications.

2.
What are the key themes and patterns. This type
of web application or hosting, industries, needs.
Create a template for typical configuration look at
the price for retail and cost to reseller. Can this
same template be used on VPS and BCS


if only
on VPS why? What is the cost to the reseller/retail
for this configuration.

3.
What does Accrisoft moving from VPS to new BCS
tell us about the future? (They offer a set of
webhosting applications.)

4.
I would weight the answers as 1 pt internal, 3 pts
customer and 10 pts the market.


Internal Interview


Steve Renda

-

57

-

Proprietary and Confidential

April 2009

Shared

VPS/MPS

Other Thoughts or Comments

1.
For some customers shared is
not secure enough.

2.
No develops on shared if a
customer has their own
applications they need a VPS.

3.
If start on a shared it is the
natural upgrade path to a VPS.

4.
Cbeyond


Shared host plan
love DIY. But still need more
information/instructions on
how to use it.

1.
Customers (resellers) who want
to setup their own mini hosting
provider company and divide
up a VPS into mini
-
shared
accounts.

2.
For websites
-

just like shared
but more private.

3.
Best used for custom
applications and design.

1.
She has been asking the same
question. (What is the value to
the customer and what business
problems are solved?)


2.
Verio control panels are kludgy.
How It is hard to tell where to do
what.

3.
LE
-

Needs to be simple so my
“mom” can do it .

4.
Verio needs an online chat tool.
(Industry standard)

5.
Mid
-
line


expect more tools,
market sites, adds to local
regions.

Internal Interview


Wendy Pearson

-

58

-

Proprietary and Confidential

April 2009

Other Thoughts or Comments

1.
Recognize that each economy has a different set of requirements. OEM issues in NZ/Australia are different than in
Brazil. Development of the economy and infrastructure for the SMB.

2.
E
-
commerce is a key driver for larger website needs. Which is not available in Brazil because the banks do not want
to setup merchant accounts. (thus no web transactions)

3.
Majority of OEMs focus on LE to Mid hosting, extension of access or portal to increase usage of their main products
(increase customer stickiness). Often times they want to provide this LE hosting account for free.

4.
OEMs target lower web user more casual to mod users power web uses don’t buy from their ISP (OEM).

5.
Verio will need to assist OEMs to enable them to think more strategically about selling higher MRR products.

6.
OEM up
-
sell story


the family of hosting give away LE hosting then in 60 days they call the customer back and up
-
sell them. This must be a smooth transition.

7.
VPS/MPS vinstalls focus on the SA


no business applications. OEMs sell business applications hosted on a server not
servers to their customers. In order to be successful we need to create a solution in a box for business aps.

8.
True business class hosting is computing power that is safe and secure.


Internal Interview
-

Peter Von der Linde


-

59

-

Proprietary and Confidential

April 2009

Business Class Shared

VPS/MPS

Other Thoughts or Comments

1.
Business’s who need a
basic

2.
Website

Business’s who
need a basic email



1.
Power


2.
Functionality

3.
Control


4.
More management control


5.
Performance



1.
Hasn’t heard yet what needs/benefits of
Business Class Shared will be


2.
With the release of Unlimited Shared
plans no one was educated on how to
differentiate the Unlimited Shared plans
and VPS


3.
We are losing VPS sales to new
“unlimited shared” but he does not have
a specific #


4.
Looking forward to having this project
information/findings passed onto sales to
help determine which product will fit the
customers needs the best.


5.
**Note Scott is not on the front lines and
asked I speak to Matt Van Dam as well.*


Internal Interview


Scott Calvert

-

60

-

Proprietary and Confidential

April 2009

Shared

VPS/MPS

1.
Fully managed environment

2.
Out of the box ready

3.
Relatively easy to use control panel for a non
-
technical person to complete day
-
to
-
day tasks

4.
Lower price points allows 1 customer per
hosting plan (resellers)


1.
Provides enough resources for high end websites

2.
Business applications and tools

3.
Good ecommerce platform

4.
Ability to pass PCI scans

5.
Enough control to manage the server

6.
Multiple customer hosting or one customer with multiple
sites

7.
Used less to subhost now than in the past

8.
Now seeing more 1 purpose use servers (Database or
web server) On the high
-
end seeing servers dedicated to
one application

Internal Interview


Matt Van Dam

-

61

-

Proprietary and Confidential

April 2009

Business Class Shared

VPS/MPS

Other Thoughts or
Comments

1.
Need it simple

2.
Windows .net similar to what a Unix VPS can do
(except root access is not needed)

3.
HE Unix shared like Windows Virtual Web
servers

4.
Next release of Unix Shared plans will have
more CPU/RAM/and can subhost (multiple IP’s
by the end of the year)

5.
Signature II


own web server, database off box
and email off box (that way when Verio needs
to update the DB server only the DB server is
touched


reducing risk)

6.
New Business Class shared will allow customers
to grow without pain (simply upgrade resources
in place)

7.
Web server


customer will have own dedicated
resources no fair share (improved performance)

1.
IT background

2.
Multiple applications on
the same box running at
one time

3.
Custom built
applications

1.
Tech Ed conference
in May is a good way
to learn about .net
and speak to
developers

2.
On VIC there are
white papers about
.net too

Internal Interview


David Kidd

-

62

-

Proprietary and Confidential

April 2009

Business Class Shared

VPS/MPS

Other Thoughts or
Comments

1.
New BC shared will provide an upward growth path
for non
-
technical businesses

2.
No it investment (no need to hire or learn
themselves)

3.
Same resources and capabilities of VPS

4.
Move up without changing platform

5.
Will have all the capabilities they need but they can’t
change and break it

6.
New feature software firewall

7.
Web presence, just develop the website and focus on
their business

8.
Customers who just want hosting

9.
Some existing customers have several managed
Windows accounts and development teams

10.
If you want a consistent website experience then you
need BC Shared with dedicated resources (VPS fair
share can cause the user experience to be different
at times)

11.
Cost of IT support is an issue

1.
Open to a large
number of customers if
they understand how
to use it

2.
Need to have technical
skills to take advantage
of VPS

3.
For applications other
than web hosting

4.
Investing in IT is not
an issue

5.
Some tech people want
to install their own
apps

6.
For example can build
extras into email
system



1.
It would be a good
idea to move the
VPS down stream
too

2.
Exchange is not
part of webhosting
(email is a closely
related product to
hosting but is a
different product


Internal Interview


Mark Fleming

-

63

-

Proprietary and Confidential

April 2009

Business Class Shared

VPS/MPS

Other Thoughts or Comments

1.
A hobbyist needing a
website. If he eventually
needs more complexity
then he will need to move
to a VPS.

2.
A hobbyist who grows but
just needs more resources
on the box he is on.

3.
Delegated e
-
mail
administration. (A reseller
can assign someone within
their customer’s company
to create email accounts.)

4.
Lower cost, need an entry
level plan. One step
-
up
from a MySpace page.

5.
It is just there and it
works. (ie. WordPress)

1.
The need for multiple subhosting.

2.
The need for more complexity.


3.
VPS/MPS is a flexible environment
that is still managed.

4.
The MPS is an option that is not
offered on shared. If a customer
is tired of the limitations of
sandboxing then they can get
their own entire box. Or if they
want guaranteed resources like 4
GB of RAM or more diskspace
than VPS offers.

5.
V
-
installs help users install
applications and they can choose
which version even older versions
if they want them.



1.
Both could solve the issue of
seamless migration if there is a path
from Signature to VPS or if add a LE
VPS. The goal of BCS is to have a
seamless migration path from LE
BCS to HE BCS.

2.
IP portability issue is being worked
on by Gus’s team.

3.
On BCS you sacrifice options for
simplicity.

4.
Is there a single user option on the
new BC plans?



Internal Interview


Bill Davis

-

64

-

Proprietary and Confidential

April 2009

Business Class Shared

VPS/MPS

1.
Economic driver
-

price point, but willing to
pay more based on traffic/performance

2.
Skill


limited technical ability

3.
Doesn’t need/want to care about or manage
a server or email

4.
Prefer as much to be done for them as
possible (SAAS model preferred)

5.
Pre
-
configured and ready
-
to
-
use solutions

6.
Lowest cost as possible for as much
performance as possible

7.
Online brochures

8.
Very easy



1.
Hosting multiple domains


ecommerce is the main driver

2.
Dedicated server


complete control without the cost of a dedicated
server

3.
Understand how to administer some stuff

4.
More business driven web server


more resources

5.
Managed service foundation


security patches, core services taken care
of, hardware and backups

6.
Install own applications

7.
A business can set own performance levels by either installing 1 website
or hosting 50 on the same VPS (1 business or multiple businesses)

8.
Make repetitive tasks easier like installing PHP

9.
Customers can tweak, streamline or optimize for their specific usage
(email and DB)

10.
Uses beyond web hosting

11.
IT services less expensive

12.
For companies who want to build their own solutions and use the server
as a delivery platform

13.
For a company who is technical but doesn’t want to or can’t afford to
invest in or in infrastructure or be responsible for keeping the server up

Internal Interview


MCS Team