Linux Web hosting catches on: the growth of Linux has changed the face of Web hosting and the way resellers have to deal with new customers
At the start of this century the Web hosting market in Canada and the rest of the world was a pretty simple, yet exciting one for resellers.
It was doubling in growth and worth around US$4 billion. IDC came out with a forecast that would see the sector grow to US$20 billion by this year.
Value added resellers who wanted to provide a low-cost, low-maintenance solution for clients with Web sites or those who found handling their email server a nightmare just had to partner with a local service provider and get a referral fee, usually 10 per cent, for each seat and look smart doing it.
On the horizon was application hosting. Application hosting was sure to be challenging but that did not concern resellers because it would mean more money in their collective pockets.
And, an Insight Research report said the demand for managed hosted services was one area not affected by the high tech slowdown even if the tech bubble claimed Web hosting companies such as Exodus and Digital Island.
The market was almost complacent until the Penguin waddled in. Linux has basically shaken up what was a dull and overly commoditized market and the open source community is again challenging Windows in this area. The only difference is Linux may be winning in the worldwide Web hosting market place.
According to NetCraft, a Bath, U.K.-based analyst firm that tracks the Web hosting market for resellers, Linux-based hosting accounts are now just under 67 per cent of the market worldwide, while Windows-based accounts are 21.5 per cent and declining. Currently, there are a whopping 33,329,879 Linux hosted accounts as of this month, NetCraft reported.
The shift in the market has forced companies such as SoftCom Technology Consulting Inc., the providers of myhosting.com and mail2web.com services, to start offering Linux-based solutions. In the past, SoftCom was totally devoted to the Microsoft platform.
"Customers are asking for it in the small-to-medium sized business market. They want choice to run any type of script language, and for us to be successful we have to embrace Linux and support Microsoft," said Tony Yustein, the CEO of SoftCom.
SoftCom's Linux product is similar to its Windows offering with basic domain name, hosted applications, email hosting, Web hosting and management of customer lifecycle.
It even kept the price the same for both packages: Approximately $1,500 a month for 100 seats.
According to Yustein, Microsoft has lost its perspective in the Web hosting market. He questions the software giants' commitment to this market and believes it is too centred around its Office productivity application.
"They do not see enough value in this market and they look at dollar amounts," he said. Yustein believes Microsoft wants dedicated servers in a one license per server environment because it creates multiple revenue streams for them. "They are not concerned about (Web hosting) but more on Office. If you are Microsoft and you look at sources of revenue they would concentrate on Office not Web hosting for price share value," Yustein added.
For example, Microsoft Front Page and that package's extensions could potentially support millions of users in a shared hosted platform if the user purchases the full Office suite, but according to Yustein Microsoft completely disregards that option.
Yustein added that SoftCom is not abandoning Microsoft technology. He adds his company will continue to support it today and in the future. However, he believes the future of software will be on a hosted environment.
Alec Taylor, senior manager of platform strategy at Microsoft Canada Co. of Mississauga, Ont., said hosting will have a bigger role in the future, however, he dismisses the notion that Linux is overtaking Windows in this market.
He cited San Diego, Calif.-based Port80's latest report, which states Microsoft's Internet Information Server (IIS) is outpacing Linux in the Web hosting market. Microsoft IIS has 54 per cent of the worldwide market, while Linux has 20 per cent, closely followed by Sun's Netscape enterprise server at 15 per cent.
Taylor said that the vast majority of B2B sites, mission critical applications and Internal portals are on Windows.
Taylor cites service provider InDimensions Entertainment Group of Toronto as an example. It hosts Web sites for musical acts such as The Cranberries, Ziggy Marley and Canada's own Blue Rodeo. InDimensions used a Linux-based Web hosting solution for these acts only to find it had to deal with long development cycles and no single source for technical support. It also put a burden on the company's IT staff who had to debug scripts for complex e-commerce systems.
Site reliability was crucial for InDimension clients so the company switched to an Interland and BlueHalosm shared hosting environment built on Microsoft Windows Server 2003.
"As you can imagine in arts, they wanted a unique customized Web site that can interact with fans and facilitate commerce with tickets and music sales, and most of these bands do not have a tonne of money to do this."
Taylor also addressed Yustein's concerns over Microsoft loss of Web hosting perspective saying a recent IDC study found that licensing costs represent only five per cent of the total cost of ownership.
And he offered this comparision with Linux: "If I am buying a dog, I can go to a purebred or down to the pound for free. With the purebred I am in a good position to know who the parents are and if their are any problems. At the pound, you do not know where the dog has come from."
Both Yustein and Taylor agree the market will continue to commoditize and while the lines may blur between Windows and Linux it will be ultimately up to the customer to decide which route to take. Resellers must choose the lesser of two evils because their reputation will be on the line depending on which service they recommend to clients.