Study Predicts Internet Hosting Companies Targeting SMBs, Web Services to
Brighten a Weak U.S. Economy with Strong Future Growth
Tomorrow we will be announcing a new study with Tier 1 Research, which
highlights a new direction in enterprise applications, Linux hosting,
Web services and other aspects of the Internet.
We are also announcing a price drop in our HSPcomplete 2.0 product - For
$5K - you can start an automate hosting business with a powerful server
software that allows you to support over 200 real, live Web customers on
a single Intel-base Linux server.
For the past 18 months, we have been developing our HSPcomplete 2.0
product, working in parallel with Tier 1 to study hosting providers,
SMB/ large hosting customers, enterprises, ISVs and other vendors to
look at the state of both the Internet and Web hosting (see press
Next week, we will release the results, which had some surprising
- Web services, Web hosting will contribute significantly to short-term
turnaround in the Internet economy (over next 3 years)
- Outlook for the hosting industry is positive (expected to reach $17.1
billion), although it will be SMALLER HSPs that will be driving the
industry - not the marquee names we always read about!
- Reduction in the price point of hosting plans and new products, like
virtual private servers - will increase the number of SMBs (8.3 million
- 67% expected to need some Internet presence - IDC) that get online and
who offer e-services through their Web site.
**The smaller Web hoster will be under 10 people, managing 20K hosting
accounts, scaling this business to over 100K accounts. (plug for us) The
most successful ones will use an automated HSPcomplete system to manage
their business from a user interface, without having to buy new hardware
or hire a lot of people! We've even lowered pricing - SMBs can have
their own automated hosting business for just $5,000.
Study Predicts Internet Hosting Companies Targeting SMBs, Web Services
to Brighten a Weak U.S. Economy with Strong Future Growth
Results Reveal Growth Will Be Driven By Smaller, Aggressive Hosting
Companies - SWsoft Responds With a $5,000 Special Packaging of Global
Hosting Automation Solution*
S. San Francisco, Calif., August 14, 2002 - SWsoft, Inc., leader in
hosting automation and enterprise server software (www.sw-soft.com),
today announced results of an 18-month market analysis study, conducted
in parallel to the development of the HSPcomplete 2 solution, which used
survey data, statistical analysis and in-depth interviews on hundreds of
service providers to analyze and forecast the Web hosting industry. The
study concluded that, over the next three years, Web services and small
to mid-sized hosting providers will be the driving force behind
explosive growth in the service provider industry, which is expected to
reach over $18 billion in the U.S. by 2007 (IDC 2002).
Excerpt from the report: "The study found that smaller HSPs have net
profits of over 15% and an annual growth rate of 50%-100%. These
companies are aggressively launching new hosting products, implementing
technologies to automate different aspects of their business and need a
way to keep operational costs low while driving profits up."
"Information Technologies are not hyped anymore. It's now considered a
normal industry, with potential to be a very profitable market segment."
says Serguei Beloussov, CEO of SWsoft. "Despite rocky times in the
stock market, it's widely acknowledged that the Internet is useful and
here to stay. All businesses, even the smallest ones, will have some
sort of Internet presence. Eventually, all will require dynamic
e-commerce sites. Smaller HSPs achieve high profits and fast growth
because they are flexible and efficiently sell personalized services to
the millions of SMBs that will require web sites in the next few years."
SWsoft found that the largest growth sector was among smaller hosting
businesses, a market segment that reporters, analysts and other
influencers have traditionally ignored. In the US alone, there are
thousands of small HSPs, run by young entrepreneurs like study
participants Jordan Lowe and Daniel Brosk of Server Central Network
While still college students tinkering with a single 1U server, Lowe and
Brosk offered hosting services for friends and local businesses, quickly
growing their business to over 10,000 accounts on hundreds of servers.
Low overhead and aggressive customer acquisition made them profitable
from the start. To scale their business, they switched from manual
billing and new account creation processes to HSPcomplete's full
business lifecycle hosting automation solution, enabling them to reduce
account creation time from 45 minutes down to zero, reduce management
time of account receivables by 30%, and to process customer billing in
minutes rather than weeks.
"While not as glamorous as the high-end of the market to some, the
shared, VPS and low-end dedicated hosting sector truly represents the
"mass market" of hosting when it comes to the pure volume of
opportunity," wrote Joshua Beil, VP Research and Development for Tier1
Research in the report, 'Mass Market Hosting.'
Jackie Yung, founder of OnSmart Networks (http://www.onsmart.net
<http://www.onsmart.net/> ) and participant in the study, added, "I
launched a hosting service with $10,000, and from day one used an
advanced automation system with redundant hardware to offer a range of
complex service plans, including Virtual Private Servers and managed
application hosting packages. HSPcomplete is so customizable and
extendable that I decided to use their unified management platform for
all hosting accounts - shared, VPS, dedicated."
HSPcomplete - Everything but the kitchen sink. . .
Unlike simplified controls panels such as Plesk, C-Panel, and
WEBppliance, HSPcomplete is a full-business life-cycle solution that
includes integrated billing, automated account creation, anonymous
reseller channel management, hundreds of control panels and the ability
to manage a wide range of hosting accounts - shared, VPS, and dedicated.
This automation solution is often too expensive for smaller HSPs, who
are forced to develop only a portion of the components (i.e. control
panels) on their own.
Designed for Global Hosting - New Packaging to Meet Needs of SMB-Centric
"During extensive discussions with partners and customers, we recognized
the need for a package that fit with the budget of smaller HSPs. We
added modular and scalable architecture to our $100,000 Global HSP
Package to better service the needs of entry-level to mid-sized hosting
providers," said Craig Oda, VP, Business Development, SWsoft.
Working to help smaller customers grow their businesses, SWsoft released
a $5,000 promotional package for a no-compromise solution which provides
the infrastructure and tools necessary to run a fully automated hosting
business. Highlights include:
* Comprehensive billing system integrated with automated new
account provisioning and the ability to handle usage-based charges and
* VirtuozzoT licenses that allow HSPs to partition servers to
offer both Virtual Private Server customers with dedicated-like features
(dozens per machine) or shared hosting accounts (hundreds per machine)
* Full licenses for all HSPcomplete modules (directors)
* Professional implementation and one-year of support
* Reseller capabilities that can be re-branded to fit the look and
feel of the reseller
* Comprehensive suite of secure web-based control panels for
customers, end-users, resellers, and HSP staff
Currently using the HSPcomplete 2.0 solution as the backbone of his
hosting operations, Todd Robinson, CEO Penguix (www.penguix.net), is
able to support hundreds of customers and resellers on a single server
and manage all system resources from a series of sophisticated user
"I was previously using too many resources on developing in-house
control panels and integrating third-party tools, but now with
HSPcomplete, I can focus on sales, marketing and services to increase my
revenue," said Robinson. "I especially liked the flexibility of the OS
and application templates which allow me to offer custom applications
for purchase and provision applications online. The seamless integration
with billing is important, as my customers are automatically billed for
purchases with minimal work on my end."
SWsoft will present study results - HSP problems, cost structures,
third-party software requirements, bandwidth and hardware usage, and
business models - in a free Web seminar titled "The New Face of Web
Hosting." For more information, see http://www.sw-soft.com/en/seminar/
Senior Marketing Manager
395 Oyster Point Blvd., Ste. 213
S. San Francisco, CA 94080
(650) 875.7185 x123