Managed Hosting Services: The Next IT Dinosaur?
Years ago many companies realized that building and maintaining data centers is a very expensive proposition that's better left to the experts. The obvious solution was for specialized data center management companies to package collocation and managed hosting services for their customers. Long the bread and butter of many data centers, is there still a place for managed hosting services now that public cloud infrastructure as a service is a well-established $13 billion industry?
The origins of managed hosting services date back to the mid-1990s, when businesses were scrambling to build websites and Internet presence. By placing their web servers in data centers rather than keeping them on premise, companies were able to gain access to faster networks and professional data center environments at the fraction of the cost.
That was then. Today, many organizations, ranging from tiny start-ups all the way up to the very largest companies, have moved away from managing their own servers and infrastructure entirely. They have switched to using a combination of software as a service application subscriptions and relying on infrastructure as a service providers to provide the infrastructure for when they do need to build their own applications.
The flexibility, speed, and minimal start-up costs of moving to a public cloud environment is far more attractive for all but the most specialized business requirements. Even the US government, with its stringent security and survivability requirements, is mandating using public-like cloud services.
Where does that leave managed hosting services? In today’s world, they would seem to have become outdated, more costly to maintain than cloud infrastructures, and not as flexible as collocation options.
There is still plenty of room for managed services, but they need to change to meet new customer demands. Infrastructure as a service solutions have quickly evolved into complex toolkits. Anyone who has tried to manage a large application in a public cloud environment knows that care and feeding can be just as complex, if not more so, than managing a rack of dedicated servers.
Opportunities include building automated support tools targeted to manage cloud environments. Metacloud, recently purchased by Cisco, and Cloudscaling took this approach. A second approach is to provide management services to support infrastructure as a service environments. Think of these as the new breed of managed hosting, where the vendor is supporting cloud environments instead of servers. One example is the Datapipe Managed Cloud, a suite of managed services that includes architecture and design, monitoring, OS patching and maintenance, and change management of AWS environments.
A third opportunity is to create attractively priced, managed support services for the companies that still have substantial investments in collocation. This will allow companies that have a need for private application environments, for whatever the reason, to concentrate on their core business instead of having to maintain complex IT environments on their own.
In the end, my foggy crystal ball says that when there is a market vacuum, new companies will quickly emerge to fill it, so watch out for a new breed of services to manage your thorny cloud environments.