Answers to your questions:

1. yes, my target is those that have graduated from shared hosting, but not because of the reasons you might think. Instead we are targeting businesses that are ready to adopt on-demand services.

2. I think that the person you are mentioning is not our target customer. The reason for this is that folks that want collocation are usually programmers or web developers. That is a hard bunch to sell to, and our experience is that the margins are low from that group.

3. Trust is a huge issue in the entire Internet industry, if not all business.

3a: Correct – some business owners are not technical enough to get a dedicated server.

3b: True – an SLA is important, but every SLAI have have read won’t provide you with a reimbursement that is greater than what your hosting fees are.

3c: In this case, Colo is perhaps the best service. You mention the ISP providing support for lisp. This is another case where colo is the correct choice when the hosting provider does not have the technical staff to support the software you want to run. Some colo and dedicated hosting companies specialize in supporting certain software, and perhaps that is the answer in the situation you mention. I also thing that the Amazon cloud is another answer – more on that in a minute.

3d: Absolutely. Customers need to know when their servers are being maintained. That is true with any host, and is usually not a problem except in an emergency.

The last thing I will mention here is that on-demand application hosting, such as the Amazon Cloud, will most likely kill a ton of small datacenters in the future. Google, Microsoft, and Yahoo are hard at work on similar on-demand hosting platforms. It is possible to rent a small virtual slice of a huge datacenter that is better equipped than if you built one on your own.

I just activated Akismet. I was just lazy getting the API Key. Thanks.

thanks for the great article. I have some comments/thoughts/questions and would be great to hear your thoughts in reply:

1) I guess your target niche is people who graduate from shared hosting but not ready for their own IT staff, right? I know you would want to convert fortune 500 companies to use your service, but question its feasibility

2) People graduating from shared hosting are likely to experience distaste for hosting companies right? After all, they probably wouldn’t want to go the collocation route if they can avoid it. However, collocation afford them controls and that’s what people who have mistrusts want. How do you overcome that?

3) I believe trust is a pretty big issue here. I have done collocation before, and I have share hosting right now. I am not satisfied in either case. But I am technical, and I can handle my own administration if I do choose to (not to say I want to). However, it is difficult to have the trusts for ISP’s, for the following reasons. I will be blunt here to make the point, but please understand I am not smashing anyone, so my apologies first if anyone is offended.

a) let’s face it. system admins are a different bread, at least from communication perspective. I am a software guy, and I am not fully connected with sysadmins, and we can only imagine what regular biz guys think.

b) it is not well advertised about what type of SLA managed hosting has. Customers are comparing features, and they see that shared hosting offers better #’s than managed hosting (of course not true in real life). Maybe it’s written in some small prints somewhere, but where are all of the benefits that you are talking about written out in big prints?

c) IMHO, if I am looking for a dedicated service, I am looking to have ability to fully customize the environment. You might find some customers who are willing to let you have control, but for example, can you support me if I want to run lisp processes? The managed services isn’t about ISP’s having economy of scale, but rather about providing the necessary services to the customers.

d) Not only should ISP’s able to tailor to needs of the customers, but they should also be able to proactive provide all informations to the customers, for examples, patches updated, advanced downtime notifications, advanced capacity planning, etc. Otherwise it would be hard to distinguish between whether you really offer those services or just talk about them. Most of the time people just want to buy things and forget about it, but they would like to be informed of the work done so they know what they are paying for is value.

Anyhow, those are just some of my blunt thoughts. It would be great to hear from you about them, because I think those would be important for ISP to address to capture this in-between marketplace, but you might have already done that. Sorry if I have come across as too aggressive in my questioning and I apologize in advance.

BTW – I have a small suggestion for your site – if you are worried about having comment spams, use akismet plugin to capture them and simplify it for people to comment. My email caught your system msgs as spams and I had to wait for 3 hours before I can comment on your quality article. Others might have experienced the same.

Thanks very much for your time, sincerely,
yinso