2008-10-20 by 

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Will existing and upcoming cloud computing platforms spell trouble for traditional hosting providers? This is an important question, given the massive amount of new developments in that area. But it is really a matter of valid concern?

In an article by Trevor Orsztynowicz from LayerBoom, ominously entitled Hosting Apocalypse, the author outright predicts the end of managed (and other types of) hosting. His conclusion is based on the premise that at some point in the near future, cloud computing platforms from big companies like Amazon and Microsoft will beat traditional hosting providers in terms of both price and convenience. Given that names like Amazon C2, Google App Engine, Microsoft Mesh and IBM Blue Cloud seem to indicate that every global IT company is hopping on the cloud band wagon, it is very, very likely that distributed computing over the internet will be changing the Internet game. "The hosting space will change forever, because Amazon will eventually drop their prices by an *order of magnitude* and that has dire implications for the rest of the Mom’n'Pop hosting companies. If thousands of companies can’t compete with Microsoft or Amazon on price, and they can’t compete in terms of convenience, then why would anyone use them? If you have to buy individual servers, or even servers by the rack, then you’re not going to get the price you need to be able to compete. You also don’t have access to the handful of specialized individuals and hardware required to make things work on such a grand scale." Now, Trevor posted Hosting Apocalypse on the company blog of Canadian startup which aims to move existing information infrastructure to a "Cloud Computing" environment, compatible with Amazons EC2. You would not see similar opinions voiced on the websites of traditional hosting providers, and obviously not everyone will agree. So, if IT companies outside of the Big Four are to remain as players in the web hosting arena, what are they to do? For one, companies, big and small, are launching their own cloud offerings. From established names like Rackspace, which has Mosso, to small startups like CloudAPPy, the cloud offerings of the future may be as varied as the hosting plans of today. Not everyone will turn to the Big Four for his cloud computing needs. Some will prefer the boutique service and the personal attention the client gets from smaller company. The paranoid will shy away from sharing data with Google and Microsoft. Some kind of reseller market for the big services is also likely to emerge. Another factor that matters is the level of technical competence, and with this one, there are two extremes. On the one hand you have the people who cannot run their own servers and sites, and will rely on the wide existing spectrum of traditional hosting services -- from shared accounts to managed hosting. On the other hand, there will always be the geeks and professionals who love to tinker -- they will opt for co-location, dedicated servers, or maybe high-end managed service for their highly customized and sensitive web application. All kinds of hosting offerings will be with us for some time to come, and while cloud computing is an exciting technology that will certainly have an impact of the industry, the rumors of traditional web hosting's death have been greatly exaggerated.

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