Dan described the Managed Hosting and colocation sector as “on fire” The sector is humming – incredible growth, outstanding execution, blowing away expectations. I must say, looking back 5 years ago after the tech bubble collapse, I can’t believe how strong the sector bounced back from those very difficult times.

His presentation was focused on a future, and a longer view for the industry. The HTS conference is packed this year with the largest attendance of Datacenter owners, Managed hosting and colocation companies ever to attend this conference.

• Demand steady or increasing in all markets, driven largely by capex constraints and greater awareness and choices.
• Supply is growing more slowly in the past 18 months as the credit crunch has hurt the ability of providers to expand ( it is very hard to get mortgages, loans only on new datacenter projects). Expansion build-out of existing shells is occurring, but very little on spec.
• Demand Growth of 15% in 2008. (Steady and increasing in the out years) However after supply growth peaked at 7.5% in 2007 supply growth now has slowed to 5%
• Dan believes that supply growth will pick back up again in 2011

Conclusions – supply is tight, demand is high and growing…this very good news for the industry.

• Some other trends:
  • The green initiatives are more than just a trend as datacenter owners who don’t figure out how to maximize power efficiency will be painted as villains.
  • Internet traffic and services consumption are linked as Internet traffic growth has been doubling every year (2005-2007)
  • Prediction: 2011 -2012 - internet traffic will get an exaflood – it is coming with a new breed of applications (set to boxes HD Video, games, etc.) that will drive new traffic patterns. Growth driven by consumer broadband + applications (HD video) applications, which in turn will drive demand for Managed Hosting / Colocation Services…

Managed Hosting Services Highlights

• Incredibly fast growth 30%+
• $10 Billion worldwide revenue by end of 2008
• We’ll keep growth pace until at least 2011
• Good news, Dan believes that fears about slowdown in growth are wildly overblown.

Why is managed hosting growing so fast?

• Demographic shifts – new breed of IT employees that embrace outsourcing
• Growth in internet applications (SaaS) The acceptance and growth of browser based applications has been enormous!
• Ambiguity between web hosting and managed hosting has turned positive

Dan’s Key success factors managed hosting and services

• High margin services – and not too many – it is so tempting in our day to day business when a customer comes along and wants to come and give us money for a unique on-off service… at this point the answer has to be no – or do it through a partner.
• High level of support delivery is critical – don’t cut pay in support people or outsource support to save a nickel… what you are selling is support. Keep doing this well or you will head into a bad place… just as examples in retail like Home Depot and others who have struggled with customer service challenges – the whole business starts to slide into the toilet… High levels of support delivers a strong word of mouth buying cycle

Final thoughts, the industry is healthy and will continue to thrive. Customers are looking for the one stop shop, one company that is a trusted advisor to the customer. As customers place more eggs in the Managed Service bucket, the industry will need to tighten-up those SLA’s. Today some parts of the industry have been getting away with loose SLA’s… as customers get more sophisticated and have more on the line, they will become more demanding and require robust multi-component SLAs and back-it –up.

I arrived in Austin Sunday night to get ready for a factory tour on Monday, a kickoff dinner and then two days of briefings from Dell executives, including Michael Dell himself! Dell’s ISG business is growing at a very fast pace and continues to build momentum and focus within the broader organization.

We had a nice overview of the product roadmap, including some of the exciting enhancements Dell is making to their storage products such as the MD3000 and the new EqualLogic PS5000 series iSCSI solutions.

I really enjoyed the Council meeting and it reminds me all over again; what I admire about Dell is the way they and Michael Dell himself stay close to the customer. The entire purpose of this event is to “get it right” and determine meaningful ways to embrace change (including change in the manufacturing process) in order to make their customers more successful. Ah shucks, you may say that all companies behave this way… well I must tell you that is not true and at times, I find it difficult as we continue to grow to stay as close as I would like to all of our customers varying needs and directions.

This concept of gathering, internalizing and embracing customer feedback is a simple principle of Business Success stories. Always trying to improve the pace of change and build meaningful sticky relationships with customers. Dell’s very successful Ideastorm site where customers post product feedback and are active participants in the Dell community is a great example of how to do this right. No other hardware vendor that we have worked with or attempted to work with has ever gone to the extent of embracing change that Dell has during our 5-year relationship.

From the custom factory integration services to the attention to detail in the order and manufacturing, and logistics processes, Dell helps us execute for our customers and I must admit that we could not have built the business as quickly or efficiently without Dell!

So thank you Michael Dell for building a business that embraces change and is focused on helping your ISG customers succeed.

The service will cost first-class passengers not a thing, but coach will pay €6.50 (US$10) per hour or €13 (US$20) for an entire trip. The train operator is initially equipping 7 trains, but will complete work on all 26 trains by October. Trip durations run from 1 hour 20 minutes to 3 hours.

Most impressively, the consortium that built the system is using a pretty modest antenna that moves automatically to stay in contact with the satellite. It's 80 by 72 cm (31.5 by 28.3 inches), and plans are to shrink that to something 2/3rds the height when a new dish is certified. Ultimately, IDG News Service reports, the group plans to use 3 cm (1 in) high phased-array antennas that would cover the train's roof. Very, very clever, as it jettisons any moving parts.

Three companies worked on the technology: Telenet, handling the billing and authentication, is a Belgian ISP that also runs hotspots; Nokia Siemens is a well-known systems integrator, and is providing some gear and handling installation and integration; 21Net, perhaps the least-well known partner, has the satellite technology.

This project dates back to at least 25-April-2005, a point at which 21Net and Nokia Siemens announced a successful test on the Thalys run from Brussels to Paris.