Segmentation and Differentiation In The Cloud & Hosting Market

The cloud & hosting provider landscape is extremely diverse. In this blog post we aim to provide some clarity into the different products and services that cloud and hosting providers deliver. Also, we take a quick look at how providers differentiate their offerings.

From a product and services perspective we make a distinction between web, infrastructure and application hosting. A typical web hoster (for example Flexwebhosting) provides web hosting, domain names, virtual private servers and email addresses. A typical infrastructure hoster (for example Cyso) provides virtual compute capacity in the form of private, public or hybrid cloud and dedicated hardware such as servers or storage. A typical application hoster (for example Parentix) provides technical and/or functional management of applications such as SAP, Microsoft and Oracle. In addition to web, infra and application hosting, generic management, support, SLAs and other services are offered on top. Larger providers often offer a combination of web, infrastructure and application hosting.

Rather than offering generic web, infrastructure or application hosting products and services, many cloud and hosting providers are specialists and focus on just a couple of capabilities and markets. Rackspace, for instance, promises fanatical support. Schuberg Philis specializes in mission critical applications. AWS delivers self-service and auto scaling. Web hosting provider Antagonist provides hassle free quality web hosting for a competitive price. IT services provider Vancis specializes in infrastructure and application hosting in health care, education and research markets. Uniserver provides cloud infrastructure for IT partners.

The figure below provides a snaphot of possible cloud & hosting provider product, service, specialisation and market combinations. For instance, a provider can differentiate by offering high performance web hosting for system administrators in digital agencies that work for medium sized companies in the retail market.

We believe cloud and hosting providers should make a clear choice for the future: get big, get vertical or get specialised. Providers with a growth focus should have an active merger & acquisition strategy. Vertical and specialised providers should have a laser focus on their respective markets and specialisation, carving out a niche that sets them apart from other providers. Generic providers that focus on none of the above will find it increasingly difficult to differentiate and maintain healthy margins.

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