Will Savvis' New Program Extend the Value of Hosting Services?

Oct. 2.08 | About: SAVVIS, Inc. (SVVS)

I had the privilege of being a columnist for the Web Hosting Industry Review [WHIR] for nearly three years from its inception in 2004 to mid-2007. (Click here to read these columns.) During that time, only a handful of hosting companies saw the potential of the rapidly evolving Software-as-a-Service [SaaS].

The majority of those hosting companies who saw the SaaS market opportunity primarily focused on pushing their managed services and co-location capabilities. OpSource was the first to recognize a broader set of business opportunities and became a thought-leader in the industry offering a wider array of services, augmented by set of third-party technologies.

Other hosting companies may have been generating greater revenues from independent software vendors [ISVs], but they didn't pursue the broader array of business opportunities associated with SaaS. As a result, OpSource won the lion's share of industry attention and 'mindshare.'

Now that the SaaS and wider 'cloud computing' movement is accelerating, a growing number of hosting companies are focusing their attention on this market. Their escalating efforts to prove that they are viable suppliers of SaaS enablement services are not only being driven by the exponential growth of the SaaS/cloud computing market. It is also being driven by the emergence of various 'platform' vendors who are promising a similar set of hosting and service infrastructure capabilities.

SAVVIS (NASDAQ:SVVS) unveiled a new SaaS enablement program on Monday, and it came with a new twist. In addition to offering a set of Core Infrastructure Services and full range of Lifecycle Services, SAVVIS is seeking to differentiate itself in an increasingly commoditized hosting industry with a new "Marketplace" which promises to give ISVs access to its larger population of enterprise and ISV customers. In essence, SAVVIS is offering to be a channel to market for its SaaS ISV customers in addition to being their enablement partner.

The marketplace idea can also benefit SAVVIS' enterprise customers who can gain access to an assortment of SaaS solutions, which can help them, address specific business requirements and achieve their corporate objectives.

I've been suggesting this idea to a number of hosting companies over the past year, and will be interested in seeing how well SAVVIS is able to deliver this new level of value to its customers.

Disclosure: None