Stephenmccarron.com

I wrote a post way back in March 2008, on the health and evolution of the Irish market for domain registration and shared web hosting.

So, 18 months later, what’s new, changed or have any of my predictions born fulfillment?

The landscape did change quite dramatically in May 2008, when Hosting365 sold the domain registration and shared hosting business in it’s entirety to Namesco, one of the largest hosts in the world and a leading provider in the UK (and part of a group including other providers).

In this regard, my prediction of consolidation bears some fruit, albeit self-fulfilled somewhat! Recent figures have shown that 71% of the Irish market is in the hands of the ‘tier 2′ hosters (the specialist hosting providers). This tier consists of 39 players, with the bulk of the 71% (some 55%+) held by the top four providers. From a pricing and commoditisation point of view, the leaders have been battling on price for the last year, each offering better pricing on plans, more resources, cheaper domains than the other

The transition has led to the new Register365 still leading the Irish market with almost 20%, still quite some distance ahead of the competition, and growing strongly with, I am sure, exciting things planned and up their sleeves. Register365 now offer plans with 10GB space from €1 per month (for the first month, then €4.95 per month), running on a new highly available ‘cloud’ infrastructure. If that’s too much, you can avail of plans with 5GB of space from just €1 in month 1, then €2.95 monthly. With 7 days phone support, Register365 is still the choice for most of Ireland’s Small to Medium business customers and they are growing at nearly 2k domains per month.

Market no. 2, Blacknight with nearly 15%, offer 10GB space for €4.95 as their entry level, and since my last post, have reduced their prices on domains, including .ie domains in particular. They’ve also achieved ICANN accreditation (the second provider to do so, after hosting365 in Ireland) and are pushing heavily in the area of domain registration and are growing at a similar rate to Register365.

Third place is still Digiweb at 12%, who also acquired Novara in the last two years, and is the only Telecommunications / Broadband provider still in the race with regards to hosting. Most of the other such providers are ‘actively’ losing domains month on month. Digiweb offer plans from €9.99 monthly (less if you are willing to pay in advance for a year) and provides services (including broadband and telephony) including website design, managed hosting, IT services ad more. Digiweb also remain the only other host on the list with their own Datacentre and they are growing at 500+ domains per month.

Letshost, not mentioned in my last post, have been competing highly aggressively on domain price (and price in general) with the cheapest .ie domains available online, and hosting with 12GB space for €7.90 per month (less if you are willing to pay in advance for a year) and have almost 10% of the market to their credit and are in position 4, growing by several hundred domains every month.

- Market position data is based on the excellent work of John McCormack at http://www.hosterstats.com/ taking into account that the Register365 figure includes an accumulation of legacy and new DNS servers, as does Blacknight, Digiweb/Novara and Letshost. Despite some ‘claims’ otherwise lately in the blogosphere, the market ranking has not changed as can easily be independently verified using John’s excellent, freely available data.

- Cathal Garvey has done some excellent work tracking the domain-only price for .ie domains here: http://cgarvey.ie/blog/ie-price-comparison/

So, in short, the relentless commoditisation and margin crushing of the domain and shared hosting space continues apace, the consolidation of the market has taken a few major, and a few stuttering steps, but will develop pace over the next 18-24 months as many of the smaller providers see margins leaving the space and growth rates slowing to small single digits per year (if at all). Much of the market outside the ‘big 4′ is in the hands of website designers, developers, etc, who traditionally bundled hosted (many of whom are resellers of the big 4 also) and might be happy to ‘release’ themselves from the stress and inconvenience of managing a small-scale hosting service.

External to the hosting market, the SAAS / Cloud drive is equally relentless. Services like mobile me from apple, pix.ie, gmail and inumerable others, allow you to simply and easily avail of the ’service’ of hosting, without any of the technical know-how and, in most cases, without any cost. For those who want to put up a simple website, host some files, but photos online, have an email address (even at their own domain), services are available and improving all the time that will fulfill those needs without much time or money required. To my mind, this is the real threat to the shared hosting industry – it’s complete replacement by the ’software as a service’ or ‘cloud’ industry. ‘Vanilla’ hosting (where you need to know what you are doing and understand ‘technical’ stuff) will be the realm of designers, developers, hobbyists and enthusiasts (read geeks ) with consumers and small businesses simply availing of the ‘end result’ through SAAS.

I think my conclusions/predictions from 18 months ago still stand, and look forward to keeping an eye on the business as it evolves and changes…

In Summary

* Big hosts will get bigger (as evidenced by the current market share breakdown and growth rates)

* Smaller and undifferentiated hosts will be swallowed by the Big hosts (in progress)

* The market will continue offering more and more (space as well as features and functionality) for about the same price (evident also)

* The specialised SAAS providers (Salesforce, Sugar, Zimbra, Basecamp, etc, etc, etc) will continue growing and start also consolidating. (Clearly evident, cloud is everywhere one looks these days!)

* Few providers will own their own data centres. (not as relevant these days, but still a factor in determining a providers resources and scale)

Article appears here, writted by Peter Cluskey

STEPHEN McCARRON has seen the future of the internet, and it’s cloud computing. This will allow web-based services, no matter how complex, to be downloaded on demand and used just like any other utility, such as gas, electricity or water.

Armed with that certainty, McCarron’s company, Hosting365, has spent more than €3 million on cloud infrastructure in the past two years and leads the market in Ireland – allowing its customers to pay for IT services as and when they use them.

“It’s extraordinary to think that this technology didn’t even exist two years ago,” says McCarron (32), who started his career as a primary-school teacher and who has built Hosting365 into a business with an €8 million turnover since he set it up in 2001.

“The planet is heading [for the] cloud, heading for this model of utility delivery. And since that became evident, we’ve had our six-person R&D team working full time on the development of our cloud-computing platform.

“We spend somewhere between €700,000 and €1 million on R&D every year and I have absolutely no doubt that the day we reduce that emphasis on research, development and innovation is the day we’ll lose our competitive edge.”

McCarron is no stranger to change, although he admits it can take its toll. His first business was IWD Ltd, a modest web-design and hosting company which generated €50,000 in its first year, 1999.

Hosting365 was more scalable, however. By 2004, after just three years, it was the largest hosting provider in Ireland. By 2006, it had a new 25,000sq ft data centre in Park West and a turnover of more than €5 million.

Despite that success, the emphasis switched again at the start of 2008, this time away from individual customers and small and medium-sized enterprises (SMEs) towards larger corporate clients that generated more income.

“The business had developed a bit of a split personality,” says McCarron. “We’d started out selling domain names and e-mail addresses and hosting websites. But as we grew, we found we were moving naturally towards providing outsourced internet infrastructure, or building out infrastructure, for larger corporate clients.

“We found ourselves in the position where two-thirds of our revenue was coming from those large corporates and their business was growing at nearly 40 per cent a year, whereas 99 per cent of our customers were at the individual consumer and SME end, generating just one-third of revenue, consuming all our resources and growing at less than 5 per cent a year. Strategically, that couldn’t continue.”

Today, Hosting365 hosts the online booking systems of three airlines and the Hilton Hotel Group, as well as online banking systems and e-commerce stores, to give but a small flavour of its activities. Customers range from O2 and Bord Gáis to Tesco Mobile and TV3. “Whereas a lot of the big corporates have their own data-centre infrastructure and run their own networks, they see the internet as a different thing that they don’t necessarily want to bring into their local data centre. So they let that sit with a provider like us,” says McCarron.

STEPHEN McCARRON has seen the future of the internet, and it’s cloud computing. This will allow web-based services, no matter how complex, to be downloaded on demand and used just like any other utility, such as gas, electricity or water.

Now, as a “cloud infrastructure provider”, that offering is even more attractive, he adds.

“The way infrastructure used to work, you always had to build for peak capacity, for the maximum level of redundancy and scalability, and that applied to everything from firewalls to servers. And there was a reaction time to get the kit in and wire it up,” says McCarron.

“Cloud computing allows customers to deploy the online resources they need at this moment and not to worry too much about the infrastructure. They can start with one machine, one CPU or one gigabyte of RAM.

“Then, if a customer is running a big internet-based promotion, for instance, they can scale that to hundreds of machines or 10s of gigs of RAM on one machine, without anything bespoke needing to be put in place. They pay for the peak, but then revert to normal rates. In business terms, that’s the way of the future.”

On The Record

Name: Stephen McCarron

Company: Hosting365

www.hosting365.com

Job: Managing director

Age: 32

Background: Began his career as a primary teacher after graduating with a BEd from TCD.

Seconded to the National Centre for Technology in Education, followed by the Department of Education.

Set up a web-hosting and design business in 1999, which was followed by Hosting365 in 2001. It became the largest hosting provider in Ireland by 2004.

In May 2008, McCarron sold Registrar365, its shared hosting and domain registration division, to Namesco, one of the top 50 hosting providers in the world.

Now concentrating on hosted managed services for the enterprise market. Ranked 25 last year in Deloitte Fast 50 list.

Challenges: “As a small company, our greatest challenge is to do RD, especially when our technological competitors are people like Oracle and Amazon or, for instance, Rackspace, who had a billion-dollar turnover last year.

“If we fall back on R&D, we lose our competitive edge. We become an also-ran.”

Inspired by: Fellow TCD graduate Dr Chris Horn, founder of Iona Technologies. “I’ve always been impressed with his intelligence and his candour about the business. He always saw the world as his marketplace, rather than following the traditional route, starting in Ireland, moving to the UK, and so on.”

Most important thing learned so far: “Don’t be afraid to change, even if that change is fundamental to the business.”

26.03.2009

A new State computer server strategy could reduce CO2 emissions by 18,000 tonnes.

As the emergency budget looms, and, with the Irish Government looking to cut spending, there is an opportunity for the State to save between €20m and €30m, as well as reduce carbon emissions by 18,000 tonnes, if it commits to an overhaul of its IT systems.

Right now, the average server in any business or State department operates at around 10pc capacity, and many organisations keep several servers, each for specific functions such as email, web hosting, accounts, sales and human resources.

A new revolution is sweeping the computing world under the term ‘virtualisation’, which allows firms to own fewer servers, spread the load and create ‘virtual’ machines to handle a sudden spike in demand. So, instead of seven machines running at 10pc capacity each, organisations can have two servers running at 50–60pc capacity.

The impact of this means that organisations require fewer servers, reducing maintenance and electricity costs significantly as well as the environmental impact.

Globally, computer emissions are estimated to account for 2pc of CO2 emissions, equivalent to the impact of the airline industry.

A further revolution in ‘cloud computing’, whereby IT infrastructure can be accessed remotely over the internet to internet data centres rather than in-house, could pave the way for further cost savings.

A parliamentary question tabled by Fine Gael’s spokesperson for Small Business and Labour Affairs, Damien English TD, last month to every minister revealed that there are an estimated 4,608 servers across Irish State departments, including 52 in the Department of the Taoiseach, 154 in the Department of Enterprise, Trade and Employment, 1,288 within the HSE, 376 in the Department of Agriculture and 510 in the Department of Justice.

A subsequent question about whether any of these departments intend to deploy virtualisation to reduce the number of servers, found only one department — the Department of Communications, Energy and Natural Resources under Minister Eamon Ryan TD — had plans to move to virtualisation.

Data centre expert Stephen McCarron of Dublin-based Hosting365 has looked at the number of servers currently being run by the Irish Government, and he estimates the Government could save the Exchequer at least €23m per annum.

“The running costs of these servers would be €23m a year just in maintenance; this ignores the cost of buying the machines and housing them securely.

“If you are running 4,600 servers, the electricity bill alone to keep them switched on and cooled would be €7m per annum. So, the Government is paying €500,000 a month to run these servers.”

The environmental impact of this, McCarron reckons, could be enormous.

“This would be the equivalent of a small town’s worth of CO2 emissions. There would be 18,000 tonnes of carbon dumped every year by the Government’s own IT infrastructure. If the Government moved to cloud computing, the output of carbon could be reduced to 200 tonnes per annum, he says.

English says the environmental and budgetary aspects of the current swathes of Government servers need to be addressed.

“These things are like smelters, they use that much energy. The people I’ve been talking to estimate a minimum of €20m in savings, this could rise to €60m. That would be by rearranging servers and getting better use out of them.

“This wouldn’t cost any jobs, it would not entail any reduction in front-line services and, in fact, would free people up to provide citizens and businesses with better services.”

English says that Colm McCarthy, who heads up An Bord Snip Nua, in his previous role at the Office of the Comptroller and Auditor General brought attention to the vast number of servers used within Government departments.

“This should be looked at in a strategic way. Minister Eamon Ryan TD was the only minister who indicated his department may move to a virtualised environment. A Government plan is needed because this is one area that would deliver an immediate return for the economy,” English says.

Fredrik Sjostedt, director of EMEA product marketing at VMware, says a move to virtualisation would require literally little more than a software upgrade and would safeguard existing IT investments.

“It is important to maintain and keep the investment you’ve already made. The difference is you use what you have more effectively. If these machines were operating at 10pc of capacity, then you don’t need to buy new servers for some time if the devices are modern,” Sjostedt explains.

Microsoft Ireland’s server group manger, Bill O’Brien, says the savings of €20m in running costs and 18,000 tonnes of emissions would be conservative.

“Without looking at the exact calculations, broadly speaking there are huge savings to be made.

“We’re only at the start of the virtualisation journey. Servers are a good place to start and, in fairness, many departments have started. There’s a lot more to do, but it’s great area to save time, energy and space,” O’Brien concludes.

By John Kennedy

Pictured: Stephen McCarron, Hosting365, and Damien English TD, Fine Gael spokesperson for Small Business and Labour Affairs

Link to the full article:  0207_001.jpg

Hosting365 have re-launched an off site detailed status site, complete with real-time status visibility on all Hosting365 core network nodes, datacentres, services like DNS and control panel sites and the Cloud Platforms. Additionally, a range of network tools, including speed tests, traceroute, voip, IPTV and video streaming tests are available.

Monitoring of all services is provided by independent third-party service – Pingdom.com

We recommend customers bookmark the site, as it will also be used to provide notifications of maintenance and issues.

Visit the site at http://www.hosting365status.com/

 Newstalk Interview

Click the link above to download an interview I gave on live radio for Ireland’s nationwide talk radio – Newstalk. The programme was ‘Down to Business’ with Mark Mortell.

Topics include the start-up of hosting365, our recent investments in the cloud, and some personal background !

Just a little something R&D put together ‘unoficially’ for internal use, but I thought I’d put it up here for customers / friends who are discerning enough to enjoy both Hosting365 and Mac

Will work fine on a PC, as long as you don’t mind the big apple logo

Hosting365 Mac Skin – Click this link to download the file – it’s a 6MB .png

It’s been ‘in the wild’ for a few weeks now, and the new website is almost complete, so here is a preview of the new logo and branding for Hosting365….

As you can see, the orange logo is a stylised H but also represents the changing from one ‘lane’ to another – ie: changing from thinking internally and buying kit, to oursourcing to using infrastructure as a service.

Our tagline is now ‘Change the way you think about IT’ – again, reinforcing the idea that, particularly with our cloud platform, company’s need no longer worry about the physical kit, architecture or things like security, backups and hardware resilience…

New Hosting 365 Logo & Tag line

The work, as well as some other items, was completed by Irish agency – www.atomic.ie 

The clever chaps over at Contrast – Eoghan and Paul – have excelled themselves yet again with the super smart and useful Qwitter web application – http://www.useqwitter.com/

If you’re a fan or user of the popular micro-blogging service – Twitter – you’ll know that sometimes your followers will depart, without so much as a ‘goodbye’ or ‘by your leave’!

Now, the solution is here! With Qwitter, you can pop your twitter name into the form, and an email for notifications and now, when a follower leaves, you’ll get a little alert to their departure -and- even better, you’ll get reminded of the last thing you said before they left! The perfect answer to that age-old question – ‘was it something I said?’

And better still, Qwitter is supported by and hosting on the Hosting365 Cloud Platform, giving it ample oomph and exceptional scalability to help cope with the deluge of traffic that has come, particularly after mentions on TechCrunch, TechMeme, Venturebeat, Delicious and sites, forums and blogs all over the web, as well as on Twitter itself!

At last nights awards ceremony, we found out that Hosting365 had, for the second year running, been ranked in the Deloitte Fast 50 – a ranking of the 50 fastest growing technology companies in Ireland !

We ranked in 25th place overall this year (Click here for the full list of winners in 2008)

Last year, we ranked in 7th place (Click here for the list from 2007) as the 5 year trend took in our first years trading, where we did a mere 250k euro turnover

Based on our performance in 2009, I would expect us to also be in the rankings next year.

While it can be ‘easy’ to feature in the rankings once, to sustain ‘Top 50′ levels of growth for two years running (and hopefully three) requires expansion in excess of 500% ! If nothing else, I hope this gives an insight into the growing pains Hosting365 has had to endure and cope with over the last 7 years!

Our stability and prospects on the back of that growth are a testament to the passion, commitment and engagement of a truley amazing team of people who work with me, both in Dublin and Krakow !

More details on the scheme:

About the Deloitte Technology Fast 50 Programme

To enter the Fast 50 Awards, companies must meet the criteria listed below. Entries must be
sent in electronically, with the necessary supporting documents (audited financial
statements).

Entry Criteria:
 Have been in business for a minimum of five years
 Considered a technology company, which is defined as producing technology,
manufacturing technology-related products, be technology intensive, or use unique
technology to solve problems, devoting a high percentage of effort to technology
R&D
 The parent company must be Irish-owned and have its headquarters in Ireland
(subsidiaries of multinational organisations do not qualify)
 Operating revenues must be at least €50,000 for 2003

From the Deloitte Commentary on the Budget yesterday:

Carbon Levy
The Minister confirmed that the Commission for Taxation has been asked to examine how the introduction of a carbon levy might best be structured and implemented to ensure that Ireland’s economic prospects are protected and the vulnerable in society do not lose out.  A firm measure is expected in next year’s budget.

The fact that the Minister is examining the matter in detail and awaiting a more rounded picture of the impact of the introduction of such a levy is commendable and it would be hoped that he would take on board the views of the Commission and other industry bodies before making a final decision next year.

Energy Efficient Equipment
Finance Act 2008 introduced 100% accelerated capital allowances for companies who purchased specific energy efficient equipment.  These included Building Energy Management Systems, Lighting and Lighting controls, and Motors and Variable Speed Drives. Budget 2009 extended the accelerated capital allowance regime to include four new categories.  These new categories are:

• Data server related systems and large energy saving office equipment associated with Information and Communications Technology
• Efficient heating/electricity provision equipment and control systems
• Efficient electrical and control equipment associated with process and heating ventilation and air-conditioning systems
• Alternative fuel vehicles

Any relief for business which commits to the Green Agenda is to be welcomed, particularly in current times when fuel and utility costs are at historically high levels and driving hidden inflation and additional cash outlay for business.

Source: http://www.deloittebudget.ie/

Of particular interest to me is that ‘Data Server related systems’ are now covered under this new measure, allowing for 100% capital allowance right off. For us, it means we could potentially right off our blade/san/virtualisation investments over 1 year, as opposed to the typical 3. It will be interesting to see how this, and the ’spectre’ of the expected Carbon levy next year influence IT spend in the coming months.

Our Cloud Platform already has impeccable green credentials, consuming a tiny fraction of the power of traditional servers and needing even less cooling.

I predict a gradual but accelerating move to virtualisation and cloud technologies, both onsite and outsourced, with more and more companys outsourcing entire IT functions as the costs of refit, refresh and staffing are compounded by carbon levys and penalties on inefficiencies.