That is good news for Microsoft, which sees the Web hosting environment as a potential big growth area, particularly with regard to higher value services.
"We are looking at how we can enable these higher value services down the road. More than 90 percent of our revenue is driven by partners, so helping them deliver innovation to their customers helps us," Bill Hilf, Microsofts general manager for platform strategy, said in a session at IT Forum here Nov. 15.
"I refer to this as shared success: If our partners are successful, we are successful and the market opportunity grows for everyone," he said.
Those sentiments were shared by Frederick Schouboe, a director of Surftown, a hosting company based in Copenhagen that is active in six markets, has two data centers and more than 150,000 customers, and serves more than 2 million e-mails daily.
Microsoft has come a long way, especially with its focus on security, management and delivering automation, making its solutions attractive to hosting companies, he said.
"We started with a classical Web hosting architecture that had a third-party control panel and a Linux-based solution platform bundled with open-source applications. But our development environment was mixed, and that resulted in it taking us longer and longer to deliver services to customers. So we had to act to change this," he said.
The company realized it needed to keep its customers and reduce churn, saw that the classic "bandwidth" Web hosting model being replaced by value demands, and was facing heavy and increasing price competition.
In addition, customers wanted complex solutions that were made "easy." Surftown also realized that it needed to better focus on automation and cost savings, particularly with regard to its development costs, which were spiraling out of control, Schouboe said.
"We also wanted better interoperability … we wanted to switch from Red Hat Linux to Debian Linux, as our staff felt it had better security. But changing from one Linux solution to another was costly and had no tangible value for customers," he said.
The company decided to move its development platform to .Net and the Microsoft Provisioning System rather than Java; the operational platform was moved to Windows subscription and automatic deployment services along with IBM deployment services.
"This resulted in a faster development time, allowing solutions and functionality to be delivered 60 percent faster, resulting in higher operational efficiency," Schouboe said. "Server installations now take just 30 minutes versus 6 hours before, and we have better documentation and transparency. Microsoft applications also have a higher value proposition for us."
Roger Hofstetter, CEO of Genotec Internet Consulting, which is based in Switzerland, started with a mixed Windows and Unix environment, with various operating system platforms, including Debian and Windows 2000, and a variety of management solutions.
After undertaking a comprehensive review of its infrastructure, the company realized it had to change its environment to allow more automation, reduce costs and help grow the diversity of its products.
"So we moved to running the same version of FreeBSD on all systems, along with Windows 2003 Web Edition on all our Web systems, while the name servers and mail cluster were still running on Unix," he said.
Since that transition, the company has found Windows 2003 to be a more stable platform than its open-source one, with better uptimes than Unix.
"Upgrading to Windows 2003 also helped us diversify and helped us quickly expand the line up of products we offer customers," Hofstetter said.