Hosting Vendors Tap Smaller Allies

Hosting vendors aren't just counting on the big guys as they round up partners.

Hosting vendors arent just counting on the big guys as they round up partners. Some companies are courting traditional resellers and small Web design shops, as well.

Take Epoch Internet. This hosting company recently started targeting resellers through a relationship with Avnet Computer Marketings Hall-Mark division. The objective is straightforward: Recruit resellers to sell Epochs offerings to small and midsize businesses the company otherwise would have trouble reaching.

"We are not going to do it through a direct sales force," says John Thomas, director of business development at Epoch. He says resellers have the customer relationships Epoch needs to tap the "tremendous growth in the midmarket area."

The Avnet/Epoch deal makes hosting services available via two-tier distribution. Resellers purchase the services, which appear as SKUs on the Avnet price list. Those successful in selling the services get a onetime service activation fee and a monthly revenue stream for the term of the contract. To ease the paperwork burden, Avnet also offers to handle end-customer billing for resellers.

"We view it as an opportunity to expand what they offer," says Rick Hamada, president of Avnets Hall-Mark division. "Not many [resellers] have the wherewithal to try to set up their own data centers."

Allegiance Telecoms Virtualis hosting unit, meanwhile, has recruited 50,000 affiliates, many of which are small Web design shops. Small as they may be, the affiliates collectively deliver a sizable chunk of business to Virtualis, according to company executives.

Small may well be beautiful for the hosting vendors. "Smaller Web designers still have a robust business," says Tucia Lyman, who runs Virtualis affiliate program. With larger Web integrators in disarray, resellers have "a great opportunity to step in and begin to capture that market opportunity," adds Epochs Thomas.