As the Internet matures, Web site hosting is set to become an important global industry. There are debates circulating as to whether some nations will be a centre for area hosting, or if it will become localised. ZDNet has found that some big players in the industry feel Australia is set to become the host for data centres that serve the Asia Pacific area, but other analysis point to hosting becoming localised.
Hosting centres are important and a fast growing area of the business, according to Michael Aymar, Intel's president of Online Services said, - The Internet is driving the industry, not the PC."
Intel, and its Intel Online Services division is one of the key players, and feels that hosting could potentially be based in one or two countries and serve an entire region. The corporation believes Australia could be in position to be the home of Asia Pacific's data centres. They currently offer co-location hosting from their Sydney centre, and fully managed services for Australian customers in America. Fully-managed is the agenda for the company in the long run, according to Aymar, as it believes an increasing number of companies will want to outsource its web activities. -Intel's focus is on Dedicated Management at present," Aymar said. E-commerce and Application Service Providers (ASPs) are the drivers behind this growth in the hosting market.
With a number of important data centres already based in Australia, the country is well placed to lead the market in this region, -It's a very important market opportunity," Aymar said. Intel predicts hosting could be worth AU$30 billion by 2004. But the road is not a straight one. As corporations such as Intel place their hosting centres where the traffic is - currently its coming from Australia - they must still battle outside pressures. -Bandwidth is holding it back. Telstra has been criticised a lot and this is an issue...Australia has a good infrastructure, but it is not cost effective for the end user," said John Brand, Senior Research Analyst, Electronic Business Strategy for Metagroup. Although Internet usage in Australia is strong and growing, there are still no sure signs about the amount of traffic coming in from the region, and how sustainable this will be. -You put it [data centres] in the geography that has the traffic, you need a market demand that can support it," Aymar said. Already Intel has struck a deal with Beijing Telecom and their new joint data centre opens soon. With predictions of a massive growth in Internet usage coming from China, Australia could lose out, especially on costs. -The cost of access is 30 times cheaper on the west coast of America," Aymar said.
Bundled into this argument is that old thorn in Telstra's side -broadband. There is a host of services, which if were made available on broadband could really boost the hosting industry. -Hosting is largely driven by bandwidth availability, especially when you look outside the current uses [of the Internet], and look at application hosting and media hosting. These are currently small markets, but they will increase and so will the infrastructure have to," Brand said. Media hosting is a very large egg just waiting to happen, already Asia is being served by one broadband Internet television channel, currently produced and hosted in the UK.
Sounding a warning signal is IBM's Pete Hreszczuk. -Growth in the Australian market is good, but we are also see a lot elsewhere," he said. IBM said it sees a lot of investment in infrastructure and points out that its partner, WebCentral sees itself as an Asian Pacific service provider.
There is no certainty that there will be one nation that dominates the hosting arena for its area, some say hosting will become increasingly localised. -Our research hasn't really indicated that there is a market for it [an area based hosting centre] and this is for two reasons. Firstly performance, the idea of hosting is to be close to the customer... the idea of one country being a host does not fit into this. Secondly it's a commodity market and there is little value in it. People outsource as they don't want the hassle of hosting, but they don't want to pay for it either." Brand said.
-There is no clear winner as to who the area hub will be. It is not even clear whether there will even be a hub," Aymar said.
Clear monitoring of Internet traffic in this region will be the indicator, but there is already a clear winner - no matter what direction the hosting industry takes - the big corporations. -When Internet connection abilities becomes completely ubiquitous, then the centres should move, that is the nature of global economics," Aymar, the America corporate man said of the ability to place data centres in the cheapest areas. Brand's research has already shown signs that the industry will consolidate in the near future. Intel says its PC Processor brand image is winning them business, -It gives us an opening to business discussions, and the name means a lot in terms of technology and security to a lot of companies," Aymar said.
If Australia wants to lead the hosting advance, subsidies over the next three to five years are the answer, according to Brand.
