Microsoft and CobWeb Point out New Ways to Profitability for Web Hosts

May 24, 2005
May 24, 2005 - (HOSTSEARCH.COM) - Microsoft today released research conducted in association with web hosting provider, Cobweb Solutions which provides a good answer to the question of where web hosts should look for new revenue streams with the price of web hosting falling dramatically in the last month alone. To stay afloat in an ocean of free and ultra-low cost web hosting, providers should look to providing new services like enterprise-level shared calendaring, contacts, document collaboration, instant messaging and mobile-enabled services. In other words, the research conducted by Microsoft and Cobweb revealed that small businesses are looking for better communications tools in order to operate more like larger enterprises.

82% of those surveyed said they would pay $9 per month, per user, or more, for enterprise-level shared calendaring, contacts, document collaboration, instant messaging and mobile-enabled services. The survey interviewed over 5,000 small businesses, more than 82% of which have fewer than 15 employees. Most hosting plans for small business are around $9 per month so to nail (er, generously offer) these same companies for $9 per employee/user would almost certainly boost a web hosts profits many times over.

"The initial investment and limited access to IT expertise required to realise the benefit of IT leaves many small businesses managing with what they have, and not in a position to choose and implement the right IT to help their businesses grow. BT has invested in a world leading hosting platform to provide managed IT applications and services for small businesses without the need for upfront payments and reliance on skilled IT professionals in-house. Small businesses can now realise the productivity benefits previously only available to the larger enterprise," said Clive Quantrill, general manager of business value added services, BT.

"Smaller businesses face the same challenges as larger enterprises such as managing the requirements of government legislation, IT security and flexible working requirements, so they need to be on a technological par to survive. As small businesses evolve and their needs become more complex they will have to invest in technology that allows them to remain competitive with larger enterprises -- which now includes outsourcing their non-core functions," said Mark Adams, managing director, Cobweb Solutions.

Bellwether is a small UK-based engineering consultancy that has recently won a DTI e-commerce award for tele-working and has seen the benefits of using hosted communications services to support remote working and collaboration across geographically diverse locations. "As a result, our productivity has increased significantly and it has also helped keep our costs down, making the business more efficient and increasing the value we can deliver to our clients," added Graeme Lloyd-Roberts, technical director, Bellwether Enterprises Ltd.

The research also reveals that small businesses specialising in professional services such as law and consulting, finance and healthcare, are most likely to be early adopters of broadband-delivered business communication services. Of those small businesses with a need for enterprise-class messaging and collaboration services, the majority cited keeping their systems safe against spam, ensuring anytime anywhere access to email and having to recover lost data in the case of catastrophic event as the major risks of managing IT systems in-house. The research identified the following key drivers for the adoption of professional communication services over basic web mail:
• Superior spam filtering (84%)
• Access to email from anywhere (78%)
• Reduced downtime (58%)
• Offsite backup of messaging and collaboration data (57%)
• Access to email expertise (54%)
• Virus protection (54%)

"The business playing field is tipping in favour of the small business," explained John Coulthard, director of small business, Microsoft Limited. "Small businesses are increasingly more agile and can respond quickly to the demands of customers and market. By using IT effectively and taking advantage of hosted solutions to reduce the burden of IT management, small businesses free themselves up to focus on driving growth."

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