SOURCE: ScienceLogic, Inc.

ScienceLogic, Inc.

November 13, 2013 08:00 ET

Price Wars and Commoditization Continue to Threaten Hosting Providers' Bottom Lines

Survey Reveals Hosting Industry Will Invest in Monitoring and Provisioning Solutions to Support New, Differentiated Customer Offerings

RESTON, VA--(Marketwired - Nov 13, 2013) - According to a survey of HostingCon 2013 attendees, "price wars" continue to threaten the hosting industry, with 41 percent of respondents citing competitive cost cutting as their biggest potential profit-drain. Fear of IT commoditization was also identified by 26 percent of attendees as a key threat to their bottom line, which is a new concern identified among hosting providers when compared to a similar survey in 2012.

To combat these industry challenges, 24 percent of respondents plan to focus on support services in order to gain a competitive advantage. Furthermore, the study revealed that 15 percent of hosting providers are placing a greater focus on reputation to differentiate, while 28 percent are investing in monitoring tools and provisioning systems combined. This shift reflects hosting providers' desires to introduce new high-value services to market.

"Hosting providers that do not invest in value-added services and monitoring systems to differentiate risk losing their competitive advantage," said Antonio Piriano, CTO, ScienceLogic. "Competing on price alone just isn't a viable option for most hosting providers as they can't possibly compete in this way with behemoths like Amazon, Rackspace, and Google. Instead, hosting providers must learn to appreciate the large cloud providers as necessary enablers and learn to manage a crossbred environment while adding value to the underlying infrastructure resource offering."

Additional key findings from the survey:

  • Twenty-seven percent of respondents cited they are investing in new customer offerings
  • Hosting providers rate Rackspace and Google among their biggest competitors by 26 and 17 percent, respectively
  • While cloud giants are viewed with concern by hosting providers, the survey reveals their threat value has reduced to 26 percent, which is down from 39 percent in 2012

For the full survey report please visit: www.sciencelogic.com/hosting-report

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About ScienceLogic
ScienceLogic delivers the next generation IT monitoring platform for the network of everything. Over 15,000 global Service Providers, enterprises, and government organizations rely on ScienceLogic every day to significantly enhance their IT operations. With over 1,000 dynamic management Apps included in the platform, our customers are able to intelligently maximize efficiency, optimize operations, and ensure business continuity. We deliver the scale, security, automation, and resiliency necessary to simplify the ever-expanding task of managing resources, services, and applications that are in constant motion.

ScienceLogic won InfoWorld's 2013 Technology of the Year award, Red Herring's Global 100 Award, Deloitte's Technology Fast 500™, and MSPmentor 250, among other worldwide recognitions of excellence. For more information, visit www.sciencelogic.com.

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