Introduction

• Many different types of ‘hosting’

• Virtual server and traditional websites/email– Smaller companies or organizations that do not need a

large web presence.

• Collocation servers and application hosting– Larger organizations

• Managed server hosting– Middle ground

Research Question

• What are the strategies for generating revenue from a hosted networked environment?

Concept

• Provide mid-sized company with:– Rack space– Bandwidth– Technical support– Server management– Insurance– Relationship with datacenter

Market Analysis

• Market Segmentation:

• Geographic Location– Located within King, Pierce, Snohomish, Skagit

and Whatcom counties• Close proximity to property• This may not be the case (unknown variable)

• Company Size– Small and medium sized businesses– Contain between 10 - 100 employees

Market - Geographic Location

• Number of business entities by County - 2004

Market - King County & Revenue

Target Market Strategy

• Businesses not currently using managed servers

• Small companies that want to upgrade

• Companies that currently house their own servers

• Temporary hosting environments

Competition

• There are many ‘hosting’ companies.• There are no competitors that offer to

managed the clients’ computer• Only a handful of companies offer

platform independent server hosting. – They own the server - not the customer

• Competitors (In Seattle - include):– Adhost (owns their own datacenter)– Internap (based in Atlanta)

Total Business Process

• How to get the product to the customer?

• Pre-production– Research Vendors

• Datacenters with available space• Startup time for new account

– Establish relationships• Proof of insurance

– Develop product• Platform Support• HR requirements

Total Business Process

• Pre-Production (Continued)– Develop price structure– Develop contract structure

• Production– Sales & Marketing– Customer setup

• Find rack space• Sign contracts with data center and customer• Install Server

– Invoice Customer

Total Business Process

• Post-Production– Customer Support– Relationship Maintenance– Hardware upgrades– Platform upgrades– Continue to negotiate low data center fees

Financial Overview

• Income:– Rack is 42 units– 1 unit is ~$140 - ~$230 per month– Rack income = $5,880 - $9,660 per month

Financial Overview

• Expense (per month):– Full Rack costs ~ $675– Bandwidth ~ $200– FTE (20%) ~ $1,070– Insurance ~ $30– Non-earning rack units

(electricity, appliances) ~$80– Indirect Costs ~ $2,000

• Total Expense (estimated): $4,055

Financial Overview

• Income $5,880 - $9,660 / month• $70,560 - $115,920 / year

• Expense $4,055 / month• $48,660 / year

• Net $21,990 - $67,260*

• Assumptions: The rack is full of paying customers (best case)Does not include marketing expense

Questions?