Scott - execution will certainly be the key to running a successful hosting business, and DELL has broad experience in running a large site, as well as a reputation for great execution on pretty much every other business they have gone after. I think the potential is good for them to be a successful, money making host - they certainly know as much or more about that than anyone else I see moving in that direction - and if they "package" that knowledge, they create a services practice as well, providing expertise to other hosting firms, who are then much more likely to buy DELL hardware and support for their own efforts.
I have met with a number of companies going into the hosting space and they are usually running flat out to get ahead of the curve. That is a perfect scenario for "picking the solution that the last guy picked" if the last guy is still in business. That was the formula that propelled SUN into many wall street trading desks - if more successful traders were using SUN, buy SUN, why take a chance...
If DELL seeds that market with their own hosting business, and gets a few other key companies, and then is successful in making money, all of which seems pretty likely, they will have a big leg up. And this is not a chump change segment, it could amount to 500,000 servers in the next 12 months. DELL could well lead in that market. |
