Reston, Virginia – August 15, 2012 – Hosting providers that do not differentiate themselves via value-added services see themselves locked into a destructive pricing race to the bottom, according to research from IT operations and cloud management solutions provider ScienceLogic™ Inc. In a survey of HostingCon 2012 attendees, nearly 50 percent name “price wars” as the greatest threat to the industry. Competition from large cloud providers, such as Amazon Web Services (AWS), Facebook and Google, comes in a distant second, with only 39 percent of respondents naming it as a threat.
Hosting service providers perceive factors other than price as the best way to differentiate their offerings while continuing to grow their business. Almost 60 percent cited management and support as the main way to differentiate from competitors as opposed to price, while only 34 percent cited price as a strategy to differentiate from the competition.
“Hosting companies know they have to fight against industry-wide pricing pressure that commoditizes their offerings. They have already begun to offer value-added services, such as advanced, proactive management and superior support to differentiate themselves and win in this space,” said Antonio Piraino, CTO at ScienceLogic. “The biggest opportunity we see is around managed application offerings. From our daily conversations with service providers, we know that the smart way to compete is to offer value–added services higher up the stack, and likely requiring a newer set of management tools.”
Other survey highlights include:
• 46 percent of respondents say they have no plans to use any integrated stacks, which included VCE, UCS or OpenStack.
• Only 1 in 6 see “Big Bad Wolf” AWS (Amazon Web Services) as their biggest competitor, while Rackspace and SoftLayer are top of mind when it comes to competition.
ScienceLogic is the global leader in hybrid IT service assurance. Over 47,000 global service providers, enterprises, and government organizations rely on ScienceLogic to significantly enhance IT efficiency, optimize operations, and ensure business continuity. ScienceLogic is the first monitoring solution to provide a comprehensive, real-time view of all IT components, whether they reside in a public cloud environment or on-premises. With hundreds of packaged management apps and custom dashboarding capabilities, we deliver the scale, resiliency, and automation needed to simplify the constantly evolving task of managing IT infrastructure, applications, and services.