If your datacenter processing load doubled this year, could you handle the growth?
That's what happened to Bazaarvoice, an Austin, Texas-based start-up that serves up product ratings and reviews to more than 180 e-commerce sites run by Sears, Dell, Macy's, and others. Last year, Bazaarvoice needed several dozen additional servers to run its proprietary software.
"Theoretically it would be possible for us to run our own datacenter, but it would be far more difficult for us to keep up with the growth without a service provider like Rackspace,'' says Andy Maag, vice president of engineering for Bazaarvoice.
"If you have to grow your capacity very quickly, you can run into physical space constraints, power constraints, and environmental constraints like air conditioning,'' Maag says. "When you're a fast-growing business that can present problems. When you're a specialist like Rackspace, and you're already in aggregate spread across many datacenters and you have so many people, you're able to handle fast-growing traffic.''
More booming businesses like Bazaarvoice are turning to Web hosting companies, including Rackspace, Savvis, AT&T, Terramark, and IBM, to handle their datacenter operations. These companies are growing at an average of 15 percent per year, according to IDC.
The growth is coming from "complex hosting,'' says John Engates, CTO of Rackspace. "It can be serving both the enterprise and the more Web 2.0-centric group. Complex hosting means it's not just dedicated [servers]. It's really a solution with firewalls and load balancers and networking components as well as services to take care of them like patching and monitoring.''
Engates estimates that complex hosting is growing at a much higher rate -- as much as 70 to 80 percent per year. He says about half of Rackspace's 15,000 customers buy complex hosting services. Rackspace operates eight datacenters, four in the United States and four in the United Kingdom.
The customers that are driving demand for complex hosting include software-as-a-service companies with unpredictable growth and e-commerce companies with seasonal spurts in traffic. Another thriving market is short-term promotional Web sites run by marketing departments or advertising agencies.
"One of the big ad agencies brings us lots of business,'' Engates says. "We host promotional Web sites that are limited in time frame for large Fortune 500 companies that have a new product to launch ... or for an event like Super Bowl-type activities.''
Leading this shift to complex hosting and utility computing is Savvis, whose revenues grew 26 percent last year to $794 million. Around 15 percent of Savvis' revenues are from its virtualized intelligent hosting offerings.