What are the Web hosting providers after and what should they look out for when forging new business relationships?

There’s a lot of activity on the Web hosting front these days, with alliances and partnerships dominating the scene.

But what’s behind all this collaboration among providers? What are the Web hosts after and what should they look out for when forging new business relationships?

According to a recent quarterly report by Independent research firm, Tier1 Research, mass market Web Hosting is in the midst of a major transformation, and states that currently “M&A is the DNA of change.” Philbert Shih, analyst for Tier1 and author of the report told TopHosts what he thinks is behind the growing amount of business alliances.

“Partnerships are becoming more popular with hosters because it is the best way for them to access products and services that they could otherwise not develop themselves… it enables hosters to expand the scope of their offerings,” Shih said.

As competition among providers heats up, having more to offer provides an edge in the marketplace. It gives clients a reason to stay put, Shih said, and allows them to work with one company for needs that go beyond just Web hosting – a quality many more shoppers are seeking today.

The Perks of Partnering
Tim Varma, PEER 1’s Director of Product Management, and Ted Smith, PEER 1’s VP of Dedicated Hosting, spoke to TopHosts about their fairly recent partnership with eCommerce security company ControlScan. They say, “No one can be an expert at everything,” but companies that try to expand their products and services, through partnerships, go a step further in solidifying customer satisfaction.

“Bundling products from multiple partners mean fewer invoices and fewer points of contact for the customer,” Varma said. “End result is a better customer experience than if they purchased from each vendor separately.”

Steve Kahan, VP of Marketing and Product Management at The Planet, also revealed that it’s all about delivering value to customers. His company has forged many relationships, allowing them to widen their product portfolio for clients. To name a few, The Planet’s partnerships include Dell, Cisco, Microsoft, Red Hat, cPanel and NetApp.

By utilizing another company’s abilities and services, Web hosts like The Planet can compete in a broader marketplace, ensuring a wide range of services are available and optimized for the platforms customers use.

“Software vendors need hardware platforms, while hardware manufacturers require processors, cabling, routers, hubs and many types of software applications,” Kahan said. “It’s a symbiotic industry, so partnerships and alliances are critical for every company. Ultimately it’s about driving value for customers.”

Brian Garvey, EMEA Channel & Alliances Director at Rackspace in the United Kingdom, talked about his company’s vast partnership community. As with PEER 1 and The Planet, he also noted that partnerships enhance the value of a business. Instead of going it alone, a properly executed deal between companies can tap new areas of expertise and skills, in a faster and more efficient way.

“An example is the Rackspace Partner community, 250+ partners with expertise far greater than we could grow ourselves and which helps us compete in more and more complex solutions,” Garvey said. “It puts us on a level playing field with IBM and other leaders, but at a far lower price point.”

In terms of cost, partnering with an established organization also means infrastructure, management and resources are already in place. Not having to develop a product or service from scratch translates into a great deal of savings for any hosting provider.