Hosting providers have over the years established a well driven sales engine that adds new customers to their current estate to ensure continued growth. It has become a game of expanding current customer portfolio and drive down cost with cheaper labour and infrastructure cost.
It looks like a fine horizontal approach (scale out/in) where new customers are added and removed again when lost. But the question is whether the hosting industry has come to a point where continued expansion requires a vertical approach (scale up/down). I think we all can agree that daily routine services ought to be automated in a more flexible and agile way through a self-service portal with chargeback and billing. But more important is the development of new services in your hosting shop. This is where hosting providers can differentiate their offerings and become more relevant for their customers in the future. It is evident that it becomes difficult to compete with public cloud providers like Amazon on a simple service. Focus should be on the development of relevant services to the business you operate in. At the end of the day, it is easier to expand the business with your existing customers than competing for new customers on standardised services.
This has not only consequences for the hosting providers, but also for hardware vendors that need to step up and begin to deliver managed resource pools containing virtual machines, network, cpu cores, memory, and capacity resources on a pay per use basis. Such a managed solution will enable hosting providers to focus on the development of future services that differentiate them in the market. This can be achieved in a risk sharing collaboration with hardware vendors that can help developing unique services that are tightly connected to the converged infrastructure along with supporting go to marked resources.
Converged and Hyper-converged solution with self-service portals are a good place to start. They offer resource pools with virtual machines, cores, memory, capacity and network resources in a flexible and agile way.