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1/30/2009
05:00 PM
Fredric Paul
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"Cloud Hosting" Mystifies Small Businesses

Only about a quarter of U.S. small businesses surveyed even recognize the term, while just slightly more than half of mid-size companies knew what it means. Rackspace's Mosso operation is trying to change all that.

Only about a quarter of U.S. small businesses surveyed even recognize the term, while just slightly more than half of mid-size companies knew what it means. Rackspace's Mosso operation is trying to change all that.According to Emil Sayegh, general manager of Mosso, which has pioneered use of the term, cloud hosting differs from standard managed hosting in several ways. With traditional managed hosting "you have your own dedicated gear, two-three-four-five spervers and a firewall all dedicated to you." With virtualized cloud hosting, Sayegh said, "you don't have five servers you can come to our data center and hug. Your code is spread over hundreds of servers, or maybe on a tenth of a server if your traffic is light."

Forgoing the hugs does have a payoff, though. Entry costs are much lower for cloud hosting, there's no capital expenses, and you don't have to predict what your needs will be to minimize your costs.

According to Sayegh, there are three situations where it makes sense to have a dedicated infrastructure:

1. If you have "very, very large scale" operations. 2. If your company is doing custom things that cloud hosting doesn't support -- "very, very database intensive" operations, for example. 3. If regulatory issues mandate that your data cannot sit on a share infrastructure, due to PCI or HIPAA for example. Sayegh says the regulations are catching up to the technology, but they're not quite there yet.

Download the Survey

Here's the rub for Mosso, though. Sayegh says the advantages of cloud hosting are weighted toward small businesses, but the survey indicates that smaller companies are not the ones who know about it or are planning on using it. Half of all small businesses have no idea how they would use cloud hosting, and data storage/backup, the most common choice, is favored by only 13% of US small businesses.

How Small Businesses are using Cloud Hosting (US and UK) mosso-small

Midsize companies have more capital and thus less need for cloud hosting, yet they're more informed about it and say they're more likely to use it. Only 29% of midsize respondents don't know how they would use cloud hosting, and 20% say they would use it to replace centralized computing resources.

How Midsize Businesses are using Cloud Hosting (US and UK) mosso-mid

For small and midsize businesses, the biggest impediment to cloud hosting is that they don't see a need, followed by cost concerns. Ironically, that could be an opportunity. If cloud vendors can prove they are actually cheaper than dedicated alternatives, those numbers could turn around quickly.

More from bMighty! Terremark offers its perspective on Cloud Computing and Managed Services

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