Last week BackupAgent sponsored the Tier1 Hosting Transformation Summit Europe 2009, the premier forum for executives in the hosting, datacenter and Internet infrastructure sectors. Besides attending and exhibiting in the exhibitor’s lounge, I also took part in the on-stage discussion panel ‘Hosting Apps & SaaS: Hosted Exchange, CRM, Sharepoint, and Backup Applications’. I discussed with the other panelists, other ISVs and a hoster, the benefits for hosters and service providers to start offering hosted applications. Here are some of the key topics that we spoke about:

Boost ARPU

As traditional services like shared hosting, dedicated hosting and DSL are commodities, the price has dropped and service providers cannot make high margins with these services anymore. By offering new, value added services such as Hosted Exchange, Hosted CRM, Hosted Sharepoint and Online Backup, service providers can make more money from the same existing customer base.

Reducing churn

When offering new services, the customer already trusts his/her service provider with its business critical data (email, crm, etc). Therefore the likeliness they will switch providers will reduces to the situation where the service provider only offers low-price commodity services.

Team-up with resellers

Teaming up with resellers (local system integrators, IT-administrators) is a smart thing to do for service providers. Resellers have local presence, a close relationship with the customer that is based on trust. The service provider has the ability to host a scalable platform, offer a competitive price and automatically provision and invoice users. This combination has proven to be successful. (by the way; BackupAgent has a partner program for this: Backup Service Distributors).

Licensing of software for service providers

An important item for ISVs that sell software to service providers: match your licensing to the service provider’s offering. Service providers are earning monthly revenues based on subscriptions, therefore service providers don’t want to pay large upfront perpetual licenses but rather go for a pay-as-you-grow model whereby the ISV’s business grows along.

Online backup and Microsoft Services

Many service providers are offering the Microsoft hosted services portfolio: Hosted Exchange, Hosted CRM, Hosted Sharepoint. ‘Hosted Backup’ or ‘Online Backup’ is the missing piece in that offering and BackupAgent’s experience is that the conversion of existing customers of hosted Microsoft services to online backup can be significant as these customers are already used to store important data externally.