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Brave Tech World

October 26, 2006


THU
26
OCT
2006

Who's the winner of Web 2.0 companies?

By Marcelo

 

    Digg? YouTube? Flickr? Nope.

 

    The winner is Web Hosting and Data Center companies. Check out www.1and1.comOpen in a new window and click on the "Servers" tab. Stare at that page for a minute and see the yellow sticker saying "Sold Out". What? They sold out their entire inventory of server lease? That is beyond impressive assuming that 1&1 is the biggest Web Hosting company in the world.

 

    This is different from the Web 1.0 boom, where people would buy their servers and routers (mostly from Sun, IBM and Cisco) at a huge upfront cost, then have it not be used to its fullest capacity (because the CTO over-estimated the traffic). Then, once the company would bust, the servers, routers and licenses for databases would be sold on the used market at a fraction of what they paid for it. This situation had a major downturn effect on the big tech suppliers.

 

    Web 2.0 is different. First, to get a very good server costs you just a couple of thousands dollars. Colocation is also much cheaper. On top of that, you have very affordable managed servers and virtual servers. Even if the Web 2.0 companies go bust (and most will), 1&1, Internap and other data centers will do much better this time around because they better understand how to grow their business without doing too much upfront expenses.

 

   



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