Cloud computing has “adversely impacted” demand for traditional...
Cloud computing has “adversely impacted” demand for traditional managed hosting, according to privately held hosting providers, Wells Fargo analyst Gray Powell said Wednesday in an email to investors. Powell said he and associate analyst Priya Parasuraman spoke with several contacts…
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in the collocation, managed hosting and cloud space in recent weeks to get a sense of how cloud computing had impacted traditional data center services. Those contacts believe managed hosting business will grow between 8 and 12 percent year-over-year -- lower than the up to 20 percent growth previously expected, Powell said. “We do not see customers taking existing applications out of managed hosting environments and moving them into the cloud,” he said. “However, the bulk of new growth is going to cloud environments as businesses are increasingly willing to put new apps in the cloud or move existing apps to the cloud on the back of a technology refresh.” It may be difficult, for example, for Rackspace to “drive a meaningful improvement” in managed hosting growth from the 14 percent growth in Q4 back to the 20 percent level, Powell said. However, retail collocation demand remains consistent with levels found during Q4, he said.