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InterOPS, which offers Internet management and consulting services to enterprise customers, takes an Accenture approach. Chris McLellan, former chief architect and vice president of Fidelity Investments' Internet Operation Center, founded the company in July 2000. At Fidelity's encouragement, McLellan decided to take on the e-business needs of other enterprises, and in October 2000 the first client, insurance.com, signed on. Now, InterOPS has a half dozen clients, including Fidelity. It targets companies that have invested heavily in e-business, but that are unhappy with the level of service they get from their Web environments. On a short-term basis InterOPS offers consulting; it also provides monitoring and management services and education programs to its customers. The company helps a client bridge the gap between managed services and colocation - those companies that "are not willing to fully outsource or relinquish control," according to Vice President of Marketing Jeff Kaplan.

It's a new niche - one overlooked by many ill-fated MSPs.

"We think we came into the market at just the right time to bring a new generation of thinking," says Kaplan. "It's a higher level of touch than the first generation of MSPs thought [necessary]."

Enterprise businesses were afraid of Web Hosting.

"First and foremost," says Kaplan, "they want to make sure they're responsible for the strategic development. The buck stops with them for performance, and they want responsibility for [a system's] evolution on a step-by-step basis.

"They don't want to be responsible for the day-to-day, reactive management that comes with responding to endless numbers of alerts and alarms that occur - they don't necessarily want to be in the position to weed through all the data generated by that activity."

Managed service providers, Kaplan says, automate out the human factor, which is threatening to the enterprise IT manager.

InterOPS has published the first of three white papers, called "Beyond MSPs: Defining a Next Generation Management Solutions Partner." It says, in part, that instead of colocating or signing on with an MSP, "a superior approach is one where a management partner is engaged who fully leverages existing in-house management tools and complements the existing staff."

And yet, InterOPS does not cut off its market at the enterprise - it is also looking to partner with web hosting companies.

"We've come to the realization that, while [web hosts] are very good at selling real estate, they exceeded their core competencies when they got into managed services, and they have to get back to their core competencies to stay alive."

For the enterprise customer, InterOPS' history with Fidelity is certainly enticing.

Now it's about tradition. Web Hosting had no tradition. Web Hosting was new economy.

And, companies like Conxion have one intrinsic advantage over the Digital Islands of the world.

"The whole economy has no doubt changed," says Simmonds, "and we're in the fortunate position of being private, so we don't have the big reporting concerns that the public companies have. It makes it easier to be out of the spotlight."

Web Hosting was public.

The Low End Theory

Times have certainly changed, and an industry has been turned upside down. It's still business as usual for those Web Hosting scoffed at - the ones who never got the invites to the parties or the write-ups in Industry Standard. But all of a sudden, those companies are the ones others are aspiring to. Marc Hardgrove, co-founder of Jumpline.com, is no longer embarrassed by his company's relatively modest tradeshow booth.

"We got involved right when everyone was making money hand over fist," he says. "The hosting industry was thought to be a gold mine, and we were just a small shop trying to focus on business. ... We second-guessed ourselves every once in a while, thinking we should be out on the road doing shows and impressing everyone, but it turns out [not doing that] was a blessing in disguise.

"What happened is the money screwed up a lot of companies. The money changed their business plans. ... Everybody talked IPO no matter what they were. It's not the things people are talking about today, it was 'how big is your yacht?'"

Now, says Hardgrove, those staying afloat are focused on return on investment. For companies like Jumpline, that was always the focus - out of necessity. "We never got to participate in the whole high times, so we know nothing about it other than what we read, and what we saw peeking through the window," says Hardgrove. "If we would have gotten the money, I'm not going to say we wouldn't have made the same mistakes."

If there is a new generation waiting to take Web Hosting's place, Hedgehog Hosting is one of its first-born. Jeff Chanesman, Richard Feller and Bean are all industry veterans - they were close with Web Hosting and got to know all his bad habits.

"Five years later, it wasn't the job we loved anymore," says Bean.

Web Hosting had huge startup parties, top-notch office space and expensive conference tables. Hedgehog doesn't even have an office - business is run out of the homes of the three principals and hardware is colocated at an Intel data center in Northern Virginia.

Hedgehog was formed to fill what the three see as an industry-wide void. Non profit organizations and operations of similar size aren't big enough to warrant the necessary attention from the likes of Digex, but need more than the smaller hosts could offer. With three employees and an outsourced infrastructure, the economy of scale and the need to be big vanished. With Web Hosting, bigger was always better.

The three say it's in the company's best interest to make sure a customer is happy. "We're very careful about growth," says Bean. Hedgehog hopes to bring on about 30 customers, then evaluate the situation to see which way to grow.

Another problem to overcome: the guilt by association that comes with working in an industry with a tarnished public opinion. "We're trying to bring legitimacy to something that got really seedy," says Chanesman.

All three rely on what they call an "underground network" of small web hosts - those who help each other out in order to ensure survival underneath a difficult market. Among that network, beneath the smoke and mirrors, reputation is everything.

"Business is like life in general," says Metamend CEO Richard Zwicky. "You only have your name. It's good as long as you're honest with people and you don't deceive them." Metamend is an automated web site optimization and promotion tool.

"Don't portray yourself as something you're not," says Zwicky. "Tell them what you are so they know what to expect."

Web Hosting liked smoke and mirrors.

The Resurrection?

"We are in the third generation of the Net," says Zwicky. "The last one was all about show - it was waving the flag and throwing money around. Now, it's 'how do we control cost?' and 'how do we get ahead?'"

Customers, he says, were just numbers a year ago - you signed them up, they made your company bigger, and size was all that really mattered. Now, he says, a new concept has been embraced across the industry: customer service.

"[Companies] that will continue to survive," he says, "are ones that ask their customers what they need. A lot of times, we in the industry bite into something and think it's the greatest thing in the world." Whether or not it helps a customer, he says, gets lost in the shuffle.

Thus, those still fighting against the current are rethinking what matters in their business practices. The economy has forced their hand. Hardgrove agrees. "I heard the statement in the hosting industry that a customer is like a fish - if you found one you didn't like, you threw it back in the ocean," he says. "That's certainly not the attitude now."

These days, survival builds resolve. "For the industry," says Zwicky, "it's very good. You don't know the good times if you haven't felt a little pain. Companies that have learned their lessons are able to take it. They learn that moderation is a good thing."

This industry, he says, simply got too far ahead of itself for its own good. Web Hosting knew no moderation.

Says Hardgrove: "Everyone thought this thing was a sprint, and it turned out to be a marathon. It's who's going to be around in 2006." Web Hosting lived for the moment. Web Hosting is dead. His was an era whose time had come to pass. Those who forge on are rebuilding an industry on solid ground, where there once was none.

Good riddance, Web Hosting.

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