These were the major themes presented this year at HostingCon 2011 in San Diego. With roughly 1,500 hosting service providers in attendance Cloud is the main topic of discussion in Keynotes and Breakout sessions. Why?  Because hosting providers need to provide disruptive services or lose market share to other hosting providers doing the same thing for less money.

Differentiation has to do with customer value. Speakers at the conference this year have pointed out that value only comes through offerings that are multi service, multi application oriented or “value” based. Last and maybe most important is the fact that as technology matures it become “diffused” or in other words “commoditized”. Diffusion leads to value depletion which leads to lower margins for hosting service providers. Diffused technologies and services become obsolete and disruptive technologies/services take their place.  Ironically, this was also the theme of a book written a decade ago by Clayton M. Christensen, The Innovators Dilemma. “Situation Normal, Everything Must Change” was the title of the keynote from Simon Wardley of Leading Edge Forum.

This cyclical process is in place today and Cloud computing is disrupting the current market. What this means to the current base of service providers is the need to “change” or be commoditized. Ironically DaaS built on a multi application delivery model with Cloud datacenter economy of scale creates disruption and differentiation. This is the core value proposition of the Cloud Platforms team at Citrix and the related Citrix Service Provider program.  Demand for DaaS based services is on the rise, and provides a disruptive, differentiated approach to capture market share.