Table of Contents
MANAGED HOSTING: THE FOUNDATION OF NEXT GENERATION COMPUTING________ 3
KEY INVESTMENT CONSIDERATIONS – POSITIVES ___________________________ 6
KEY INVESTMENT CONSIDERATIONS – RISKS ______________________________ 8
WHY TODAY IS DIFFERENT THAN LAST TIME (ASPS) _________________________ 9
MANAGED HOSTING – AN OVERVIEW OF AN IT INDUSTRY RIPE FOR CHANGE _____ 10
ALTERNATIVES TO HOSTING; THE WAY IT WAS _________________________ 10
MANAGED HOSTING CAN OFFER ROBUST SERVICES AT A COMPELLING
VALUE ________________________________________________________ 11
LOWERING THE TOTAL COST OF IT OWNERSHIP AND ENHANCING RELIABILITY
THROUGH HOSTING ________________________________________________ 12
COST SAVINGS AVAILABLE AT BOTH CAPEX AND OPEX LEVELS ______________ 12
MORE THAN JUST ABOUT SAVING COST; ABOUT GETTING MORE FOR LESS ____ 14
COMPELLING CASH FLOW DYNAMICS OFFER ATTRACTIVE LONG-TERM ROIC _____ 16
WHY NOW? – KEY DRIVERS SUPPORTING THE RISE OF MANAGED HOSTING ______ 17
WHAT IS THE “CLOUD” AND WHY WILL IT BE A REAL DRIVER OF FUTURE
GROWTH IN HOSTING? _____________________________________________ 19
WHY NOW? – KEY DRIVERS SUPPORTING THE RISE OF THE CLOUD ____________ 21
KEY TECHNOLOGIES ENABLING THE ADVANCEMENT OF CLOUD COMPUTING AND
MANAGED HOSTING _______________________________________________ 22
AN OVERVIEW OF THE PLAYERS ______________________________________ 26
LONG-TERM INDUSTRY THESIS REMAINS INTACT __________________________ 28
COMPANY PROFILES _______________________________________________ 30
Table of Exhibits
Exhibit 1. OPCO Managed Services Industry Model ______________________ 4
Exhibit 2. OPCO Internet Services Comparable Valuation Table _____________ 5
Exhibit 3. Hosting Will Gain Share Of Enterprises Total IT Spending ________ 10
Exhibit 4. Hosting vs. Colocation and IT Outsourcing ____________________ 11
Exhibit 5. Construction of High-Quality Data Center Facilities Is Capital Intensive
______________________________________________________________ 12
Exhibit 6. Theoretical Deployment Demonstrates Cost Savings from Managed
Hosting ________________________________________________________ 13
Exhibit 7. A Deeper Dive – Where the Savings Materialize ________________ 13
Exhibit 8. Costs and Concerns in IT Maintenance; Compelling Savings through
Hosting and Cloud Adoption ________________________________________ 14
Exhibit 9. Illustrative Scenario of Attractive Returns from Hosting Model (Based
on 1Q09 Financials) ______________________________________________ 16
Exhibit 10. Cloud Computing Represents the Next Step Forward in Hosting __ 18
Exhibit 11: The Three Layers _______________________________________ 19
Exhibit 12. “Cloud” Means Different Things to Different People _____________ 19
Exhibit 13. Cloud Can be Provisioned as Public and Private Pools __________ 20
Exhibit 14: Blade Architecture _______________________________________ 22
Exhibit 15: Multi-core _____________________________________________ 22
Exhibit 16: Moore’s Law Drives Increasingly Affordable Compute Capacity ___ 23
Exhibit 17: Switched Fabric _________________________________________ 23
Exhibit 18: Dynamo System ________________________________________ 24
Exhibit 19. Emerging Cloud Offerings Stress On-Demand Provisioning and
Scalability ______________________________________________________ 25
Exhibit 20. Data Centers And IT Services Competitive Landscape Overview __ 26
Exhibit 21. NC Computing Drives Communications Intensity _______________ 28
Exhibit 22. Enterprise Computing Complexity __________________________ 29
Exhibit 23. NCC Transition Will Require A Diverse Set of Horizontally Focused
Services _______________________________________________________ 29