[MUD-Dev] BIZ: Who holds your cahonas in their hand? (runs yourinfrastructure...; )

[Ren Reynolds]

As was in the hosting, outsourcing and telecoms game for some years
I just thought I'd stick up the industry for a moment <g> Though in
a nice way... no need to duck, unless you just like quacking.

On 09 September 2003 21:16, Adam M wrote:

> In general, a commercial MMOG that lets someone else run the
> servers is either truly desperate or just naive. Obviously, there
> are bound to be good exceptions in a market as complex as this
> <ducks and runs for cover :)

It really does depend on the deal you do. Any sensible hosting
company (read: this is the business model that I used) wants to get
up the value stack, so it wants to get some slice of the transaction
\ value based revenue stream that is coming from real customers. The
ideal way of doing this is in a risk \ reward deal with a company
such as a games company. But the deal should be real risk reward so
that both partners have a stake in it, generally telco's have pretty
good consumer channels that can be leveraged as part of the
deal. Bad business for you should be bad business for them, and the
other way round. Most of the out sourcing or psudo-partnership deals
I've seen that have fallen apart have been because one party has
tried to get one over on the other party, the thing is in IT service
this just don't work and everyone ends up loosing.

> there are many people trying a land-grab on the server-hosting
> Well there was. It's more land drop at the moment as the real
> estate costs are not going away but the revenue curves have.

> either because it's the major point of control - and gives you
> tons of leverage over the money (that comes from the MMOG) - or
> because it's so easy to do, and high-margin.

So easy to do !

High margin !!

I think very much not. Server hosting is pretty low margin
stuff. Hence my comments above about getting up the value chain. If
you look at the economics of a data centre, there are only two ways
to make it pay

  1) make it big, get a huge volume of business and cut operating
  costs to the bone - however this has massive up front costs as
  there is space and investment in op's tools as you have to run on
  very low staff.

  2) get up the value chain

ren
www.renreynolds.com
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