Load balancing offers new opportunities for managed hosting providers 1 September, 2008 By Chris Talbot

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As a manufacturer of load balancing products, KEMP Technologies helps support managed hosting providers, and it's products are geared towards the small- and medium-sized business (SMB) market -- both in features and in price point, said Marc Goodman, director of marketing at KEMP Technologies.

According to Peter Melerud, vice president of product management at KEMP Technologies, load balancing equipment is typically geared towards the enterprise market, so it has a feature set and price point that is only affordable to larger enterprises. However, the need for load balancers aimed at the SMB market has increased with the added servers within the SMB environment, he said.

Once a company's servers beyond one, there's a need for redundancy, scalability and added performance, Melerud said. This is true of SMBs, but it's also true of managed hosting providers.

"They actually represent a very specific target market for us," Melerud said of managed hosting providers.

While managed hosting providers can offer server services to SMBs, the price they'd have to charge for load balancing is still outside of the typical SMB's budget. In some cases, the solution has been to sell space on a load balancer that's shared by multiple SMB clients, but that adds issues around security and usage, he said.

"There are a number of difficulties associated with sharing one load balancer across multiple clients, and generally smaller clients don't want to do that, so they're back to square one," Melerud said.

He added that at least half of SMBs prefer to pay for their servers to be provided as a hosted service, and with their increasing needs on servers, they'd very much like to have affordable load balancing as part of that service. According to Melerud, hosting companies generally charge $200 to $300 per month per server, but load balancing typically costs about $1,500 per month on top of that. KEMP's goal was to provide a way for managed hosting providers to offer load balancing services at a price SMBs could afford. That was done by building a load balancer to a specific price point for SMBs. Melerud said managed hosting providers can offer load balancing to SMB customers for about $100 per month, which includes technologies like SSL encryption and Layer 7 switching, as well as dedicated management. KEMP claims it's the only vendor currently offering such an SMB-focused load balancer, so there's also a competitive advantage for managed hosting providers that purchase the equipment, he said.

"They're actually gaining functionality with a dedicated model as opposed to being on a shared model with more enterprise-focused features," Melerud said of SMBs. It represents a significant opportunity for managed hosting providers that serve the SMB space, he said. With the need for load balancing increasing among SMBs, they can offer something that most providers can't, he said.

"It's a way for them to compete with others who essentially don't have access to this type of technology," Melerud said.