According to Data Center Knowledge, Rackspace Cloud general manager Emil Sayegh has stated that “over the next five years, shared hosting as we know it will be made obsolete by the cloud.”

While that may sound wonderful to sellers of cloud computing solutions, such as Rackspace, Amazon and Google, it isn’t necessarily true.

Though there is no doubt that cloud computing is going to be a disruptive force in hosting, it is not a magic bullet that is going to make shared hosting go away, especially not within the next five years.

The reason is simple, shared hosting is too entrenched and still offers too many benefits for it to be completely done away with. Though it’s likely that cloud hosting solutions will probably take a big chunk of the hosting market, it’s not ready to sweep away the competition completely.

The Entrenchment of Shared Hosting

All of the Web’s largest Web hosts, including 1&1, Hostgator, Bluehost, etc. use a shared hosting platform built upon dedicated servers. They alone have millions of dollars invested not just in the servers and datacenters, which could be converted (at least theoretically) to a cloud infrastructure, but also in the technology that drives it and the expertise to maintain it.

The costs of transitioning all of this to a cloud setup would be huge, almost certainly into the many of millions of dollars. While it would likely be money well spent, the vast majority of hosting customers would never notice any difference. The simple truth is that, for the vast majority of hosting customers, a basic shared host is a great deal. They have no need for cloud hosting and won’t care if their host uses that infrastructure or not.

Hosts, for the most part, have little reason to invest. Cloud hosting solutions, generally speaking, have been targeted at larger customers, where scaling has been a much larger issue (See Twitter and Amazon S3), and it is going to be quite some time before cloud hosting trickles down to smaller sites.

Attacking the Trenches

This isn’t to say that cloud hosting is a sham or a bust, just that its sellers may be overly optimistic about its reach and how quickly it will spread. There is little doubt that cloud hosting is a game-changing technology and that it will have an impact on the future.

Though it may not be poised to completely wash away the shared and dedicated hosting structure, there is no doubt that it is making significant inroads. As the costs have come down and the flexibility of the service has grown, more sites have begun to use it in lieu of dedicated servers or VPS accounts.

However, the ideal cases for cloud hosting accounts still tend to be on the high end. Sites that have scaling issues, sites that routinely reach the front page of Digg or other social news sites, etc. Cloud hosted sites, by spreading the load across multiple servers, can scale up and down as necessary, making it cheaper and more reliable than some dedicated solutions.

The reality is that the bottom 90% of sites have little use for this. For them, shared hosting is fast, cheap and reliable. Though hosts could switch their datacenters to using a cloud infrastructure, which would be virtually transparent to the user, with almost no added benefit to the end consumer and large expenses that would have to be passed on, it seems unlikely that hosts will sign on completely.

What is more likely is that hosts will begin to set up new services based on cloud hosting solutions, offering them side by side with standard shared hosting accounts. These accounts would likely cost more money, though not significantly more, and would allow users to take advantage of some of the benefits of cloud hosting, similar to what Media Temple does already.

This could, and will, provide a compelling option to many of the people who currently use shared hosting, especially those who anticipate traffic spikes. However, it is unlikely that shared hosting will become “obsolete”, at least not until the costs of using and maintaining a cloud hosting structure drop to less than that of a shared hosting one.

With all of the expertise, equipment and software out there, that is going to be a while.

Bottom Line

There is no doubt that cloud hosting is going to radically change the hosting environment in a few years time. We are already seeing its impact on the higher-end of the hosting scale and it’s going to trickle down, albeit slowly, to smaller and smaller sites. However, most likely it will exist in a new hosting ecosystem alongside with shared and dedicated hosts, not as a replacement.

No matter what though, it is a very exciting time to be an observer and a participant in the hosting industry. With new technologies coming every day, everyone is eager to see what the next new technology is and how it will change the game forever.

But even in this rapidly-changing field, the foundations and stalwarts take time to change. They don’t get washed away, but take time to erode.

That’s what will happen over the next few years, at least until a new equilibrium is reached. The good news though is that there is plenty of room for everyone in the hosting industry and enough varying needs to make shared, cloud, VPS and dedicated hosting all viable.

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