The hosting business is going through a shift that could make many providers obsolete or conversely give the smart ones the keys to the kingdom.

It's very clear why this is the case. Cloud computing is serving as a catalyst for innovation that is just beginning to be felt in all parts of the world. That movement will push deeper as more small businesses see ways to make their work more focused by using services that remove the IT burden from their work.

We're live blogging this morning from the Parallels Summit, where hosting providers are learning about how to turn their infrastructures into multi-tenant environments so they may serve this emerging market.

Let's get started!

9:06 a.m. EST: Bloody Mary drinks at the opening keynotes. Yes, cheers!

That's a way to get the event started. Jack Zubarev just took the stage. The vice president of marketing for Parallels is reviewing the "technology sunset curve."

In 1883, AC v. DC emerged. Today 124 years later, there is a utility ecosystem. In the service vendor world, the ecosystem includes the hardware, infrastructure hosting, Web apps, Web design and resellers.

What's important. It is not where you are - it is about your core expertise. For example, Wordpress is a symbol of excellence in Web apps within the hosting environment. What's important? The ways the hosting services work with different customers is a matter of how small businesses differ across vertical markets.

9:21 a.m. EST: Zubarev says the short-term priorities for Parallels include:

  • Hosted communications
  • A broad application and service ecosystem
  • The wide variety of infrastructure providers

9:29 a.m. At&T's Ebrahim Keshavarez is on stage. Keshavarez is responsible for AT&T's portfolio of small business products.

9:31 a.m. EST: What's new for Keshavarez is IT-as-a-Service through a multi-tenant face. Other markets he sees as important include communications-as-a-service and infrastructure services.

9:36 a.m. EST: Keshavarez says integrated services will drive adoption. Customers will often seek infrastructure services but they may also want SaaS services, too. That creates a multiplier effect for the hosting providers.

9:40 a.m. EST: The more purchased means more chance to bundle. On top of that, it's about mobility. AT&T's focus is on mobile. He sees two markets. People that want broadband and those that also seek additional services from the telcos.

9:44 a.m. EST: Keshavarez says there are many channels. There's a significant growth opportunity. AT&T channels include stores, call centers and partners who help sell AT&T products.

9:52 a.m. EST: Keshavarez is deep into channel talk. He just referred to "technobabble," and turning into business talk. Yuck.

9:58 a.m. Bill Staples of Microsoft is saying the company is a partner and a competitor in the hosting space. He is citing why the cloud is popular now with information from Gartner that states that by 2012, 80% of Fortune 500 companies will use some form of cloud services.

10:04 a.m. EST: Staples says Microsoft is still in its early days with Windows Azure and its PaaS offerings. He is recommending Microsoft Hyper-V Cloud for three reasons:

Cost: Windows Datacenter edition pricing: $65 per CPU per month with unlimited virtual machines.
Scale: Run 50 or more virtual machines on a single windows server, memory constrained.
Demand: Provide the capability for demand on the environment.

10:11 a.m EST: Now on to the demo to see how Parallels Automation works with Hyper-V.

Big struggle is billing for hosting services. We see that a lot. Parallels with Hyper-V provides a full billing environment. We're now seeing what an end customer will see when they purchase Parallels Automation. Pretty basic but difficult to see the level of ease in setting up.

10:18 a.m. EST: Microsoft is introducing WebMatrix, a tool for the user who builds sites from scratch. It includes the capability to develop a site from templates. In the gallery you can build a site from Wordpress. It automates the set-up for Wordpress for the user.

10:22 a.m EST: He just set up a Wordpress blog and is showing how the customer sees what pricing options are available. My question: why not just use Tumblr or Posterous? He posted the blog: http://mymind.tv/

Cool. This is for the small business that wants to build a home site and is willing to make the investment in hosting.

10:29 a.m. EST: Got to go. Back in a bit.

10:39 a.m. EST: In a session with top executives I made the comment that I wonder how long they will be around. Chairman Beloussov says the company is like Switzerland. They are independent and a buffer as is Switzerland between Europe and Russia. The army is formidable. Like Switzerland, Beloussov says Parallels will difficult to conquest. It will remain independent. I told Beloussov that I will remember that. We'll see.

10:49 a.,m. EST: Reporter is talking about the conversation he had with partners and the problems the company has had. That may be why the company does not get acquired. Those problems are an opportunity, Beloussov says.

We'll be back later!