Herculo Challenges Large Cloud Hosts With Magento Services
Can smaller hosting providers with a narrower focus drive a wedge in the cloud market against big names like Rackspace (NYSE: RAX) and Amazon Web Services (NASDAQ:AMZN)? Herculo, a brand-new startup dedicated primarily to the Magento ecommerce platform, thinks so. And if its approach turns out to be right, it could inject a new type of competition into the fierce cloud and hosting world.
Herculo, which launched at the Imagine eCommerce Conference last week, pitches itself as a "managed" hosting provider with a focus on a small stack of applications — namely, Magento and WordPress, two massively popular open-source platforms. It is a divison of Pixafy, a team of developers whose expertise is also in emcommerce and content-management software platforms.
The key idea in Herculo's business strategy is providing a high level of specialized engineering support for Magento and WordPress, relieving hosting customers of the burden of deploying and maintaining the platforms on their own. In the company's words:
Herculo redefines web hosting as we know it. Our expert team of system administrators have identified core bottlenecks in both WordPress and Magento, the two web applications we are betting will power the internet of the future. We have built a Private Cloud Computing solution specifically handled to solve these limitations.
Now, the race is on to determine whether vendors see value in the narrower focus — maybe we could even call it boutique hosting — that defines Herculo. There's good reason to believe that smaller organizations, in particular, will, since the Herculo model essentially allows them to offload engineering and development costs to the same package that provides their hosting. Because few smaller organizations have dedicated Magento or WordPress staff, this could be very attractive.
On the other hand, Herculo may have a hard time competing against bigger hosting providers for the business of larger organizations whose needs span beyond Magento and WordPress. The model doesn't seem like a good fit for customers who want a more flexible private cloud.
Still, plenty of vendors and content providers are small enough that Herculo could work for them. And that type of hosting approach will present a new challenge for larger providers who — as a deal between Rackspace and Magento showed just last week, for instance — are eager to tighten their share of the ecommerce market but currently don't offer the specific application expertise that Herculo's managed strategy promises.