All products go through a product cycle, and when looking at the BCG Matrix, virtual hosting services will go through a similar process of development.
Virtual hosting has taken off as the latest form of computing. Making IT delivery more effective, more efficient and economically viable, virtualisation will give businesses of all sizes a better way to run daily processes.
In each stage of the BCG Growth-Share Matrix, the product life cycle represents a profile of risk and return. In retrospect, the best way of product management in any company, whether it’s virtual hosting or anti-dandruff shampoo, is to keep a balanced portfolio of products, so that there is presence in both the high growth area and the low growth area.
Virtual Hosting: Low-Growth or High-Growth?
We could be seeing the transition from low to high growth with virtual hosting products. Although the concept has been around for many years, with a computation scientist called John McCarthy discussing the very first theories as early as 1960, the application of virtual hosting in the modern business environments is still pretty new. But there have been some big recent breakthroughs, with educational bodies such as Sheffield Hallam University, Brinsworth Comprehensive School, and Curtin University of Technology moving over to virtualization. Other industries that are currently using virtual hosting include e-commerce, travel/leisure, healthcare, insurance, technology, retail, food and beverage, financial services, entertainment, media/publishing, pharmaceutical, non-profit and manufacturing.
So where do virtual hosting products currently stand? Moving over from high-growth to low-growth, it seems that virtual hosting could soon be ready to land on the big cash cow.
When Will Virtual Hosting Products Become the Cash Cow?
The cash cow can be defined as: low growth, high market share. Cash cows are in positions of high-market share in a mature market. With competitive edge gained, virtual hosting products will have increased profit margins. Currently, the application and offering of virtual hosting services is still in an early stage, so competition isn’t fierce. With a few industry leaders, including Microsoft, pricing is still high. But the cost-effectiveness of the products/services offered with virtualization will make cloud computing more and more popular over time.
Price Elasticity of Demand (PED)
As more and more offerings become available in the world of virtual hosting, the price elasticity of demand will change in response to the demand for the goods/services. With increasing providers and cloud hosts, competition will increase and prices will decrease.
If you are interested to learn more about the virtual hosting services available to you, get in touch with SwitchLink today.
