"We understand what's needed by our enterprise customers not just to solve Internet-facing applications but back-office applications with demanding performance requirements,'' says Bryan Doerr, CTO of Savvis. "We understand how to be an extension of the operational IT arms of our clients.''

Savvis has 29 data centers worldwide, including a new energy-efficient facility that opened in the US in April. Savvis offers managed hosting and utility computing services in every major metropolitan area where it does business.

"We see good, strong demand for our data centers,'' says Jim Kozlowski, vice president of hosting services at Savvis. "We see the most demand in Santa Clara, New York/New Jersey, Washington DC and Chicago. We have capacity plans in place to meet the demand in those areas. ''

Analysts predict the shift toward utility computing will continue in 2008.

"The thing that is most important is the evolution of utility computing offerings for all of these vendors. I'm talking about virtualized, communal infrastructure that can be purchased on demand. That's the key trend in product and capability for all of these vendors,'' says Lydia Leong, research director at Gartner and co-author of a recent report on North American Web Hosting.

Analysts expect the growth of complex Web hosting to continue despite the US economic slowdown. That's because it's cheaper for companies to hand off data center operations to service providers than it is to build data centers, buy servers and hire IT staff to operate and maintain them.

"We don't believe the US economic slowdown will have much of an impact in the short term,'' Leong says. "Companies that spent money developing software last year are going to continue to deploy it this year. . . . If CIOs start getting dire budget cuts and need to find ways to be more efficient, outsourcing can be one of those ways. That's one of the strongest arguments for virtualization.''

Utility customers predict more growth

Bazaarvoice, which has outsourced all of its data center operations to Rackspace since 2006, anticipates growth in 2008. The company has dozens of dedicated servers that it rents from Rackspace, which is responsible for powering and cooling the servers, server operations and maintenance, and network connectivity.

``Rackspace is our origin data center. That is where all the data originates from, so when you read a product review on one of the Web sites we support, our application servers and database servers at Rackspace serve up that information,'' Maag says.

Bazaarvoice uses Rackspace's Dallas data center, with Internet content provider Akamai as its back-up provider.

"The advantage of using someone like Rackspace is that they are experts in physical hardware and network management. We would have to invest a significant portion of our engineering time toward that, and we didn't want to have to do that,'' Maag says. "If we ran our data center, physical space would become a concern when we're trying to scale like that.''

Maag says the fact that Bazaarvoice uses Rackspace's data center rather than running its own appeals to its largest corporate customers.

"Rackspace lends us a lot of credibility,'' Maag says. "Every client is concerned about where our data resides. It's a lot nicer to say that we host our machines at Rackspace,'' which runs data centers that are certified to meet SAS 70 security requirements.