Google Apps and Future of Hosting Companies

100 user accounts, 6GB of mailbox space for each of them, Online calendaring, Document management, Publishing webpages and many more from google apps for free.
I didn't hesitate to move my company accounts to google when I found this out. ofcourse my hosting provider isn't so happy since I freed up a lot of space for our other stuff on the host server, no more upgrades!
Just wondering what hosting companies are going to do after a few years from now; obviously they should face the big boy in the battle.
Recommendation? well beside thinking about another business line, I would suggest them to work on more complex application offerings; business apps such as sugarcrm or vtiger are always demanded by small businesses who doesn't have the skills to get them up and running.