HostingCon Wrap-Up: Hosting companies on the state of business & cloud computing buzz

Jeremy Sherwood

blog-201108-hostingconWrapping up the end of HostingCon, I’ve got lots of ideas, friends, and things to take away. One of the last – and best – sessions I attended was “Ask Away Q&A – Hosting Leaders Answer Your Questions.” 

This session had a great mix of top hosting executives (Ryan Kekos – CEO of GearHost; Dallas Kashuba – Head Honcho  of Dreamhost as he calls himself; and Mark D. Adolph – CFO of Hostway) poised to answer attendee questions. 

The first couple of questions were geared towards each company’s background and approach to cloud computing. Then it got interesting.  

blog-201108-img-00751
From left: Liam Eagle, Web Host Industry Review; Ryan Kekos, GearHost Inc.; Dallas Kashuba, DreamHost; Mark D. Adolph, Hostway Corporation

I raised my hand and fired off a question that I have asked myself, and heard many times from a lot of MSPs over the years.  I was interested to see how these three different-sized hosting companies would answer: “My question is focused to Ryan first, and then I would like to hear both Dallas and Mark’s views on the topic. 

Ryan, how do you find success and the ability to stay in business with all of the acquisitions and commoditization happening with the cloud? Secondly, do you feel that there is still opportunity for others to start a business and thrive in this space?”

“You don’t…you might as well quit or not even start,” Ryan laughs as he starts to answer. He then goes on to explain that the key to success being the small guy is to really find the one or two things that you are good at and then hyper-focus your efforts in that niche. 

He said that there is still plenty of room for others to join in the fight and do well as long as they find their specialty. GearHost is practicing what Ryan preaches in this area.  They are one of the few companies that I know of that has a super focus on just the Microsoft stack of solutions.

GearHost focuses on providing a full feature set of services around Microsoft applications to the masses.

Most managed services providers offer some support or offerings around Microsoft applications, but Gearhost provides not only the infrastructure but also the support and service-level agreements all the way up to the higher end application level, where most providers don’t dare to go. This is the niche he was speaking about.

Dallas takes the mic and starts his answer by agreeing with Ryan: “Yes, there is space for all of us to play.” He continues by explaining the key to his company’s success is a simple formula. People + Culture + Relationships = Success. 

He explains that there isn’t anything really unique about the “technology” they use to provide questionably one of the largest shared hosting environments in the United States. He said the key for their business growth and retention is without question around his People, Culture and Relationships. 

If you have ever read the DreamHost Blog or newsletter, you can’t help but see all three elements of success shine through. Both are laced with peoples’ personalities, humor , company culture, and customer stories and success. 

All of which, as Dallas explains, is why people like DreamHost, because they can relate, and build relationships with employees. Dallas himself lets his personality shine by the way he dresses, looks and speaks.  You can’t help but like him just based on how true he is to himself and how genuine he is.

blog-201108-330px-economies-of-scale

As quantity of production increases from Q to Q2, the average cost of each unit decreases from C to C1.

“I thought being big would make it easy to become bigger just by being big to begin with,” Mark of Hostway says as he starts his answer to my question. In reality, the bigger you are the more you have to leverage your economies of scale to get ahead. Mark agrees with Ryan and Dallas that there is plenty of room for others to join in the hosting business, no matter the size you are today or will be tomorrow. 

He then references a comment from Dallas about how the small companies stay in business and grow based on the fact that, no matter how hard the bigger companies try and wish they could provide the same level of support and high-touch relationships with customers, “they just can’t” based on the pure volume of customers. 

Being a large company just makes it impossible to achieve the same level of high touch as the smaller hosting providers can. Instead, the bigger companies grow by buying other companies and technology that in turn only makes that lack of high-touch service that much easier for smaller companies to gain local market share. 

Mark then circles back to his first point that leveraging your size to decrease costs and be more competitive in that space coupled with innovation will propel the bigger companies ahead. 

The remaining time was spent discussing the murky term of “cloud computing.” There was a nice debate about how marketers have latched on to “The Cloud” to try and sell anything. 
One of the attendees spoke of a great example of that: The  Iomega Cloud Hard Drive
This drive is no more special than any other network hard drive, other than the label says it is the “Cloud Edition.” 
 
It is pretty comical how the term cloud has become the buzz word, just like “green” was and still is depending on who you ask. 

This was one of my favorite sessions to hear both hosting veterans and attendees alike get to express their views and opinions. 

Now that HostingCon is over, I have a few weeks to unload the brain and prepare to load up again at VMworld, where we’ll be showing ScienceLogic’s virtualization and cloud management capabilities. See you there.

Share This Post

Most Popular

Archive

Comments