HOSTING GURUS

h HOSTING GURUS T 32 Ping! Zine Magazine I I I T Success Using Value Added Services Part 3 By Dave Young Hosting’s Hidden World: This is the third and final article in the three-part “Hosting’s Hidden World: Success Using Value Added Services” series. In this article I will discuss some of the fascinating value-added services (VAS) FastServers.Net and Jumpline are using to transcend the competition. These two hosting companies know how to build a solid brand and deploy services that rival the strongest competitors in the industry. First is FastServers.Net (www.fastservers.net) and their development of DEFCON management services as a value-added service. Utilizing DEFCON in the hosting market enhances the FastServers.Net brand and provides a greater overall experience for their customer base. “We developed DEFCON services to redefine the terms managed, unmanaged, and fully managed, which are terms used loosely in the industry. At the time of entering the managed dedicated server market, every provider had a different set of services that defined these terms. So we did our homework and created five levels of DEFCON services that we believe fit the target audience we seek to engage as customers,” said Aaron Phillips, VP of Marketing and Sales, FastServers.Net. DEFCON represents multiple levels of support that redefine industry standards. All servers come standard with one of the five DEFCON management service levels enabling customers to experience support in an entirely new way. For example, a customer can receive as much or as little support as necessary based on their level of expertise and knowledge. More advanced customers with an extensive system administration background can utilize DEFCON 5, defined as “little or no involvement from the FastServers.Net support team.” Whereas, a customer with no server administration knowledge or experience can take full advantage of DEFCON 1, defined as the “highest level of security, full scope management, auto server updates, and full monitoring.” The real value behind the five levels of DEFCON is the concept of providing services geared to a variety of customers with different skill levels. Opposite DEFCON are the typical industry services, appropriately named – fully managed or unmanaged. Instead of simply offering two types of support, FastServers.Net is able to increase revenues due to the pre-packaged managed service levels. This enables Solution Engineers at FastServers.Net the ability to easily identify, classify, and suggest the proper level of DEFCON management when designing solutions that fit customers’ exact needs. Aaron also stated, “When Solution Engineers can easily identify the appropriate DEFCON level for a customer, it results in a full solution that we are able to explain and provide the customer the value they seek with [CONTINUED] www.pingzine.com 33 TOC their dedicated hosting solution. The big increase in revenue happens with longterm customer relationships. By carefully identifying the correct level of management with our customers we are able to identify roles, execute management services, and maintain customer satisfaction through our management services. The overall concept is to provide the customer with exactly what they need in order to meet their requirements and exceed their expectations.” Based on my interview with Mr. Phillips, building customer relationships and cultivating an atmosphere that provides support on many different levels allows FastServers.Net the opportunity to be a leader in the dedicated server market. DEFCON management is certainly a unique way to position a hosting company and can be used as a way to differentiate FastServers.Net from the competition. Rarely does a hosting provider create a Unique Selling Point (USP) through support services. That said, DEFCON management services is enabling FastServers.Net to customize and build solutions that fit the exact needs of customers, rather than the typical “cookiecutter” approach shown by competitors in the industry. Even though DEFCON is FastServers. Net’s most popular use of a value-added service, it is not the only VAS they use to increase revenues. Several other services offered by the dedicated server company are the “loss leaders” of value-added services. For example, Managed DNS, Urchin Enterprise Stats, and Advanced Anti-Spam & Virus Protection are all services offered by the hosting company at nominal prices. These services are specifically designed to complement a managed hosting solution and bring value to the overall solution. “We also offer a number of shared networking services that are really unique that include Load Balancing Services and Firewall Services. Instead of requiring customers to purchase expensive pieces of equipment, we have developed services using enterprise level firewalls (Cisco PIX 515s) and load balanced (WebMux) and offer these services at very competitive prices. And it continues with offering IP and Bandwidth at prices significantly lower than our competitors – even though IP and Bandwidth sales are their main profit centers,” said Aaron. Next is Jumpline’s (www.jumpline.com) use of over thirty value-added services, or value added applications, such as Ruby, Helix Server, Joomla, SugarCRM, and MediaWiki. These are just some of the notable applications being offered with Jumpline’s suite of products, allowing the company an opportunity to be a leader in the market, as few other providers are able to support so many different applications. However, these applications are not sold as add-ons to packages, rather they are included in variation at different levels. For example, customers have to purchase a higher priced package in order to use Ruby or SugarCRM. That in turn translates to higher revenues, as customers will need to upgrade their existing packages in order to utilize all the value-added applications being offered by Jumpline. Without integrating and pre-packaging VAS into an existing product line, hosting companies may have difficulty distinguishing themselves from competitors. With thousands of hosting companies selling disk space and bandwidth, how does one differentiate themselves and become a leader in the industry? According to Marc Hardgrove, Co-founder, Jumpline, “VAS are the key to keeping a web hosting firm in business. Without VAS, hosting companies are simply selling commoditized disk space and bandwidth. VAS benefit web hosting companies two-fold. First, they allow the hosting company to upgrade users to higher priced offerings, which may lead to increased revenue per customer. But more importantly, they now make the hosting service sticky, in turn, making it harder for a user to discontinue the service.” Even providing over thirty value-added applications is still not enough to be a leading company. Mr. Hardgrove explained to me that it is not a single plan or an all-inclusive plan they use to leverage the market. Instead, it is the architecture of their platform. Jumpline uses a platform called VDS or Virtual Dedicated Server web hosting, enabled by Sphera (www.sphera.com), to power their hosting accounts. The gap between a dedicated server and a shared hosting plan can be significant. This is where fully managed VDS offerings are ideal for a small business. With over 20,000 websites powered by VDS technology, Jumpline is one of the largest VDS hosting providers in the world. Why is VDS technology so powerful? Marc stated, “Each VDS account provides customers with their own UNIX environment allowing each website to operate independently from all other websites on the same physical machine. VDS accounts have their own server software that runs inside an isolated file directory and provides complete autonomy for each website. Security within a VDS environment is unparalleled to that of the ‘Virtual Hosting’ environment. This provides website owners full control of the environment with administrative privileges.” Specializing in VDS services enables Jumpline to carve out their own niche in the hosting industry. Customers requiring more control over their hosting, opposed to the limitations of shared hosting, have the ability to administer their accounts and utilize the power and flexibility of VDS technology. This makes it much easier for Jumpline to stay at the forefront of the VDS industry. And their exclusive partnership with Sphera is also an added bonus. The Jumpline and Sphera partnership provides greater initiatives in the marketing arena to distinguish the company from the competition. To sum up, you can clearly see the benefits of offering value-added services (VAS) to your customers. Whether it is through defining multiple levels of support or offering over thirty value-added applications with various levels of packages, you need to focus on what differentiates your company from your competitors. Gone are the days where just offering disk space and bandwidth will be your main profit centers. So step back, review your business and what you are capable of providing to your customers, and carve out a niche that’s specific to you and your resources. As with FastServers.Net, they extend beyond branding multiple levels of support, they also build their brand and niche on designing custom solutions specific to customers’ needs. And Jumpline also moves beyond value-added applications by providing technology through exclusive partnerships with other leaders in the industry. When you do your research and find your own niche offerings, don’t copy your competitors, do something different. The competition and differentiation between companies will benefit everyone from customers to vendors to business owners and employees. Take pride in what you do and be different. Go out there and make your hosting company stand out from the rest and don’t be afraid to try something new. You never know when your next idea will be an invaluable one. That said, I conclude the “Hosting’s Hidden World: Success Using Value Added Services” series with this – find your Unique Selling Point (USP) and watch your profits soar to levels you never thought would be possible. P! Send your questions or comments to writers@pingzine.com Writer’s Bio: Dave Young is a Professional Writer and provides copywriting services through www.youngcopy.com. Dave is also a Staff Writer for Ping! Zine Magazine. 36 Ping! Zine Magazine