My discussion with John Enright, General Manager of Web and Applications at Hostway Corporation, began with a wonderful stroll down memory lane. As John told me a bit about himself and his background, many of the circumstances and stories reminded me of my own career and were a great review of the early days of the Internet.
He also has some very clear ideas on where the Internet and web hosting are headed.
HostAdvice: Can you please start by telling me a little bit about yourself and your background?
I’ve been in this industry for over 20 years and I started one of the first commercial hosting companies - ValueWeb – in 1994. We offered cost effective hosting solutions, which was not easy in those days. We had to build everything from scratch. There wasn’t even an API for domain registration – it was all done with e-mail templates.
Our first servers were Intel 486s with 32 MB [ed. Yes, MegaBytes!] of memory. We advertised in the back of PC Magazine and rapidly grew to become one of the five largest hosting services in the US. We eventually merged with Affinity, another hosting company of similar size, in 2001.
Our primary focus was on price and offering a self-service platform. However, as time went on, it became increasingly difficult to compete just on price, so we started to focus on adding value and helping our customers with their e-commerce sites. We also focused a lot on channel relationships and started offering private label versions of our platform.
Affinity was purchased by Hostway Corporation in 2007. About a year and a half later, I left Hostway for several years to run an Internet incubator and then ran the small business division at Hosting.com for several years. I came back to Hostway in my current role in 2014.
HostAdvice: From the Hostway web site, you seem to target mainly the high-end of the hosting market – is that correct? Who is your target audience?
We basically have 2 sides to our business:
- Web & Applications – These are mainly small businesses and web sites, usually running WordPress, Drupal, or something similar. We offer them domains, web hosting, e-mail, and managed application services. We currently have about 200,000 of these customers, and together with our channel partnerships, they account for slightly less than half of our revenue.
- Cloud and Managed Servers – The majority of our revenue comes from larger businesses with more complex infrastructure and advanced managed services solutions. We have several thousand such customers across our colocation, managed server, and private cloud solutions.
The Cloud and Managed Applications side of our business is growing at a faster pace than the Small Business side and that is where we are focusing our plans and efforts for our future company growth. This business is much more service-based, rather than just providing a hardware infrastructure.
HostAdvice: Who do you see as your main competitors? How do you feel you are better than them or different from them?
Since we are competing mainly at the high end of the market, our main competitors are companies like Rackspace and Peer 1. We see Hostway as unique in that we have products and solutions for both the sophisticated enterprise as well as great entry-level solutions reasonably priced at well under $100 per month. Once you start on our managed application platform, you can seamlessly add products and services as your company and needs grow.
HostAdvice: I see that Hostway offers the choice of either Windows or Linux servers on its cloud platform. What is the breakdown of customers and what generally draws customers to one or the other?
The breakdown of our Windows vs. Linux customers is actually about 50-50. The decision of which type of server to choose typically depends on the background of who is ordering and managing the server. If they are web developers, they will usually go with Linux. However, if it is the IT department, they are usually more familiar and comfortable with Windows and will opt for a Windows server.
HostAdvice: Speaking of Windows – your cloud platform is based on the Microsoft Azure Stack. What made you go in that direction? How are the demand and the response of the market to that offering?
Amazon had a huge head start in the cloud computing space with its Web Services and Elastic Compute Cloud. However, Microsoft is definitely a force to be reckoned with and we are seeing significantly increasing demand and a lot of growth on their Azure cloud platform.
I think the reason for this is that Microsoft is better known to corporate IT departments and that Microsoft is bringing its IT tools into the world of the web. Their tools and user interfaces are generally better well-known and offer greater ease of use to the engineers managing these systems.
As a result, I am convinced that adoption of the Microsoft Azure Stack will continue to grow.
HostAdvice: I understand that you currently have six (6) data centers in North America. What does that mean for international customers or customers targeting users outside the US and Canada?
We currently offer two different options for customers who want or need a data center outside of North America. The first option is to have them hosted with one of the Hostway franchises that we have in several locations, such as in Germany or Korea. The other option is that we can host and support them on the public Azure cloud.
HostAdvice: I noticed the claim on your website that:
Our Cloud Is Resold by 40% of Fortune 500 Service Providers
Can you please elaborate on that?
Sure. We offer private labeling of our cloud infrastructure to about 20 global partners. These are mostly large telecom companies that offer hosting services to their customers. Even the support is white labelled – when their customers call the telecom’s support line for help with their hosting package, they are actually talking to a Hostway employee.
HostAdvice: Hostway also seems to have an extensive offering of options for email hosting and support. Why would a company opt for hosted Exchange instead of Google Apps? Why don’t you offer Office 365 like some of your competitors?
Customers that opt for hosted Exchange servers typically come from a corporate environment. In that environment, the network administrators and the support team are already familiar with Exchange. Also, the users in a corporate environment are more familiar with Outlook and they are reluctant to give that up, especially since they have both a desktop application and a browser interface to access their email, calendar, and associated information.
As to Office 365 - we actually do support Office 365. This is something that we are going to be emphasizing and promoting more in in the future. We think our high quality support – and the fact that we can support both Hosted Exchange and Office 365 – makes us a better alternative to working with Microsoft directly. Our team works with customers throughout the onboarding process and beyond at much more direct / hands-on level than Microsoft support can provide.
HostAdvice: One of the things you emphasize on your website is your investment in innovation. Can you please give me a few examples of that?
The rate of change in this industry and with these technologies is unbelievably fast and it is absolutely necessary – although sometimes challenging – to keep up. Major technology changes seem to come in 2-year cycles, which is really very often.
We are very innovative in the areas of security and application support. We build a lot of our own tools for both our customers and ourselves (e.g. our server control panel). We also research existing tools and will often integrate some best of breed tools into our tools or offerings.
HostAdvice: How do you see the hosting market evolving – in the next 1, 2, and 5 years?
I see the hosting industry becoming very service-oriented in the coming years. Hardware infrastructure will almost become a commodity and could be anywhere – Amazon Web Services, Microsoft Azure, or even on-site at the customer’s office. This business is going to be all about the services that are layered on top of the infrastructure. It takes a lot of work and expertise to maintain those services.
Since the very beginning of this industry – the key differentiating factor between Hosting companies has always been the quality of support, and that’s more true now than even before. The hosting companies that realize their core services is not in a contained in a data center, but rather the passion and intelligence contained in their people, will be the ones that thrive and grow in this transformational period.
HostAdvice: If you were asked to give the graduation address to the class of 2016, what would be your message to them?
My message to them would simply be to be adaptable and agile. The rate of change of technology, and of our world in general, continues to accelerate. Everything around you is changing so quickly - you must be adaptable and change yourself along with the external changes.