Interview with Matt McKinney, Chief Strategy Officer at Canadian Web Hosting
I haven't had an interview like this in a long time--or possibly ever--where I felt so much passion as I did when I talked with Matt McKinney at Canadian Web Hosting. I'd argue he's a newcomer to the space, with less than 8 years under his belt, but you'd think he had decades of exposure to the hosting industry.
It was an incredible honor to speak with Matt about his experiences, coming from communications and now working in strategy. His passion is infectious, and I hope you can see that in these answers.
Can you tell us a bit about your involvement in Canadian Web Hosting to date - how you got there and what you do?
I'm the Chief Strategy Officer. This means I am responsible for working with management to build solutions and a framework for continued innovation and continued expansion, reviewing the trends, environments, and industries to see where it's going to go and building services around it. Sometimes it's playing devil's advocate. Other times, it's and going around that, seeing where we can go in the future.
I joined the company about 7.5 years ago, I met Tony Chu, the CEO, in Seattle, and we were talking back and forth about the projects we were working on. It was a quick collaboration and instant connection. He and Kevin Liang, the other co-founder, decided to bring me on as marketing manager.
My original role was focused on building the brand and company and transforming the business from shared hosting towards the enterprise and other lines of business where we thought the business was going to go. At my previous roles as communications writer, I had been working with Fortune 500 companies where I was putting together business plans, proposals, web content, written content, and looking where these companies were going. What Canadian Web Hosting wanted was what I was already doing. This change moved me into the tech industry where I got into something I began to believe in passionately.
As I got more involved in the company, the role evolved. One of the things I learned about myself is that I like writing. I look at things like a puzzle. I put together the pieces. Marketing and strategy are like writing a document: there's an introduction, a main section, and a closing. Marketing is similar to that, where you're putting pieces together to evolve the company: the online channel, the offline channel, cold sales, warm sales, etc.
Canadian Web Hosting was a premium shared hosting provider at that time but it was a natural segway to move into the enterprise, where we focused on the Fortune 1000 companies and other larger entities. The things we've done over the last 7 years drives that home.
What does Canadian Web Hosting do, and what services are offered?
One thing we're trying to do with the company is creating meaningful change for customers we work with. Some look for basic hosting and we want to continue to meet those requirements. We have been doing that for many years (shared hosting, VPS, dedicated servers - your classic hosting; they have been around for 20 years, if you will). Not only do we support those, we do so in a meaningful way, backed by premium support and services. These are top-tiered services, with everything you need, high quality bandwidth and networking. We innovate on our shared hosting by building on VMWare on a redundant cloud that can have redundancy on the backend, providing better networking and power; we do this across the board, even for these lower tiered services. People who are coming to Canadian Web Hosting can expect premium services at all levels. We want them to experience the same caliber of services regardless of what they are buying.
But we are a full service hosting company, so as we transformed, we saw innovation in other areas. For example, we're heavily involved in the cloud, and the cloud is different than traditional hosting. VPS hosting people don't talk about the cloud. Cloud people don't talk about shared hosting. That's why we created CACloud.
CACloud is our cloud environment. These are flexible cloud services, SMTP cloud servers, and the elastic cloud, similar to what you may know about at Digital Ocean. Anything you see on that environment supports the cloud environment. It's like a VPS in terms of pre-set plan configurations, getting your OS templates up and running, but we also have real time cloud capacity and scalability. Unlike other services, you can be upgraded in real time. That's where we differentiate from legacy hosting. From a company standpoint, there's separation between the two because it serves a different audience.
AURO is the next iteration of the cloud. That's what we see as a cutting edge solution, and it's a year or two away from critical mass. We wanted to create an independent brand from CACloud, because its usage is different. This service is focused on customers who want AWS or Azure--they're looking for multi-region and multi-cloud developer/API driven services. CACloud is more for people who are familiar with virtualized services/VMWare, in an enterprise grade cloud environment. They're still developing in a traditional manner, but they're looking for high reliability and high redundancy.
The services target different customers (DevOps vs. traditional customers who are looking for the next generation of services but aren't ready for AWS or Azure environments which are developer- or API-driven).
Finally, we have eSecureData, a datacenter and dedicated server provider, which we use to get control of all pieces that come into play. Working with legacy colocation providers like we've done in the past, it's like fitting a square peg into a round hole. You have to do the things in the way they want; they give you limited power, cabinet space, and capacity. As we built into the cloud, we found we needed more services and our clients needed more power and capacity too. We always like to grow organically with our customers and build along the way, so we built hardware infrastructure to better support our clients' cloud computing needs. It's a supply chain, so to speak, to deliver à la carte solutions that our clients need.
In Vancouver, BC, there are a lot of traditional co-location facilities. They are fine - they do what they're supposed to do. But we want to differentiate ourselves and to move into high entity, high computing, and high cloud capacity. For a datacenter, we recognize that the Internet of Things (IoT) and cloud is the name of the game. When you look at other legacy providers, we get a standard cabinet, but what we put there verses what we can put in our servers is different. We can get at least 50% capacity and up to 100% more capacity doing it ourselves. That's where we're going: the next generation of co-location.
For the tech and services that our customers need, we need the support framework to help them. We pride ourselves on having generalists in the company -- people who can work across different frameworks seamlessly -- in a meaningful manner for our customers. A big part of my role is the customer driven aspect. As an example, with Sharebuilder where I was 10-15 years ago, they prided themselves on treating everyone the same no matter how big or how small. You never know who that next big customer is - they may already be there and you don't know it.
How are AURO and Canadian Web Hosting related, and what do you do for AURO?
AURO is a unique company with unique offerings, and also built from scratch on a unique infrastructure. AURO is a new type of service and helps us with how we build computing, storage, and networking - it's a software-defined datacenter. It moves away from being hardware-based. It was the first step into that transformation for us, starting about 2 years ago. The entire company transformed along the way.
AURO is a sister division but it's uniquely built. It's a rethink of how we operated. You do hear a lot in the marketplace about OpenStack. One of the things we did at AURO is define a public cloud operating system (OpenStack is a private cloud).
My role is the same there - I am the strategy officer for all the companies. I really push the envelope down for each of the brands. Each is doing something unique but each complements the others.
How does someone writing for communications become a Chief Strategy Officer of one of the topmost Canadian web hosting companies?
When you do communications and marketing, there are a lot of things to learn, particularly in this industry. I always prided myself on learning how different things work, and studied the technologies such as VPS, shared hosting, and dedicated servers.
But it's not only about learning, it's also about being able to communicate what those services do by becoming a resident expert on each product: how do we use it and how do we support it? I studied it piece by piece, component by component, becoming an internal expert and taking that and messaging that to our customers, making it more consumable and more editable.
Technical people in the industry are not always communicators; they don't always talk about something that the average person can consume. For example, the procurement department is a buyer, and they don't know technicalities, so they need to be spoken to in simple terms. I had to understand the product and communicate them (through emails, whitepapers, etc.) to these types of people.
My role evolved by learning what works and what doesn't work, asking about interaction, and learning the strategy of the product, seeing what's good for the company and what's not good, and being able to explain that out to management and others. My role touches upon all the products. I became a communications expert on the product.
Communication is key. We hire more liberal arts majors than technical majors.
Do you only serve Canadian clientele? Can you tell us a bit about the demographics and geography of your client base?
From a clientele standpoint, we probably had about 90% Canadian customers (and 10% from the rest of the world) about 7 years ago. When the Patriot Act was established, that was a big turning point for our company. Canada always had a rigorous data privacy requirement, as we have to abide by different privacy laws not enforced in the United States. This create a big push into the Canadian market as people were looking north of the border to avoid the Patriot Act and to benefit from Canada's data privacy requirement. The idea was that you would not be pursued by the NSA.
An offshoot from that was more and more companies in the US, Europe, and Asia were moving into Canada from an infrastructure standpoint because of the access to the US from Vancouver, Toronto, and other main hubs. From a product perspective, they could get access to the wider US marketplace and keep services in Canada.
From a data privacy requirement, though, cloud was slow to get initial uptake in Canada. People wanted to be able to control where data flowed. They weren't ready to embrace the cloud. But as an increasing number of people saw the benefits of the cloud, more people adopted the technologies.
Since 7 years ago when I started, we were always targeting Canadian clientele. As we have transitioned to the enterprise, Canadian business has afforded unique properties and capabilities unavailable otherwise in US, such as data privacy/capacity. Seven years ago, Canada was 35% more expensive but now it's cheaper to host cloud here than in the US due to the price difference. It's another interesting component. With $1.30 CAD to $1 US, it's more affordable to go with Canada, so the breakdown now is 50/50 Canada and the rest of the world.
What can you tell us about the offices for your companies, and how many employees work at each?
We have about 90 employees total in the company, and we're always focused on automation. We're lean and automate as much as possible. We do have an office in Vancouver and Toronto. It's about 70% in Vancouver and 30% in Toronto, our newer office. Our HQ is in Vancouver but we're slowly changing the mix to make each equally as important.
What have you been seeing in terms ofcloud demand? Is there an increased level of interest based on people feeling more confidence in cloud technologies? And if so, why?
Cloud for our organization is growing faster than we anticipated: the term is explosive growth. That's why we moved into the datacenter side of the business, to increase our capacity but doing so in a meaningful way. That's one of the direct offshoots of our offering because the need is there. As far as why it's happening, it's money conversion rates, the data privacy, and Canada was voted as having the nicest people in the world - I think a lot of that has trickled down to our customers. Most people are very nice, very courteous, and very generous. From a company perspective, we want to maintain and keep that. The people on the backend are here to support you. There's no task too small or too big. Our staffers are really passionate about helping our customers.
Can you tell us a bit about the VPN, firewall, and malware scanning services that you offer?
It's a subset of what we're doing from a security perspective. As a hosting company, we have a lot of concerns of protecting data and making sure access is secure internally and externally. We make all of those things available; it's a starting point into a security services offering. VPN can range from setting up open source VPN with a tunnel for secure access to going much further, hardware-based firewalls from Datacenter A to Datacenter B, creating a very secure path between each. Those are the "appetizers" of what we can do from a security perspective.
Our malware security is from Sucuri. Plug-ins may break when there’s a security update, so we offer clients virtual patching where they don't have to update the hardware server themselves. We can do it for them virtually, removing vulnerabilities. That's a big benefit – to do something virtually vs physically. For a lot of customers, that's all they need. They don't need a $1000 device when they can get this service for closer to $10 to 15/month where we remove the burden from the customer and do the patching for them.
How do your companies keep public cloud data secure?
That's a huge topic! From a security perspective, we operate in a Defense in Depth type of approach. We understand that there's no single fail-safe mechanism to protect customer data. Instead, we're utilizing multiple layers and protocols to protect their data--intrusion protection devices, hardware, antivirus software--a whole range of different services. It's an approach that works and does everything possible to mitigate the risks. Nothing is 100%, but what we’re doing is almost as good.
What are the differences between your managed and enterprise dedicated server offerings?
Enterprise is a more expensive type of server, providing the top end, biggest processor and max RAM opportunities. For enterprise customers, cost isn't necessarily the burden, needs are more based on the function of the server itself. We provide the top-tier components fully populated as they're looking to get very dense and manage a lot of capacity.
Managed server customers aren't looking to max out the device, but are looking for people to do the administrative tasks on top of it. My team takes care of everything, we patch it, we take care of it 24/7 (hard drives, CPU, making sure everything is where it needs to be, and in the event that something does happen, we notify you that something is happening and take care of whatever it is). For most customers, it's all about general maintenance, software updates, regular tasks that people don't have the time or staff to manage, especially if you have multiple servers or a server farm.
Enterprise offers that but the devices are more expensive. For example, instead of 128GB of RAM, you will get 768 GB of RAM. We have a Fortune 50 company running in our datacenter, and they procure bigger, larger, denser servers compared to midsize companies. They pay a lot more because from their perspective, money isn't the issue. They need the capacity and density.
What are your plans for eSecureData, the company you acquired in December?
We'll have another big announcement coming out in the next quarter in terms of increasing capacity and supply and offering high density, high capacity colocation, so it's really moving well beyond the legacy provider and the next generation of cloud.
Do you find that you still deal regularly with matters such as DDOS and fraud? How do you combat these?
With fraud, we have some really good systems in place. It's a very small percentage of signups; we've eliminated 95-97% of signups coming from our services because we're focused on having processes in place to weed out malicious activity. We've spent a lot of time and effort to remove that, since it can be a pretty large burden on businesses.
With DDOS, it does come up once in a while. We have enough capacity so we can absorb the DDOS. We work very hard with our customers when something like that is happening to make sure it doesn't recur; our goal is to always protect our network and our customers. We have increased capacity to absorb those attacks regardless of what's happening externally.
What do you see happening in the industry in the next 5 years?
- Continued expansion of the cloud. Cloud is going to transform everything - on demand, push button access, you're not going to deploy the servers the way you do today. It's on demand, real-time, and you avoid the processes you have now.
- Geography. I think you're also going to see geography as less of an issue as network capacity rolls out. It's much easier and more accessible to move my server from location A to location B. It's not instantaneous to move from Vancouver to Germany today seamlessly, but in the next few years, I think geographical flexibility will be more prevalent.
- DevOps. Looking at cloud services and control, it's a pendulum swinging. The cloud is lending itself to specialized services which are now being sought out. You have a lot of technology companies moving into development and DevOps from a future perspective.
- Internet of Things. IoT will change how business is conducted today. Real-time access gives you endless data, which changes hosting and infrastructure. The amount of capacity it takes to support that will require hosting to transform. Otherwise, we won’t be able to keep up with what companies are doing.
- Security. Security will continue to transform: phone-based, biological, a mechanism to control access to things like a watch, phone or contact lenses.
Is there anything else you want to share with our readers?
A lot of people think the hosting industry is an industry of experts; a plentiful resource of expertise and knowledge. Hosting is by and large thriving and transforming from what people would expect. It's a very interesting time to be in the marketplace.