An Interview with Diego Cabezudo, CEO and Co-Founder, Gigas
While most hosting companies can’t wait to penetrate the North American market, Gigas Hosting has consciously decided not to enter that market. While most hosting companies have a wide range of products (from shared hosting all the way up to dedicated servers) in order to meet the budget of any potential customer, Gigas only offers two hosting products. These counter-intuitive approaches seem to be the key to Gigas’ success. To understand why and how, I spoke with Gigas CEO and Founder Diego Cabezudo.
HostAdvice: Please tell me a little bit about yourself and your background.
I was born in Gijón, Asturias, studied Telecommunications Engineering inPamplona and gained an MBA from the London Business School. I have developed my professional career in the technology sector since 1995 in Spain, the UK and Ireland, working for Telcos, consultancy firms and IT corporations.
HostAdvice: Gigas seems to only offer high-end web hosting – I don’t see any shared hosting options on your site. Why is that?
When we started the company, we felt there was a major gap in the technical support cloud service providers offered to businesses. This was in 2011 and at that time, cloud hosting was not yet available in Spain. We decided to offer cloud hosting along with extremely qualified support for mission critical applications. We wanted our first-level support team to be able to answer customer questions right away. That is why everyone on our support team is a qualified engineer and/or system administrator. This level of support and our closeness to clients makes our service truly unique, especially in the Spanish-speaking markets. Low-cost shared hosting providers do not offer such level of service.
HostAdvice: Your two products are Cloud Datacenter and Cloud VPS. Can you please describe them to me?
Cloud VPS is a straight-forward VPS hosting that is sold online. The targeted market for our VPS hosting is small companies, developers or IT freelancers.
Our Cloud Datacenter is different. The targeted market for this product is medium to large companies from all sectors, including travel, energy, hospitality, retail, food, building, gas, and more.
The Cloud Datacenter is a virtual private data center. We have replicated all of the elements in the physical data center, such as storage, memory, network components, etc., in a virtual world. Our approach is very unique – instead of selling virtual machines, we provide a pool of resources (CPU, memory, storage) with which to replicate a physical datacenter in a virtual environment. This allows you to create, modify, re-distribute, and manage the resources in your virtual datacenter any way you’d like, depending on your current needs. Deploy one huge machine or many small machines – the choice is yours.
Your Cloud Datacenter is controlled and managed from a simple but powerful, real time, web Control Panel that redeploys resources in a matter of minutes.
HostAdvice: How is this different from Amazon Web Services (AWS) or Microsoft Azure?
In addition to the great flexibility that I just described, the other main difference and benefit is that our solution is based on a fixed monthly fee. This means that there are no surprises at the end of the month because of unexpected increases in traffic or storage needs.
HostAdvice: How many active customers do you have today? Where are they mainly located?
Currently, we have about 4,000 customers. 95% of our customers are located in Spain and Latin America. Both geographies generate about the same amount of total revenues.
Cloud VPS currently represents 90% of our customers – but only 15% of our revenues. The Average Revenue Per Customer (APRC ) is 25 Euro per month.
We currently have about 450 Datacenter customers, which is about 10% of our total customers. However, they generate 85% of our revenues and have an APRC of 1,100 Euro per month.
HostAdvice: Why are you not targeting the US or European markets?
Our Cloud Datacenter product is a major and strategic decision for customers, so we sell it via a direct sales force. Opening a new non Spanish-speaking market means hiring additional sales and support human resources (at least three commercial profiles per office and six more support people per language) in order to have 24x7 coverage). At this point in time, we are focusing on Spanish speaking countries. There is a lot of demand in these countries and relatively low competition.
HostAdvice: Who are some of your biggest customers?
Our customers include some of the biggest global companies in electronics, travel, energy, hospitality, retail, food, building, and gas or hotels industries. We also have partnerships with major local and global Integrators and ISV’s
HostAdvice: Who do you see as your main competitors?
That has really changed over the years. When we first started, our main competitors were local hosting providers. Today, we are competing with large US and multi-national companies such as Amazon and Microsoft. We also often compete with large TELCOS and system integrators.
HostAdvice: How do you see your offerings as different and/or better than theirs?
Our competitors have certain things that we don’t, such as size, scale, and to some degree, price. Our pricing is currently higher than AWS, but lower than Azure.
However, we have two main competitive advantages:
- Support – We provide extremely high quality support in our customers’ native language.
- Proximity to Customers – We are very hands on. We go out and meet or customers and work together with them to define the best architecture for them.
HostAdvice: How is the web hosting business in Europe and South America different from in the US?
First of all, in the US the only language used is English. We want to be able to actually talk to our customers, not just email them.
Second of all, in the US and Europe, the competition is very fierce. In our market(s), we have less competition and it is more fragmented. There are not a lot of large hosting companies, so it is easy for us to get to be in the top five.
HostAdvice: How do you see cloud technology and the cloud hosting market evolving in the coming years?
Cloud hosting has already evolved dramatically from a technology perspective. It will now continue to evolve from a marketing and adoption perspective. Already today, we don’t need to explain as much to people as we used to, because they already know what they need to know.
I expect that more and more cloud services will be sold through companies (like ours) that focus on services.
HostAdvice: What are your future plans for Gigas?
We are currently very focused on growing organically. We are opening additional offices in Latin America in order to extend our sales reach. At the same time, we are building additional sales channels, such as distributors and ISVs. Looking a little further out, we are starting to consider acquisition opportunities as well.
This is really a scale/volume business, because we need to cover the fixed costs of our platform and data centers. This year we plan on opening our fifth data center.
HostAdvice: How many employees do you have today? Where are they located?
We currently have about 75 employees. About 2/3 of them are in our Spain headquarters and the other 1/3 are sales staff in Latin America.
HostAdvice: How many hours a day do you normally work? What do you like to do when you are not working?
I can easily work 14-16 hours a day. At the moment, in the little free time I have, I am enjoying myself trying to get a pilot’s license.